MBO or No Bid At All Most Likely for Valiant

The future of North Sea-focused junior Valiant Petroleum will most likely see the firm become subject to a private equity-backed management buyout or a failure to attract any bid at all, according to an analyst report on the company published Thursday.

London-based Westhouse Securities puts the chances of an outright sale of Valiant at 20 percent after the firm announced a strategic review of its options in early September that was followed by the announcement in mid-November that CEO Peter Buchanan was being replaced in the interim by Michael Bonte-Friedhaim.

Far more likely, said Westhouse, was that the firm would see a management buyout backed by private equity funding. The bank puts the chance of this occurring at 40 percent since Bonte-Friedhaim's appointment as acting CEO was to ensure that there would be no conflict of interest as Buchanan focuses on a possible buyout proposal.

However, Westhouse believes that there is an equal chance that Valiant will not attract any bid at all. The bank cited fellow North Sea player Ithaca Energy, which went through a similar process earlier this year but a bid approach failed to materialize into a concrete offer for the company.

Valiant has operations and acreage positions in the UK North Sea and Norwegian Continental Shelf. The company currently produces more than 7,500 barrels of oil per day from its operations in the UK and, recently, began production at its first operated asset: the Causeway field.

Valiant announced near the end of October that it had been provisionally awarded interests in several blocks as part of the UK's 27th Offshore Licensing Round. The firm was also one of a number of companies to be awarded acreage in Icelandic waters on Tuesday this week.
 

 

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 jmainwaring@rigzone.com

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