Junior energy firm Trapoil announced Tuesday that it has agreed to buy Jersey Oil and Gas E&P Limited (JOG) for GBP 495,000 ($772,000).
Trapoil said it would issue 2.25 million new shares in order to pay for the takeover. Meanwhile, the firm plans to raise an additional GBP 820,000 ($1.28 million) through the placing of 3.7 million shares in order to help it pursue its strategy of developing a portfolio of producing North Sea assets.
JOG is a shell company whose management team has identified a number of potential acquisition opportunities that are currently undergoing due diligence and subject to ongoing commercial negotiations, according to analysts at investment bank Mirabaud Securities.
As part of the deal, JOG directors Andrew Benitz and Ronald Lansdell will become CEO and COO respectively of the enlarged company.
Benitz commented in a company statement:
"We believe that the enlarged group will be well placed to take advantage of the evolving consolidation opportunity in the North Sea, as may be demonstrated by the billions of dollars of private equity capital raised to pursue projects in the North Sea in recent months."
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