Petroleum Africa
Find us on: 
Tuesday, November 25, 2014
The boards of directors of Ophir Energy and Salamander Energy have reached agreement on the terms of a recommended acquisition to be made by Ophir and/or a wholly-owned subsidiary of Ophir Energy plc for the entire issued and to be issued share capital of Salamander.
Under the terms of the transaction, Salamander shareholders will be entitled to receive for each Salamander share, 0.5719 of a new Ophir share. On the basis of the closing price of 202.7 pence per Ophir share on October 24 (being the last business day prior to the date of the announcement by Salamander on October 27 that commenced the offer period) the transaction represents an indicative value for each Salamander share of 115.9 pence per share, values the entire issued and to be issued share capital of Salamander at approximately £314 million and represents an indicative premium of approximately 44.5% to the closing price of 80.3 pence per share.
Following completion of the transaction, Salamander shareholders will own approximately 20.9% of Ophir.
Both boards believe there is compelling strategic logic for a combination of the two businesses that would substantially benefit the shareholders of both companies. The combined business would have a strong balance sheet, enhanced operating capability in both Africa and South East Asia, and deep expertise across key technical and commercial functions. The combined business has the opportunity to generate immediate operating synergies across the combined portfolios and, leveraging Ophir’s exploration track record and financial strength and Salamander’s established Asian operating platform, would be well-positioned to accelerate exploration activity in Salamander’s licenses in offshore Thailand, and in Ophir’s recently acquired acreage in Myanmar and Indonesia, while continuing to pursue the significant opportunity set in southeast Asia. The combination would provide shareholders with exposure to 21 production, development and exploration blocks in South East Asia, as well as to Ophir’s extensive footprint in Africa.
Ophir, as enlarged by the combination with Salamander, will benefit from diversified funding sources which will significantly enhance the long-term sustainability of the combined business. Salamander’s current production base is highly cash generative and, as anticipated production grows over the coming years, Ophir plans to use its strong balance sheet position to enhance the cash flow returns from the underlying assets. This cash flow can be reinvested in Ophir’s proven business model, namely that of exploration/appraisal and continued monetization of exploration/appraisal success.
The transaction will be put to Salamander shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Salamander shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75% in value of the Salamander shares voted. In addition, a special resolution implementing the Scheme and approving the related Capital Reduction must be approved by Salamander shareholders representing at least 75% of votes cast at the General Meeting.
" alt="TAG Oil Completes Fraccing Program at Egypt’s T100 Well in Western Desert">
" alt="Sintana to Expand Asset Base in Namibia with Acquisition">
" alt="Luanda Gives Afentra Nod for Azule Acquisition">
" alt="TotalEnergies Increases Stake in ROC’s Giant Moho Field and Sells Mature Assets">
" alt="Africa’s $824 Billion Debt Burden and Opaque Resource-Backed Loans Hinder its Potential">
" alt="African Refiners Ponder Threats to Energy Security for Africa as Transition Takes Center Stage">
" alt="Invictus Inks Gas Sales MOU to Deliver Power to Eureka Gold Mine">
" alt="Globeleq Acquires the 25 MWp Winnergy Solar PV Plant in Egypt">
