Range Resources has launched a plan to merge with Russia and Kazakhstan-focused oil and gas explorer International Petroleum, in an all-scrip off-market deal worth around $105 million.
Range announced today it would offer three of its shares for every two International Petroleum shares, subject to due diligence and regulatory approvals.
The merger is also conditional on Range completing a $20 million capital raising priced at 5.9 cents per share, and providing International Petroleum with a $US15 million secured loan.
Current International Petroleum director Christopher Hopkinson has been nominated to be managing director of the merged company.
Based on Range’s current share price of 5.9 cents, the offer values International Petroleum at approximately $105 million.
The takeover target holds a portfolio of highly-prospective oil and gas acreage in Russia, Kazakhstan and Niger, with total 3P Reserves of 233 million barrels of oil and prospective resources of 761mmbbls of oil and 157 billion cubic feet of gas.
International Petroleum lodged revenue of $US100,000 for the year ended December 31, 2012, for a $US9.8 million loss.
It holds $US123 million in net assets and has around $US30 million in total debt.
Range Resources executive director Peter Landau said International Petroleum’s Russian assets would complement the company’s Trinidad operations, building a significant production base to grow from.
“International Petroleum’s recently acquired assets in the African nation of Niger will also be a strong exploration upside fit with our own portfolio of large potential onshore projects,” Mr Landau said in a statement.
“The merger will build a stronger, more robust company with greater financial and technical resources, with a particular focus on applying its onshore exploration and development expertise to growing production from its pipeline of projects.”
At 11:15AM, WST, Range Resources shares were up 3.5 per cent, trading at 5.9 cents.
