Corporate M&A

Reabold Resources Makes Offer to Acquire Additional ~13% Stake in Corallian Energy

By Isha Makkar
April 27, 2021
3 minutes read
Shearwater Platform, UK North Sea

LSE-listed Reabold Resources Plc has made a conditional offer to acquire up to an additional 13.12% of the issued and outstanding share capital of privately-held Corallian Energy Ltd., in a corporate transaction valued at approximately GBP3.35 million. Upon completion, Reabold Resources will hold up to 49.9% of Corallian.

Under the terms of the offer, Corallian shareholders will receive 474 shares of Reabold for each share of Corallian common stock held. Corallian shareholders will receive a total of approximately 469 million common shares of Reabold (assuming a full take-up), valued at GBP0.715 per share (based on Reabold’s closing share price on April 26, 2021, the last trading day prior to the transaction announcement). Based on this, the total estimated equity offer value is approximately GBP3.35 million. Reabold currently holds a 36.87% stake in Corallian.

UK-based Corallian Energy holds interests in seven licenses across four basins in the UK, with a primary focus on License P2596 (containing the Victory gas discovery). In addition, Corallian Energy also holds License P2493 (containing the Sandvoe prospect), and License P2605 (containing the Laxford discovery) in West of Shetland, License P2396 (containing the Curlew-A discovery) in Central Graben, License P2478 (containing the Dunrobin and Golspie prospects) in Inner Moray Firth, and License P2464 (containing the Unst and Quoys prospects) and License P2504 (containing the Oulton Ddscovery) in the Viking Graben Basin.

License P2596 (Block 207/1a) is located in the Northern UK North Sea, approximately 80 km northwest of the Shetland Islands. Awarded in the 32nd Offshore Licensing Round, the license contains the Victory gas discovery in water depths of 158 m.

Victory is a simple, low-risk gas development that has been fully appraised, and requires no additional pre-development drilling. Victory is located near to existing local infrastructure, with development expected to be via a single-well sub-sea tieback. The work program includes an environmental survey on Victory, completing Front End Engineering and Design (FEED), and submitting the Field Development Plan to the OGA by the end of 2021. The first gas from the project is anticipated in 2024. Contingent (2C) Resources attributable to the Victory Discovery are 157 billion cubic feet (Bcf) as of November 2020.

“We see Victory as not only adding significant value to Reabold, but also as one of the lowest risk development projects offered in the 32nd Round and one of the best remaining undeveloped assets in the UK Continental Shelf. The Victory development is likely to be relatively simple as it can utilise nearby existing infrastructure, in particular that of the Greater Laggan Area operated by Total, and as such offers a fast-tracked timeline to production,” said Stephen Williams, Co-CEO of Reabold Resources.

Based in London, Reabold Resources is focused on acquiring direct and indirect interests in oil & gas exploration and producing assets, and currently holds stakes in Danube Petroleum Ltd., Corallian Energy, Rathlin Energy (UK) Ltd., and Gaelic Resources Ltd.

The offer is subject to customary closing conditions, including the receipt of any necessary regulatory approvals and the passing of a resolution by the Corallian shareholders. The offer will remain open for acceptances by Corallian shareholders until May 6, 2021, or such later date the companies may agree to, but not later than May 28, 2021, upon which date the offer will automatically lapse.

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