Midwestern Oil & Gas Limited, Nigeria’s leading exploration and production (E&P) company, has made a reverse take-over (RTO) offer to San Leon Energy Plc, an energy company listed in the Alternative Investment Market (AIM) of the London Stock Exchange (LSE), according to sources.
It was gathered that the initial approach for the RTO was done three years ago and the RTO offer now appears to be a natural progression from the initial discussions/offer, and “discussions are now in advanced stages,” the sources said.
According to experts familiar with the deal, they believe the transaction will put the companies in good stead to take advantage of the divestment by oil majors such as Shell, Chevron, Exxon and Agip from the Nigerian market.
Midwestern Oil & Gas Limited, established in 1999 to participate in the 2001 Marginal Field Round, was awarded a 70 percent interest in the Umusadege Field in OML 56, located in the northern area of the Delta State. Midwestern Oil & Gas is the operator and SunTrust Oil Company Limited holds the other 30 percent interest in OML 56.
Current production from Umusadege is about 16,000 barrels of oil per day (bopd), and remaining 2P Reserves are over 42 million barrels of oil.
Midwestern also holds 8.81 percent equity interest in the productive OML 18. It has a 51 percent ownership in Umugini Pipeline Infrastructure Limited, which operates the 12” 51.4km, 45,000bopd capacity Umugini Oil Pipeline from the OML 56 Cluster Group to the NPDC Eriemu manifold. The company also owns 13 percent interest in San Leon.
San Leon has a market capitalisation of about $260 million and holds a 5.40 percent equity interest in OML 18 and a 10 percent interest in Energy Link Infrastructure (Malta) Limited.
