Soco acquires Egypt-focussed Merlon Petroleum

SOCO is rebuilding its business with the proposed USD215 million acquisition of Merlon Petroleum.

Merlon will significantly diversify the SOCO business adding Egypt as a new base from which to build a MENA portfolio. The acquisition will double SOCO's 2P reserves and production through the addition of 24mmbbl of oil.

Merlon's key asset is its 100% interest in the El Fayum licence which currently produces at c.7,000bbopd. The block contains 37mmbbl of contingent resources for SOCO to exploit which could take production beyond 15,000bopd. Furthermore, the northern area of the block is unexplored which SOCO will be keen to go after - management has already mapped 20 leads and prospects to be drilled between now and 2020.

The acquisition is to be financed by a mix of cash (up to USD158 million), assumption of debt (USD22 million) and issuance of 66 million new shares to Merlon's existing shareholders. The acquisition is expected to complete in H1 2019.

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SOCO terminates merger talks with Kuwait Energy

Soco has formally terminated merger talks with Kuwait Energy over valuation differences. Full press release from Soco below.

On 8 January 2018, SOCO International plc (“SOCO”) announced that it was in preliminary discussions with the newly-constituted Board of Directors of Kuwait Energy plc (“Kuwait Energy”) regarding a potential transaction.

SOCO confirms that it has terminated these discussions because it could not reach agreement with Kuwait Energy on the basis for an acceptable transaction.

SOCO’s Board remains committed to its strategy of shareholder value creation through sustainable cash returns to shareholders and growth of the business. The SOCO team, which has a track record of delivering shareholder value through asset acquisition and monetisation, delivering large scale developments, and returning capital to shareholders, evaluates M&A opportunities with reference to strict strategic, financial and operational criteria and only pursues transactions if they are determined by SOCO’s Board to be in the best interest of shareholders. SOCO’s Board continues to evaluate opportunities in accordance with these criteria.

Source: https://www.socointernational.com/statement-on-discussions-with-kuwait-energy-plc

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