Lundin Petroleum to acquire Valkyries Petroleum
Posted: 05 June 2006
 Send this article
 Print this article
Lundin Petroleum is to acquire all the outstanding shares of Valkyries in exchange for Lundin Petroleum shares in an all share transaction. Valkyries shareholders will receive one Lundin Petroleum share for each Valkyries common share held.
The transaction values Valkyries at approximately $700 million. The closing price of Lundin Petroleum shares on 26 May 2006 was about $12.24 and the 30-day weighted average closing price of Lundin Petroleum was about $13.40 or CAD 14. The closing price of Valkyries on 26 May 2006 was CAD 12.51 (approximately SEK 82.68 or USD 11.31).
Valkyries' main assets include a growth oriented production, development and exploration portfolio of oil and gas projects in Russia. Key projects comprise a 50% interest in the producing Sotchemyu-Talyu Field in the Komi Republic; a 51% interest in the producing Caspian Field in the Kalmykia Republic; a 50% interest in the Ashirovskoye producing field in Orenburg; as well as a 70% interest in the highly prospective Lagansky exploration block offshore in the Caspian Sea. Valkyries has recently entered into a binding agreement to purchase a 50% interest in the producing North Irael Field, located in the Komi Republic.
The Lundin Petroleum strategy and major rationale for the deal is to create a new core area in Russia for the company. Lundin Petroleum intends to build upon the existing asset base of Valkyries and grow the Russian business through a proactive acquisition strategy.
The transaction provides the following anticipated benefits to Lundin Petroleum and Valkyries shareholders:
- A liquid consideration for Valkyries shareholders that fairly values the asset base, including a significant value for exploration potential.
- The opportunity through the combined Lundin Petroleum to grow the Russian business with a wider access to technical expertise.
- The combined entity will have access to a greater level of financial capital which will provide a greater range of deal opportunities.
Ashley Heppenstall, President and CEO of Lundin Petroleum commented: "This transaction creates a new core area for Lundin Petroleum in Russia. Valkyries has developed a management team which has built a good portfolio of producing, development and exploration assets as well as a number of new business opportunities through its local network. We intend to complement the existing Valkyries team with Lundin Petroleum's technical and financial capacity to grow the Russian business. Russia is one of the few remaining countries in the world with the access to significant reserves and production which we believe is key in continuing to grow our business in future years."
Valkyries President and CEO Keith Hill commented, "Valkyries' mandate has been to aggressively pursue reserves, production and cash flow growth through strategic investment in production, development and exploration assets with a primary focus on opportunities in Russia. We have successfully built a platform for growth with our Russian assets and now want to enable our shareholders to capit alize on a whole new phase of rapid growth that a company like Lundin Petroleum can provide. Lundin Petroleum is a multi-billion dollar market cap company with current production in excess of 33,000 boepd and growing. Its financial and technical strength will ensure that stakeholders will garner the most value possible from the Russian assets and benefit from exposure to a world class portfolio of global production and exploration assets."
|
The full content of Pipeline Magazine – and more - is now available online.
You can access from anywhere. You can search the archives. Email an article to a colleague. Keep your own file of cuttings. more details
Pipeline Magazine is free to paying subscribers. Non-subscribers get a FREE TRIAL. Register here
Read the latest issue.
*Limited time only |
powered by  |
Posted by Editor Pipeline Magazine
Information supplied by companies
or PR agencies who are responsible for content. Send press releases
to info@pipelinedubai.com |
