Description of business:
On 17 August 2012, the boards of Petroceltic International plc ("Petroceltic") and Melrose Resources plc ("Melrose") announced that they had reached an agreement on the terms of a recommended merger (the "Merger") of Petroceltic and Melrose (together the "Enlarged Company" or the "Enlarged Group"). The Merger will create a regionally focused North Africa, Mediterranean and Black Sea independent oil and gas company with a balanced portfolio comprising production, development and high-impact exploration assets.
The complementary asset bases of the two companies, which comprise Melrose's cash generating production base in Bulgaria and Egypt, Petroceltic's potential development upside of the Ain Tsila gas discovery in Algeria and the high-impact exploration portfolios of both companies in the Kurdistan Region of Iraq, Italy, Romania, Bulgaria and Egypt, balanced across proven and frontier plays, will create a diversified, enlarged entity with current production as well as potential medium and long-term upside through exploration and development programmes.
The Enlarged Group will have 2P reserves of 84.2 MMboe, contingent resources of 357 MMboe and unrisked prospective resources of 1,365 MMboe.
Following the Merger becoming effective, existing Melrose Shareholders will hold 46 per cent of the Enlarged Company and existing Petroceltic Shareholders will hold 54 per cent of the Enlarged Company, on an undiluted basis.
The Merger, which will be implemented by means of a court-sanctioned scheme of arrangement of Melrose under Part 26 of the UK Companies Act 2006, represents a reverse takeover for Petroceltic under the AIM Rules and ESM Rules, and as such is conditional, amongst other things, on the admission to trading on AIM and ESM of the Enlarged Company, and the approval by Petroceltic Shareholders.
On 20 September 2012, the boards of Petroceltic and Melrose separately announced that the resolutions to, inter alia, approve the Merger, proposed at the Petroceltic Extraordinary General Meeting, the Melrose Court Meeting and the Melrose General Meeting respectively, as set out in the Admission Document sent to Petroceltic Shareholders and the Scheme Circular sent to Melrose Shareholders, on 24 August 2012, were all duly passed by the requisite majorities.
Petroceltic International plc