OIL and gas company San Leon Energy said yesterday it had proposed a combination with fellow Irish firm Island Oil and Gas with a view to building a strong Ireland-based oil and gas business.
San Leon, which has assets in Morocco, Italy, Poland, the Netherlands and America, said Island was considering the matter and it was keen to work towards a recommended deal.
It also said it had already received an irrevocable undertaking from Platinum Petroleum, the largest shareholder in Island, that, if within three months, it was to make an offer for Island on the basis of one new San Leon share for every 2.3 Island shares or on better terms, Platinum would accept the offer in respect of 18.4% of Island’s shares.
San Leon said the indicative offer valued Island at £13.6million.
It said it believed there was a compelling strategic fit between San Leon and Island and it had extensive knowledge of Island’s assets in Morocco and the Netherlands and a good working knowledge of a majority of Island’s Celtic Sea and Atlantic Margin assets.
The potential bidder said that, as offshore gas production from the Kinsale field in the Celtic Sea declined, the opportunities presented by surrounding fields such as Island’s Old Head of Kinsale and Schull assets would become increasingly viable.
It said the combined group’s greater financial, technical and operational resources should allow it to retain and develop these fields and create potentially valuable opportunities for a future Celtic Sea gas-storage business.