Bahamas Petroleum to Merge with Columbus Energy Resources in All-Share Deal
AIM-listed E&P companies Bahamas Petroleum Company Plc (BPC) and Columbus Energy Resources Plc have entered into an agreement to merge, creating a “Caribbean and Atlantic margin focused oil and gas champion.” The all-share merger transaction will be completed by way of a share for share exchange offer to be made by BPC for the entire issued and to be issued ordinary share capital of Columbus.
Under the terms of the agreement, shareholders of Columbus will be issued 0.83 new shares of BPC for each share of Columbus held. Based on BPC’s closing share price a day prior to the transaction announcement, the offer is valued at GBP25.1 million, with the offer price of GBpence 2.57 per Columbus share representing a premium of 11% to the company’s closing price a day prior to the transaction announcement. Upon completion, shareholders of Columbus will jointly hold a 24% stake in the combined entity.
Upon completion of the transaction, the combined entity will hold a portfolio of upstream interests across The Bahamas, Trinidad, Uruguay and Suriname. According to BPC CEO Simon Potter, “this enhanced asset base in Trinidad, Suriname and Uruguay is entirely complementary to, and in no way detracts from, our determined focus on our existing exploration base asset in The Bahamas, where we will see the build-up to the drilling of the Perseverance #1 well in late 2020 or early 2021 – targeting P50 prospective oil resources of 0.77 billion barrels, with an upside of 1.44 billion barrels.”
Commenting on the deal, Columbus’ Executive Chairman Leo Koot said that “following the deal Columbus shareholders will gain access to the high impact Perseverance #1 exploration well in The Bahamas, which we expect will be drilled in Q4 2020/Q1 2021.”
“In return, BPC will gain access to our existing production base in Trinidad and our strong appraisal/development portfolio, mainly in the South West Peninsula in Trinidad and the Weg Naar Zee block in Suriname,” he added.
The transaction, which remains subject to several closing conditions including the receipt of shareholder approvals, is expected to be completed by August.
Gneiss Energy acted as financial advisor to BPC on the transaction, whilst VSA Capital advised Columbus.