A deal worth US$16mln sees United pick up Rockhopper’s 22% non-operated interest in the Abu Sennan concession, which yields net production of around 1,100 barrels of oil equivalent per day (boepd).
United will fund the deal partially with a financing deal with BP, which will provide US$8mln, along with a share placing to investors and a potential US$5mln issue of equity to Rockhopper.
It will be treated as a reverse takeover and, accordingly, the company’s shares have been suspended on AIM.
"This is a truly transformational deal for United,” said Brian Larkin, chief executive.
“Not only will it deliver our first production, positive cashflow and significant reserves it also offers very promising infill and exploration upside.
“Having reviewed many opportunities in the last 18 months, Rockhopper Egypt was by far and away the most exciting opportunity and the best strategic fit for our business.”
Larkin added: “this transaction will create a substantially larger company and this production deal will contribute to the significant development potential within our existing asset base.
“Our goal as a management team has been to build a full cycle, oil and gas exploration and production company which delivers exceptional value for our shareholders.
“This transaction is an important step in the realisation of that goal."
Abu Sennan in more detail
The Abu Sennan asset comprises some seven production concessions in the ‘prolific’ western desert region of Egypt.
Presently, it is host to seven wells and it is expected that an ongoing infill well drilling programme has the potential to boost production significantly.
Indeed, the programme is so far said to have lifted gross output by around 1,000 boepd since the start of 2019 – the field is flowing around 5,100 boepd versus 3,700 boepd in 2018.
The package of assets also includes what’s described as a large exploration area which boasts a significant prospect inventory and a historic success rate of around 80%.
On completion of the acquisition United will be partnered with Kuwait Energy (operator, holding 25%), Global Connect Limited (25%) and Dover Investments (28%).