Rockhopper and Falkland Oil & Gas Limited (FOGL), two oil and gas companies with assets offshore the Falkland Islands, are contemplating a merger.
The boards of the two companies have reached agreement on the terms of a recommended all-share merger to be effected by means of a Court-sanctioned scheme of arrangement.
According to a joint statement by the two firms, the merger would create the largest North Falkland Islands licence and discovered resource holder with a material working interest in all key licences.
Under the agreement, the scheme shareholders would receive 0.2993 Rockhopper shares for each share they own in FOGL. According to FOGL, the merger values entire issued and to be issued share capital of FOGL at approximately £57.1 million, and each FOGL Share at 10.70 pence. This represents an 11 per cent premium to FOGL’s closing share price of 9.60 pence on November 23, 2015.
Commenting on the potential merger, Pierre Jungels, Chairman of Rockhopper said: “This transaction enhances Rockhopper’s position in the Falkland Islands, with the largest regional acreage position and most discovered resources, coupled with a strong balance sheet. By combining Rockhopper and FOGL, we shall create a more coherent licence ownership structure in the North Falkland Basin, driven by a technically accomplished organisation with a strong exploration and appraisal track record, well positioned to access the opportunities in this emerging hydrocarbon province.”
He said that the Rockhopper Board believed the merger would add further momentum to the on-going work to progress the development of discovered resources in the area towards commerciality.
Upon the merger becoming effective the current shareholders of Rockhopper will own approximately 65 percent of the combined group’s issued share capital and FOGL Shareholders will own approximately 35 percent.
John Martin, Chairman of FOGL said: “FOGL has built a significant portfolio of discovered resources in the Falkland Islands region despite the challenging market conditions. The enhanced scale, capabilities and financial position of the merged FOGL and Rockhopper entity will provide FOGL Shareholders with a platform from which to bring these quality resources into development. As a result, the FOGL Board intends unanimously to recommend that FOGL Shareholders accept the proposed transaction.”
The deal is subject to, among other things, approvals by shareholders of both companies, and the court’s approval of the scheme arrangement.
Offshore Energy Today Staff