Prax swoops on Hurricane Energy in £249m deal
Prax Exploration & Production is acquiring North Sea focused Hurricane Energy in a cash and shares deal worth £249 million.
Hurricane is active west of Shetlands on the UK Continental Shelf and has a 100% operated interest in the Lancaster Field.
Each Hurricane shareholder will be entitled to receive 12.5p for each Hurricane share, representing a premium of about 84%. to the closing price per Hurricane share on 1 November 2022, the last business day prior to the announcement of the formal sale process.
Prax is a wholly-owned subsidiary of UK-headquartered State Oil, an international integrated and diversified midstream and downstream energy group. It has revenues of c. $10 billion, and 1,274 employees across seven countries.
It said it is committed “to building a sizeable upstream business in the North Sea”, complementing its midstream and downstream activities to create an integrated business, and it is focused on rapidly developing its oil and gas portfolio via acquisitions.
The acquisition of Hurricane is the first strategic step, providing a platform from which its upstream division will grow.
Philip Wolfe, chairman of Hurricane, commented: “I am pleased by the outcome of what has been a thorough and exhaustive formal sale process.
“The Hurricane board believes that the acquisition will deliver more cash than Hurricane shareholders are likely to have received from Hurricane’s Lancaster oil field, on a much expedited timeframe, as well as mitigating the risks associated with production from a single well development.
“In addition, the deferred consideration units offer the opportunity to share in future production out-performance or higher oil prices, as well as revenue from future acquisitions by Hurricane. Accordingly, the board of Hurricane is pleased to recommend the acquisition to shareholders.”
Sanjeev Kumar Soosaipillai, chairman and CEO of the Prax Group, said: “We have a strong balance sheet, which provides a solid platform to execute our strategic growth plans, the next leg of which is to build a scaled upstream business.
“We see great strategic value in being a fully integrated energy company and have invested in experienced upstream and M&A management teams to drive this.
“The acquisition of Hurricane will provide a strong foundation for further upstream investments. We look forward to the Hurricane team joining the Prax family.”