Corporate M&A

MetalNRG SPV Acquires Lincolnshire-focused Oil Company

By Shivangi Jain
October 12, 2020
a minute read
Person's Hand In Front of Sun


LSE-listed natural resource investment company MetalNRG Plc, through a 50%-owned special purpose vehicle BritNRG Ltd., has entered into an agreement to acquire privately-held UK-focused E&P company Sunswept Enterprises Ltd.

The total consideration of approximately £1.9 million represents the gross transaction cost for Sunswept’s issued share capital. However, the net purchase price is expected to be approximately £150,000 after the settlement of a director loan and associated corporation tax consolidation.

In June 2020, the companies had signed a Heads of Terms (HoT), pursuant to which MetalNRG had agreed to acquire and transfer 100% of Sunswept to BritNRG, with the aim of completing the transaction within a three-month timeframe. BritNRG is a newly-incorporated SPV which will be jointly owned (50:50) by MetalNRG and certain international private investors who will become the management team of the operating company. MetalNRG will retain control over the operations of the joint venture.

London-based Sunswept Enterprises holds operated and non-operated interests in six onshore licenses located in Lincolnshire. The company’s portfolio includes the producing Newton-on-Trent, Whisby, and Reepham fields. Upon completion of the acquisition and at current production levels, Sunswept is expected to be net cash-flow positive at around US$43 barrels of oil per day (bbls/d).

“This is a first step for us in the energy sector and we look forward to developing BritNRG together with the private investors,” said Rolf Gerritsen, MetalNRG’s CEO.

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and a confirmation of no-objection to the change of control of Sunswept Enterprises from the UK’s Oil & Gas Authority (OGA).

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