Rockhopper Exploration has launched a takeover offer for Mediterranean Oil & Gas (MOG), an AIM-quoted exploration and production company with operations in Italy, Malta and France.
Under the terms of the initial consideration offer, shareholders of MOG will receive 6.5 pence per share comprising 4.875 pence in cash and 0.0172 shares of Rockhopper per MOG share .
The initial consideration offer values the entire issued and to be issued share capital of MOG at approximately £29.3 million, a 15.6 per cent premium to MOG’s closing share price of 5.625 pence on 22 May 2014.
In its assessment of MOG, Rockhopper has ascribed no value to the Hagar Qim Exploration Well (which is soon to be drilled by Genel) as part of the Initial Consideration Offer. Instead, it is offering an element of contingent consideration depending on the success of the well targeting the Hagar Qim prospect in Offshore Malta Area 4, Block 7. This well is targeting 27 million barrels of certified mean prospective resources net to MOG and is expected to reach the target reservoir during Q3 2014.
The contingent consideration offer is intended to afford MOG Shareholders an opportunity to benefit from the potential success of the HQ Prospect.
Commenting on the acquisition, Pierre Jungels, Chairman of Rockhopper said: “This transaction represents an important milestone for the company as we add production to our portfolio and broaden our exploration and development opportunity set, by establishing ourselves in an area our team understands well. While the acquisition cost and capital exposure are modest in relation to our balance sheet, the upside potential is significant and we believe that the new acreage will create an attractive entry platform to one of the most exciting regions in the industry at this time.”
Keith Henry of Non-Executive Chairman of MOG said: “This is a good transaction for our shareholders, offering them the combination of both cash and shares in Rockhopper today, while also providing the opportunity to benefit from the potential upside of our Malta well.
“Sadly, a series of setbacks over the past year at the Guendalina Field, MOG’s principal producing asset, and the continuing regulatory delays to Ombrina Mare, our key development project, have prevented us from implementing our strategy of growing our portfolio in the Mediterranean region. In the current market conditions, the MOG board strongly believes that this can only be achieved by a significantly more capitalised company.”
“In addition to the cash element, Rockhopper’s offer represents an opportunity for MOG shareholders to receive shares in Rockhopper, while still retaining a contingent interest in the high risk exploration well offshore Malta that will spud in the next few days.”