Aurelian’s Quest Ends with San Leon Deal
Aurelian Oil & Gas announced that it has entered into a merger with San Leon Energy, bring together two leading player in the European unconventional gas sector.
San Leon will pay about 61.6 million pounds ($98 million) in stock for Aurelian, a 13 percent premium to last week’s closing price. Aurelian shareholders will hold 34 percent of the enlarged company and San Leon shareholders will hold 66 percent post-closing.
Stating that it likely required additional technical and financial resources to unlock the its full potential, Aurelian, which is active in Poland, Romania and Slovakia, had announced last February that it had commenced exploring "strategic options" with the possibility of a sale or merger among the options under consideration.
Aurelian key asset is the Siekierki tight gas play in Poland, with estimated total contingent resources at 422 billion cubic feet, with gas-initially-in-place of 1,992 billion cubic feet. However, Siekierki has experienced technical challenges and lower than expected flow rates have set back Aurelian's unconventional programme.
Rowen Bainbridge, Chief Executive of Aurelian stated: "The proposed merger between Aurelian and San Leon creates a leading upstream position in Poland with complementary play types, capabilities and relationships covering both conventional and un-conventional resources.”
“A merger with Aurelian makes perfect sense for the shareholders of both companies. The combination of cash resources and the Polish asset base alone creates an obvious and exciting opportunity to realise substantial growth,” Oisin Fanning, San Leon’s Executive Chairman of San Leon.
“The combined entity offers shareholders material conventional and unconventional plays in stable and highly import-dependent countries.”
San Leon said that it had received the support of key Aurelian shareholders including Kulczyk Investments S.A.,Toscafund Asset Management LLP and Lord Sainsbury representing approximately a 47 per cent of Aurelian shares.
The combined entity will be that creates the largest foreign holder of unconventional gas concessions in Poland.