Irish oil firm agrees €14m Egypt purchase and seals BP supply deal

Irish oil firm agrees €14m Egypt purchase and seals BP supply deal

Irish exploration company United Oil and Gas has added to its burgeoning presence in Africa with a $16m (€14.3m) acquisition in Egypt.

The Dublin-based company has also signed a significant supply deal with oil super major BP.

United has acquired Egypt-based Rockhopper Energy in a reverse takeover, which - under London Stock Exchange rules - has resulted in a temporary suspension of United's shares.

The deal, expected to close in the final quarter of the year, will bring with it a 22% minority share in the onshore Abu Sennan concession in Egypt - meaning it delivers immediate first oil production to United; 1,100 barrels of oil equivalent per day and 2.64 million barrels in net reserves to be exact.

United will fund the deal partly through proceeds from the recently announced $5m sale of one of its North Sea licences; a share placing; and an $8m loan from BP.

Additionally, United has struck a deal whereby BP will have first call on any oil and gas produced from United's other licences in the UK, Jamaica and Italy.

At the end of last year, United - which is run by former Tullow Oil executives - said it would be targeting a game-changing acquisition during 2019.

In March, the company signed an option agreement to invest in an onshore licence in Benin with it saying the expansion into Africa was potentially "transformational".

Chief executive Brian Larkin used the same word to describe the new Egypt deal.

"This transaction will create a substantially larger company and this production deal will contribute to the significant development potential within our existing asset base," he said.

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