IGas announced the signing of an agreement with Nexen Petroleum U.K. Limited, a wholly owned subsidiary of Nexen, to acquire Nexen Exploration U.K. Limited, and as a result, IGas Group will become the operator and sole owner of each of its licenses (subject to approval of change of control by DECC).
IGas' Contingent Recoverable Resource 2C (P50) will increase by 115% to 1,736bcf or 290 million barrels of oil equivalent and its current production will almost triple.
In exchange Nexen will receive 39,714,290 IGas shares equivalent to 29.9% of the enlarged issued share capital. These shares will be subject to a lock up agreement for nine months.
The Agreement will also give IGas on-going access to Nexen's unconventional gas technology, including the secondment of key personnel. Nexen will have the right to be represented on the board of IGas by one director.
Andrew Austin, CEO, of IGas said. "This accretive acquisition marks a major turning point in our history. IGas is more than doubling its Contingent Recoverable Resources, with a consequential effect on future production. As a result of this deal we will have enough recoverable gas to supply electricity to 15% of UK homes for 15 years.
Additionally, as operator of all our acreage, we will be able to accelerate our production plans and increase our ability to deliver gas. This landmark deal brings significant value not only to IGas' existing shareholders but also to Nexen, as its onshore UK gas interests will now be held in a company dedicated to delivering secure gas onshore.
Nexen has been a great partner in the appraisal and pilot production phases of the development of our assets and we now look forward to having them as shareholders as we move to full field development. We remain funded for our existing plans including the delivery of our first commercial production site in 2011."
The closing of the transaction is subject to DECC approval of a change of control of Nexen Exploration U.K. Limited, and the approval of the shareholders of IGas. A letter describing the transaction and the timing of the required General Meeting will be posted to IGas shareholders shortly.
Most Popular Articles
From the Career Center
Jobs that may interest you