Australian-based oil and gas companies Horizon Oil Ltd. and Roc Oil Company Ltd. have outlined plans of a merger between the two entities, creating an enlarged group with complementary assets throughout Asia.
A combination of the two companies, both listed on the Australian Securities Exchange (ASX), has been unanimously backed by both boards and would establish a single entity with a market capitalization of about $740 million (AUD $800 million).
In what has been described as a merger of equals, the deal would see Horizon shareholders acquire 0.724 Roc Oil shares for each of its own. In line with the 10-day volume weighted share prices of the companies to April 23, Horizon shareholders would own 58 percent of the merged group to Roc Oil’s 42 percent.
The merger would build a company with exploration and production assets across China, Papua New Guinea, Malaysia, Myanmar, Australia and New Zealand. It would have proven and probable reserves of 36.9 million barrels of oil equivalent (MMboe), approximately 95 percent liquids, and best estimate of contingent resources of 120.7 MMboe.
According to Horizon Chief Executive Officer Brent Emmett, the combination of complementary core assets and activities makes strong strategic sense for both parties.
“Horizon has been focused on building a leading portfolio of Asian-focused assets and the opportunity to merge with Roc represents a significant step towards achieving that objective,” Emmett said.
Roc CEO Alan Linn said the company had in recent years developed and delivered a regionally focused, low-risk operated portfolio of oil producing assets which contain significant near field potential.
“We have also been actively building our regional exploration. This exciting combination with Horizon strengthens that regional commitment and offers significant potential for our highly skilled teams to work together to build a stand out regional developer and explorer,” Linn said.
“The complementary assets provide the merged company with a tremendous platform from which to deliver a shared strategy for value growth in the Asian region.”
It is expected the merger will be completed in August. Once finalized, Mike Harding, current Roc Chairman, will take the role of chairman of the merged entity, while Emmett will assume the role of CEO and managing director.
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