Rockhopper acquires Mediterranean Oil & Gas

27th May 2014 14:40

Falkland Island-focused oil explorer Rockhopper Exploration has agreed to acquire AIM peer Mediterranean Oil & Gas (MOG) in a 29.3m-pound cash and shares offer. Rockhopper has offered MOG shareholders 6.5p per share, of which three-quarters is in cash and the remainder represented by an offer of 0.0172 Rockhopper shares per MOG share.The deal represented a 31.1% premium to MOG's average volume weighted share price of 4.957p for the three months prior to the announcement.Rockhopper Chairman Pierre Jungels said the deal represented an "important milestone" for the company as it added production prospects to its portfolio and broadened its exploration field away from the Falklands. MOG has potentially nearer-term appraisal and exploration prospects than Rockhopper and the company said the acquisition cost and capital exposure were modest in relation to its own balance sheet, with "significant" upside potential and "an attractive entry platform to one of the most exciting regions in the industry at this time".MOG Chairman Keith Henry said: "This is a good transaction for our shareholders, offering them the combination of both cash and shares in Rockhopper today, while also providing the opportunity to benefit from the potential upside of our Malta well."MOG, which has £10m cash in the bank, simultaneously announced on Tuesday that the operator of its Malta block had spudded on Saturday May 24th and was anticipated to take "a minimum of two to three months to complete operations".Broker Westhouse said the price paid "looks reasonable" and "could presage a wider round of consolidation" in the sector.By 14:50 on Tuesday, shares in MOG were up 3.77% to 6.88p, while Rockhopper was up 3.76% to 96.50p.OH