RockRose Energy Plc (LON:RRE) has announced a transformational deal to acquire a portfolio of producing North Sea assets, which would give it as much as 7,000 barrels of oil per day.
The company is to acquire Idemitsu Petroleum UK Limited, which has stakes of between 6.8% and 50% in ten producing fields operated by larger groups including Repsol, Shell and Premier Oil.
It is a large deal for RockRose, a standard listed shell in London, and as such it will be classified as a reverse takeover, meaning that trading in the share has been suspended.
"RockRose is continuing to deliver on its stated strategy of building a business through the acquisition of mature producing assets,” said Andrew Austin, RockRose chairman.
“We believe that this acquisition is a significant one for the company and that this portfolio also has a lot of potential for extended field life and gives Rockrose access to significant tax losses."
He added: "We continue to review further acquisition opportunities in North West Europe and, post completion of this along with the previously announced Maersk, Sojitz and Egerton transactions by the end of this year, will have established a material business in the North Sea, set to deliver value to our shareholders."
Significantly bigger deal
Oil companies expert Malcom Graham Wood, in his daily blog, commented on the transaction which he described as being “significantly bigger magnitude.”
He highlighted that Austin is “as confident that one can be” that RockRose shares will be restored for trading before Christmas.
“On the facts available it is clear that this is a potentially company making deal that puts RRE well ahead of its target of production, by the end of next year a conservative 8,000 barrels per day,” the analyst said.
“The assets that have been bought from Idemitsu comprise working interests in 10 fields, employees and a London office which puts RRE into a bigger bracket, as promised at the time of the original raise.
“The deal is funded out of existing facilities and cash resources and I suspect a financed decommissioning package which we should discover when the readmission document and CPR are published.
“As a result of this it is impossible at the moment to work out a cost per barrel of the acquisition but I think it might turn out to be very attractive. More will be revealed when the aforementioned documents are published but I would guess that the irritation of suspension will be more than repaid by the reward when the quote is restored.”