17th Mar 2014 08:45
LONDON (Alliance News) - Caracal Energy Inc Monday announced a proposed merger with Canada-based TransGlobe Energy Corp to create a major African-focused oil producer.
The oil and gas exploration and development company said the two parties have entered an agreement to merge by way of an exchange of shares based on March 14 closing prices, creating a company with a combined market capitalisation of roughly USD1.8 billion.
Under the deal, each shareholder of NASDAQ-listed TransGlobe will receive 1.23 new shares in Caracal in exchange for each TransGlobe share held, giving Caracal shareholders ownership of roughly 65.6% of the combined company.
The companies, which operate in Chad, Yemen and Egypt, together have current oil production of 25,100 barrels per day and a 2P reserve base of 135 million barrels of oil.
Caracal said together the companies are carrying out between 30 and 42 high-impact exploration wells in Chad by 2016, targeting at least 70% of its total 883 million barrels of gross risked mean prospective resources.
The company added that the merger would provide a platform for future organic and acquisition growth in Africa and said their combined business plans are fully funded with a cash position of USD302 million and no debt at December 31.
Caracal shares were down 0.5% to 408.03 pence in early trading Monday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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