Melrose and Petroceltic Plan to Merge
Management teams at Melrose Resources and Petroceltic International have proposed a merger to create a regionally-focused company targeting opportunities in North Africa, the Mediterranean and the Black Sea.
The merger would see an enlarged business own 2P reserves of 84 million barrels of oil equivalent (MMboe) and 2C resources of 357 million barrels, along with un-risked prospective resources of more than 1.3 billion barrels, according to a statement released Friday by the two companies.
The plans have been met largely with enthusiasm by oil sector analysts who follow the companies, both of whose shares are traded on London's Alternative Investment Market.
Analysts from London-based Mirabaud Securities said in a research note published Friday that it believed the two businesses would be on "a surer footing" after a merger.
"At first glance the transaction seems to make good strategic sense for both sides creating a mid-cap E&P business with a complementary suite of assets focused on the MENA [Middle East and North Africa] region," they said.
Mirabaud pointed out that the deal adds a solid production base (28,000 barrels of oil equivalent per day, mainly gas) and 2P reserves (84 MMboe) to Petroceltic that de-risks its earlier stage asset portfolio and, crucially, should open up enhanced funding options for its Ain Tsila project in Algeria.
"Melrose also brings a degree of operating expertise that should be transferable to Algeria enabling Petroceltic to retain operatorship of Ain Tsila post farm-out. For Melrose, Petroceltic brings attractive medium production growth potential in Algeria and the added spice of exploration in Kurdistan and Italy," added Mirabaud.
Meanwhile, analysts at Macquarie Group described the proposed deal as "an attractive merger for Melrose Resources".
However, Oriel Securities said that it was "slightly surprised" by the deal, pointing out that it "appears to ascribe negligible value" to Melrose's Galata gas storage project in Bulgaria.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ITEM Club: More Jobs Losses Expected in NE Scotland due to Oil Slump
- Shell Q&A: What Makes an Ideal Employer in Oil, Gas?
- Shell Takes First Place in Rigzone's Inaugural Ideal Employer Survey
- UK Government 'Must Recommit' to Oil, Gas Sector in Autumn Statement
- UK Government Gives Go-Ahead for Fracking in NW England
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- USA Driving Activity to Increase to All-Time Highs
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension