Rockhopper Exploration to Buy Mediterranean Oil & Gas

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Rockhopper Exploration (LSE:RKP) is to purchase Mediterranean Oil & Gas (LSE:MOG) for GBP 29.3 million in cash and shares, the oil and gas firm said on Friday.

In a statement, Rockhopper Exploration said its board and Mediterranean Oil & Gas’ board agreed on the deal to acquire the latter at a price 6.50 pence a share, 15.6 percent higher than the latter’s closing share price yesterday.

“This transaction represents an important milestone for the company as we add production to our portfolio and broaden our exploration and development opportunity set,” commented Pierre Jungels, Chairman of Rockhopper Exploration.

Rockhopper Exploration mainly operates in the northern part of the Falkland Islands while Mediterranean Oil & Gas holds assets in Italy, Malta, and Greece.

Jungels said the acquisition is modest considering the company has about GBP147 million but said “the upside potential is significant”.

Keith Henry, Non-Executive Chairman of Mediterranean Oil & Gas, said the shareholders of the company is not left out of the deal as the sale will include payment in shares, enabling the shareholders to still retain “contingent interest” in the existing exploration project of the company in Malta.

MOG shareholders will be entitled to contingent consideration of 3.55 pence a share should the current offshore exploration in Malta proved successful.

Both listed on London’s Alternative Investment Market, RKP shares gained 2.6 percent at the opening of trading to 97 pence, while MOG shares jumped 13.3 percent to 6.375 pence.

 

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