UK-BASED oil explorer Heritage Oil said yesterday it had agreed to merge with Genel Energy International, part of Turkey’s Cukurova Group, to create an oil producer focused on Kurdistan in northern Iraq.
It said the enlarged company would be worth about £3.46billion and was expected to become a member of the FTSE 100 index.
Heritage said the deal, not yet binding, would be structured as a takeover of Genel by Heritage, which would pay in shares. Cukurova, controlled Turkish tycoon Mehmet Emin Karamehmet, will end up with about 50% of the combined group.
Heritage’s shares, suspended last week after it said it was in merger talks, were up 3% at 603p yesterday, valuing it at about £1.57billion.
The company, with stakes in oil blocks in Uganda and a controlling stake in the Miran block in Kurdistan, said it believed the acquisition would be transformational.