Thursday, December 10, 2009
CANADIAN mining company, Petrominerales has made a £19 million (€21m) offer for the South American assets of Irish oil and gas exploration company, Pan Andean.
The deal is subject to approval from the British high court and current shareholders of Pan Andean – who will vote on the matter sometime next month – but should be completed by the end of February.
In essence, Petrominerales is offering the Irish AIM-listed company’s shareholders 15p per share to take control of Pan Andean’s assets in Peru and Colombia. Pan Andean is the sixth largest licence holder in Peru, at present and it has six drilling locations in Colombia, within its Antorcha licence.
If the deal goes through, Pan Andean in its current form will be left with assets in Bolivia and the Gulf of Mexico, which is its main cash generating asset at the moment.
Those assets will come under the control of newly-named company Hydrocarbon Exploration, which will be headed by current Pan Andean management including chairman John Teeling and managing director David Horgan.
While Hydrocarbon will initially be unlisted, following the completion of the deal the plan is to relist it on London’s AIM next year. In the future, Hydrocarbon is likely to grow aggressively and to bring its Bolivian assets into production.
Meanwhile, Pan Andean management has unanimously recommended the deal to shareholders.
"For some time now, we’ve been attempting to unlock the value of our assets. This opportunity values Peru and Colombia at roughly £18m, whilst shareholders would also retain their interest in our Bolivian and US assets," commented Mr Teeling.
"Although Hydrocarbon Exploration will initially be an unlisted company, we anticipate relisting the business in due course," he added.
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