MercoPress, en Español

Montevideo, September 20th 2020 - 21:40 UTC

 

 

Rockhopper Exploration sells Ireland's United Oil stake for €3.4m

Friday, August 28th 2020 - 08:24 UTC
Full article 2 comments
“We are delighted to have attracted such strong support from institutional and private investors at a time of relative uncertainty within our sector,” said United CEO Brian Larkin. “We are delighted to have attracted such strong support from institutional and private investors at a time of relative uncertainty within our sector,” said United CEO Brian Larkin.

Rockhopper Exploration has sold its 18.3% stake in Ireland-based United Oil & Gas for US$ 4m (€3.4m). The deal announced tonight concludes United’s reverse takeover earlier this year of Rockhopper’s Egyptian subsidiary and its operations in the Abu Sennan oil field for US$ 15.5m (€13m).

Rockhopper, which is focused in the Falkland Islands, effectively underwrote that deal by accepting as partial payment more than 114 million new shares in United Oil. It originally was not supposed to sell those shares for 12 months.

However, both firms announced in post-trading statements that those shares have been sold in their entirety to a mix of institutional and private investors for 2.66 pence (€0.03) each, following an investor road-show to drum up interest. That is at a 6.7% discount to United's closing share price.

Rockhopper said this meant its original US$ 11.9m investment to acquire Egyptian oil assets four years ago has produced a pay-out of US$ 15.5m. That is about US$ 500,000 less than Rockhopper’s expected gain from the Egyptian sale when it was announced in February. At that time, United paid Rockhopper US$ 11.5m in cash and issued the 114.5 million shares with a stated value of US$ 4.5m.

But given the battering in value that many oil assets since have experienced during the Covid-19 crisis, both sides expressed relief that Rockhopper had been able to cash in its shareholding so quickly and at close to the original valuation.

“We are delighted to have attracted such strong support from institutional and private investors at a time of relative uncertainty within our sector,” said United chief executive Brian Larkin, a former executive at Tullow Oil.

Mr Larkin said the placing of Rockhopper’s shares was oversubscribed and “strengthens the company’s shareholder base considerably”.

He thanked Rockhopper executives “for the important role they played in facilitating our transformational acquisition of Rockhopper Egypt. They have been an excellent partner and enabled United to achieve this orderly transition.”

Rockhopper is focused on exploiting South Atlantic oil fields in Falkland Islands waters.

“The monetization of our entire shareholding in United after a short holding period of under six months strengthens our balance sheet at a particularly challenging time for the sector,” said Rockhopper chief executive Sam Moody.

Rockhopper’s representative on the United board, Stewart MacDonald, has stepped down as part of the shares sale.

Top Comments

Disclaimer & comment rules
  • Billy Hayes

    RKH is doomed. A company with no income, bad investments and expensive directors.

    Aug 28th, 2020 - 09:50 am 0
  • Dirk Dikkler

    @ “ Billy Hayes”, its like a carbon copy of how Argentina`s Oil Industry is run.

    Aug 28th, 2020 - 04:49 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!