Based in Sharjah, UAE, Dana Gas is a private-sector natural gas company operating in the Arabian Gulf Region and listed on the Abu Dhabi Stock Market. Centurion Energy is headquartered in Calgary and is engaged in oil and gas exploration and production with properties in Egypt, Tunisia and offshore West Africa. It is listed on the Toronto Stock Exchange and London AIM.
The agreement, signed by the Chairmen of both companies in Cairo, Egypt, has the unanimous support of the two Boards of Directors and the Centurion Board will recommend that its shareholders accept the Dana Gas offer. The acquisition will be completed by way of a statutory plan of arrangement and requires the approval of no less than 66 2/3% of the shareholders of Centurion voting at a special meeting of shareholders to be held in early January 2007.
At C$12.00 per Centurion share, the equity value of the transaction is approximately C$ 1.15 billion on a fully diluted basis. Dana Gas will also assume Centurion's net debt of approximately C$99 million, giving the transaction a total value of approximately C$ 1.25 billion, or US$ 1.10 billion.
The offer price represents a premium of 36.4% over the trading price of Centurion shares on October 30, 2006, the last trading day before Centurion announced it had received an unsolicited approach from a third party. It also represents a 55.9% premium to Centurion's volume weighted average closing price for the 20 trading days up to 30 October 2006. The offer price implies a value of US$11.3/proven plus probable boe.
The transaction achieves Dana Gas's stated aim of accelerating its growth strategy through the acquisition of exploration and production (E&P) operations in the Middle East and North Africa region. Centurion's assets complement Dana Gas's existing gas chain activities and expertise in transportation, processing and marketing of natural gas and represent the entry by Dana Gas into the upstream gas sector. The acquired portfolio comprises an attractive combination of existing production and associated cash flow from the producing fields in Egypt, complemented by growth opportunities from exploration assets in Egypt and exploration properties in Tunisia and the Sao Tome/Nigeria JDZ.
"We are pleased to have entered into this agreement with Centurion. We value the relationship upon which this agreement is built and we share a common vision for the importance of the regional gas sector. The complementary operations, strategy and approach to business makes Centurion particularly valuable to Dana Gas," said Hamid Dhiya Jafar, Executive Chairman of Dana Gas. "Centurion is an excellent company with outstanding people who have a proven track record in oil and gas activity in Egypt. We are pleased to offer Centurion shareholders full value for a company that meets perfectly Dana Gas' stated objective of acquiring E&P operations with production and clearly identified exploration prospects for future growth."
Centurion Energy Chairman and Chief Executive Officer Said Arrata added: "Our Board is pleased to support this transaction because of the value it delivers to our shareholders and the opportunities it presents to our employees. We look forward to this unique opportunity with Dana Gas, a pioneer in the Middle East gas industry. Together, the two companies, will provide the region with a strong indigenous private-sector player to develop the natural gas resources of the wider Middle East."
The agreement was reviewed and recommended by a special committee of the board of Centurion, which received the opinion of its financial advisors that the offer is fair, from a financial viewpoint, to the shareholders of Centurion. The terms of the agreement include customary provisions prohibiting Centurion from soliciting any other acquisition proposal but, should an unsolicited offer be made, allowing the board of directors of Centurion to accept and recommend a superior proposal if it is required to do so in accordance with its fiduciary duties. In such event, Dana Gas will be entitled to a termination fee of C$34.75 million payable by Centurion. Dana Gas has the right to match any such superior proposal.
DanaGas (PJSC) is the first regional private-sector natural gas company in the Arabian Gulf Region, established in late 2005 with over 300 reputable founder shareholders from across the Gulf Cooperation Council (GCC) region, and some 425,000 investors from over 100 nationalities worldwide who submitted applications of over US$78 billion over 10 days in the company's regional IPO in late 2005. Headquartered in Sharjah in the UAE and with offices opening throughout the region and its shares listed on the Abu Dhabi Stock Market (ADSM), Dana Gas with its subsidiaries and affiliates hold substantial assets in the transportation by pipeline, processing, and marketing of natural gas within the UAE. It aims to play a major role in the rapidly growing natural gas business throughout the Middle East North Africa (MENA) Region across the entire gas value chain. In addition to its current projects, Dana Gas will be expanding into all elements of the natural gas value-chain, including upstream exploration and production; through the midstream transmission and distribution of gas including LNG trading; and downstream into gas-related industries and petrochemicals. As at close on 9 November 2006, Dana Gas's shares were trading at AED1.66/share, with a market capitalization of AED9,960 million (approximately US$2.7 billion).
Centurion Energy International Inc. is an international oil and gas company headquartered in Calgary, Alberta, Canada. The company is engaged in oil and gas exploration and production with properties currently located in Egypt, Tunisia and offshore West Africa. Centurion was incorporated in 1997 and since then has built a reserve base of over 97 million boe. The expansion of Centurion's Nile delta natural gas properties in Egypt has resulted in a 2005 year-end production rate of 38,000 boe per day and sales for the nine months ended 30 September 2006 of C$137.37 million, an increase of 88.4% over the nine months ended 30 September 2005. A multi-well drilling program is currently underway to further explore and develop Centurion's acreage in the Nile Delta region of Egypt. Additionally, Centurion has a land position of over 4.8 million net acres in Egypt and exploration properties in Tunisia and the Sao Tome/Nigeria JDZ.
Citigroup Global Markets is acting as the financial advisor to Dana Gas. UBS Securities Canada and BNP Paribas are acting as financial advisors to Centurion Energy.
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