Heritage Oil to buy £541m Nigerian oil assets from Shell
Heritage Oil has agreed to buy a parcel of Nigerian assets from Royal Dutch Shell and its partners for $850m (£541m), as it seeks to build a major presence in the country.
By Emily Gosden 7:55AM BST 01 Jul 2012
The FTSE 250 company, led by chief executive Tony Buckingham, has formed a Nigerian joint-venture called Shoreline to buy a 45pc stake in a major onshore oil producing block known as OML 30. Shell owned 30pc of the block, with Total and ENI as minority partners. The majority 55pc stake is held by the Nigerian National Petroleum Corporation.
The deal, Heritage’s first foray into the country, will significantly increase its production, from 605 barrels of oil per day (bpd) currently to 11,354bpd. Heritage’s management believes production can be increased further.
The pending acquisition will also represent a more than three-fold increase in Heritage’s proven and probable reserves, to 278m barrels.
Mr Buckingham said the deal would be “transformational” for Heritage.
The deal will be funded through a $550m bridge finance loan from Standard Bank, and a subsequent $370m rights issue. The transaction is classified as a reverse takeover under listing rules, as Heritage’s market value on Friday night was £318m, and as such will need shareholder approval.
Shares will be suspended on Monday, pending an extraordinary general meeting.
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