Canadian oil group Caracal Energy is to buy rivals TransGlobe in a £380million deal as it looks to push into Egypt.
Caracal will pay 1.23 shares for each share of Calgary-based TransGlobe, the companies said last night, to create one of the largest independent Africa-focused oil producers, with current combined oil production of 25,100 barrels a day and a target average of 31,000 to 34,000 this year
The combination also provides increased country diversification, said TransGlobe CEO Ross Clarkson.
“Through the combination of complementary asset bases, we will create a solid regional platform for compounding reserves and production growth,” Caracal Chief Executive Officer Gary Guidry said in the statement.
TransGlobe, which also has assets in Yemen, got about 98 percent of its revenue from Egypt in the third quarter of last year, according to data compiled by Bloomberg.
While the companies described the transaction as a merger, Guidry will remain CEO of the newly-formed Caracal, which will seek a listing on the Toronto Stock Exchange.
Currently, Caracal is listed on the London Stock Exchange and TransGlobe is listed on the Toronto Stock Exchange and Nasdaq.
Caracal, previously called Griffiths Energy International Inc, changed its name and completed an initial public offering in London last year. The company was formed in 2009 by Brad Griffiths, an investment banker who died in a boating accident in July 2011.
The transaction will require regulatory and shareholder approval. Both companies hold meetings in June, and the transaction may close shortly thereafter, the companies said.