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Independent oil and gas producer Valiant Petroleum is considering selling itself or merging with another business, among other options, to maximise value for shareholders within the next two to four years, the company said today.
“As part of the planning for 2014 to 2016, the Board has decided to review the full range of strategic options available to the Company to maximise the value generated from the existing asset base and cash generated from production,” the company said in a statement.
The North Sea-focussed firm appointed Morgan Stanley & Co. to conduct a review of options, which also include farm-in agreements, disposal of assets, and buying another company.
“We are keen to ensure we position this business to achieve its complete potential,” Chief Executive, Peter Buchanan, stated, in providing rationale for the move.
Valiant’s decision to explore the possibility of a takeover of the company was released alongside its financial status for the first half of the 2012 fiscal year, which revealed a drop of nearly 40% in revenue for the comparable period last year, due to lower production levels.
Gross profit from the January to June period, however, was down from US$93.65 million to U$48.3 million, resulting in an operating loss after the firm had to write off about US$76.4 million as cost of unsuccessful exploration and other historical licencing expenses.
Notwithstanding, the company said the target average production for the whole year is still set between 7,000 and 8,500 barrels of oil per day, roughly the same as last year’s, as the second half of the year is expected to be “stronger”.
Despite no direct statement as to the company’s end year revenue and profit, investors on the Alternative Investment Market placed their bet on the positive outlook for production for the remainder of the year.
Shares reached as high as 504.30 pence this morning and went down to 488.25 pence by 10:18 AM GMT. Share price closed at 460 pence yesterday, valuing the company at £187 million – probably the starting bid price as the company is now officially in an “offer period” starting today.
Company Spotlight
Valiant Petroleum plc concentrates its portfolio of exploration, appraisal, and development assets around the North Sea, Barents Sea, and Norwegian Sea, encompassing the territories of the United Kingdom, Norway, Shetland Islands, and Faroe Islands.
Established in 2004, the company joined trading on AIM in 2008 .
