Melrose and Petroceltic Plan to Merge

Management teams at Melrose Resources and Petroceltic International have proposed a merger to create a regionally-focused company targeting opportunities in North Africa, the Mediterranean and the Black Sea.

The merger would see an enlarged business own 2P reserves of 84 million barrels of oil equivalent (MMboe) and 2C resources of 357 million barrels, along with un-risked prospective resources of more than 1.3 billion barrels, according to a statement released Friday by the two companies.

The plans have been met largely with enthusiasm by oil sector analysts who follow the companies, both of whose shares are traded on London's Alternative Investment Market.

Analysts from London-based Mirabaud Securities said in a research note published Friday that it believed the two businesses would be on "a surer footing" after a merger.

"At first glance the transaction seems to make good strategic sense for both sides creating a mid-cap E&P business with a complementary suite of assets focused on the MENA [Middle East and North Africa] region," they said.

Mirabaud pointed out that the deal adds a solid production base (28,000 barrels of oil equivalent per day, mainly gas) and 2P reserves (84 MMboe) to Petroceltic that de-risks its earlier stage asset portfolio and, crucially, should open up enhanced funding options for its Ain Tsila project in Algeria.

"Melrose also brings a degree of operating expertise that should be transferable to Algeria enabling Petroceltic to retain operatorship of Ain Tsila post farm-out. For Melrose, Petroceltic brings attractive medium production growth potential in Algeria and the added spice of exploration in Kurdistan and Italy," added Mirabaud.

Meanwhile, analysts at Macquarie Group described the proposed deal as "an attractive merger for Melrose Resources".

However, Oriel Securities said that it was "slightly surprised" by the deal, pointing out that it "appears to ascribe negligible value" to Melrose's Galata gas storage project in Bulgaria.


A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Orlando, FL
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Chicago, IL
Executive Assistant
Expertise: Executive|Secretarial or Administrative
Location: United States
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours