Providence Resources P.l.c., the AIM and IEX listed exploration and development company, announces that it has agreed to acquire a portfolio of producing and development assets in the US Gulf of Mexico from Triangle Oil and Gas Inc., ('Triangle') a private company based in Lafayette, Louisiana. The transaction is subject to regulatory approvals.
The portfolio of assets to be acquired represents all of Triangle's material hydrocarbon assets and comprises interests in 8 producing fields and 2 development assets. Within the portfolio, there are also a substantial number of exploration opportunities. With cumulative net current production of circa 6 MMSCFGD and 300 BOPD (~1,300 BOEPD), this transaction, in line with Providence's stated strategy, trebles the Company's current daily production up to 2,000 BOEPD.
Under the terms of the transaction, Providence will acquire the portfolio for a total consideration of US$67.5 million (approx. ? 43.5 million), payable on completion. The transaction is being fully financed through Macquarie Bank Limited, with whom Providence has a US$ 250 million revolving credit facility. Additionally, Providence has agreed to issue Macquarie Bank Limited with 10 million ordinary shares and has granted Macquarie warrants to purchase 30 million new ordinary shares in the Company at a subscription price of 12 cents per share.
Commenting on the announcement: Mr. Tony O'Reilly Jnr., Chief Executive, said, "This acquisition is great news for Providence and its shareholders, allowing it to substantially increase its daily production rates up to 2,000 BOEPD, whilst also delivering on one of our stated corporate objectives. Not only does this deal allow Providence to generate significant cash flow from the existing production, but importantly, there are substantial additional proven resources to be developed within the portfolio. These operations will also build on and complement our existing production from High Island A-268 and future production from Galveston Island A-155. We look forward to growing our presence in the US Gulf of Mexico and see this acquisition as a springboard for future opportunities."
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