United Oil & Gas PLC (AIM:UOG, FRA:1UO) (AIM:UOG) has agreed to sell its Italian assets to Prospex Energy PLC (AIM:PXEN) (AIM:PXEN) for €2.165mln in cash.
United will immediately receive a €108,235 deposit and the deal is expected to close, subject to regulatory approval, later in 2021.
In a statement, the company highlighted that the transaction is valued at a modest premium to the book value for the Italian business as at December 31 2020. It removes any further development expenditure at the Selva development project.
“We believe that now is the optimal time to focus our portfolio on our low-cost production business in Egypt and high impact exploration opportunities in the Caribbean and Latin America,” said chief executive Brian Larkin. “The proceeds of this transaction and those of the previously announced North Sea asset divestments will further strengthen our balance sheet to support this growth strategy."
The deal has an effective date of January 1 2021.