Ophir Energy and Salamander have reached an agreement under which Ophir will take over Salamander in an all-share transaction. The proposed deal is subject to Salamander’s shareholders vote.
Under the agreement, Salamander shareholders will receive 0.5719 Ophir share for each Salamander share.
According to Ophir, the deal values Salamander, a South East Asia-focused exploration and production firm, at £314 million ($492.3 million).
Based on the closing price of 202.7 pence per Ophir Share on 24 October 2014 the transaction represents an indicative value for each Salamander Share of 115.9 pence per share, a premium of 44.5 per cent to the Closing Price of 80.3 pence per Salamander Share on 24 October 2014, the last business day prior to the start of the Offer Period); and
Following completion of the transaction, Salamander Shareholders will own approximately 20.9 per cent of Ophir.
However, Ophir has said that in order for the acquisition to proceed, there is a condition by which Salamander has to cancel the previously announced sale of share in its B8/38 concession containing the Bualuang oil field and the surrounding G4/50 concession, both located in the Gulf of Thailand to SONA.
Salamander Board will recommend its shareholders to accept the Ophir offer, and will advise them to vote against the SONA transaction.
Furthermore, one non-executive Director of Salamander will join the board of Directors of Ophir as a non-executive Director with effect from the completion of the transaction.
Explaining the move for Salamander, Ophir, so far focused on its assets in Africa, said that it has identified entry into South East Asia as a strategic priority.
So far, Salamander has brought onstream two offshore platforms on the Bualuang oilfield offshore Thailand, as well as developing the Kerendan gas field onshore Indonesia. Furthermore, Salamander has received conditional Environmental Impact Assessment approvals to start drilling in the G4/50 block in the Gulf of Thailand in 2015.
“We see many value creating opportunities in both Africa and South East Asia that can be swiftly accessed by leveraging Ophir’s exploration expertise with Salamander’s operational strength…”
According to Ophir, these licences contain highly prospective acreage including 20 identified prospects; containing aggregate prospective resources of approximately 200 mmboe (gross). G4/50 is adjacent to Salamander’s Bualuang oil development, implying rapid, highly-economic development options in the event of exploration success. Ophir currently intends to drill up to three wells on G4/50 in 2015.
Commenting on the proposed transaction, Nicholas Smith, Non-executive Chairman of Ophir said: “Combining Ophir and Salamander will create a balanced African and South East Asian operating platform, designed to deliver Ophir’s exploration-led strategy across both regions.”
“We see many value creating opportunities in both Africa and South East Asia that can be swiftly accessed by leveraging Ophir’s exploration expertise with Salamander’s operational strength. Furthermore, Salamander’s anticipated growing production will allow Ophir to diversify its funding sources, and to continue to monetise assets for the benefit of shareholders.”
“The Board of Salamander unanimously believes that the Ophir offer represents an attractive opportunity to participate in an enlarged African-Asian E&P company…”
Charles Jamieson, Non-executive Chairman of Salamander said: “We are pleased to announce a recommended transaction with Ophir. The Board of Salamander unanimously believes that the Ophir offer represents an attractive opportunity to participate in an enlarged African-Asian E&P company with a strong balance sheet and enhanced operating capability, and at a premium to the market value of Salamander prior to the start of the Offer Period.
“In addition, given the all-share nature of the Transaction, Salamander Shareholders will continue to have exposure to future upside in the Salamander Group’s portfolio including the G4/50 exploration licence and incremental upside opportunities to commercialise additional gas resources in the Greater Kerendan area.”
“On behalf of the Board, I would like to take this opportunity to thank our employees, staff and partners whose hard work and dedication have helped build Salamander over the past nine years into a substantial, full-cycle E&P company with an exciting portfolio of licences across four countries.”