Independent oil and gas exploration firm African Petroleum has said it has crossed the final hurdle ahead of its proposed merger with a privately held Africa-focused company PetroNor.
Oslo Axess-listed African Petroleum agreed to combine with PetroNor for an all-share consideration of around 816 million shares in African Petroleum in March 2019.
African Petroleum had late in June said that “that documentation required by Oslo Børs to confirm the listing status of the combined company was still being finalized. “
This has now been completed as the company on Friday said: “African Petroleum advises that Oslo Børs today has confirmed that the company will retain its listing on Oslo Axess following completion of the Transaction.”
The company said: “…subject to the fulfillment of the conditions for completion as further set out in the extended stock exchange announcement, completion is now targeted to occur during next week.”
Eyas Alhomouz, Chairman Designate of the combined company, said: “We are delighted to have received this approval, representing the final material condition to complete the merger of the two companies.
The Board and management team of the enlarged Company are excited to formalize the merger and look forward to setting in motion the strategies designed to deliver material and sustainable value for the Company’s shareholders.”
Jens Pace, CEO of African Petroleum, commented: “This is an exciting development. We look forward to closing the final chapter as African Petroleum and starting our new story as PetroNor E&P – a company underpinned by reserves and steady production, an experienced team and a well-defined strategic vision to achieve long-term growth.”
As previously reported, PetroNor holds a 10.5% indirect interest in the PNGF Sud fields and the right to negotiate entry into a 14.7% indirect interest in an exploration license covering the PNGF Bis fields, both offshore Congo.
African Petroleum has said that the merger would provide it with diversified, low-risk, long-life, and high-quality producing assets with current net production of around 2,300 bbl/d and medium-term exploration upside in a well-established operating jurisdiction, the firm said.
The company has also said that the deal would enable it to strengthen its ability to preserve and develop the company’s portfolio in The Gambia and Senegal through access to PetroNor’s existing cash, future cash flow, and assets with additional debt capacity.
The Gambia and Senegal arbitration
The situation with offshore assets in The Gambia and Senegal is a complex one with arbitration underway for several of the company’s assets there.
Namely, oil major BP earlier in May struck an offshore exploration deal with the Gambian government for Offshore Block A1, previously held by African Petroleum.
The Gambian government in 2017 said it had ended talks with African Petroleum for the extension of exploration rights over blocks Block A1 and Block A4, stripping the company of its rights in the blocks.
The company replied by stating that it still reserved its rights in relation to the A1 license and would continue with its efforts to protect its interest in the A1 license through an ongoing ICSID arbitration process which also includes arbitration for the A4 license.
In Senegal, operatorship over Rufisque Offshore Profond block was awarded to Total after it was taken away from African Petroleum. The company also initiated an arbitration process last year over its rights there as well as over the Senegal Offshore Sud Profond block.