Egdon Resources plc has agreed to be sold for £26.64 million cash to its majority shareholder Petrichor Partners LP which plans to delist the company.
TERMS
Petrichor is a wholly owned subsidiary of Heyco Energy Group Inc.
The parent company of Heyco Energy Group Inc and Petrichor is Explorers Petroleum Corp, controlled by George Yates whose family has been in oil and gas since the 1920s.
The deal covers Egdon’s entire issued and to be issued ordinary share capital, apart from the 43.79% already owned by or on behalf of Petrichor.
The acquisition, expected to complete during Q3 2023, is at a 96% premium share price of 4.5 pence per share to the closing share price of 2.3 pence on 16 May 2023.
Egdon’s directors hold 14.6m shares representing 2.69% of the company and Harbour Energy plc and Union Jack Oil plc own a total of 62.7m shares (11.53%). All have given irrevocable undertakings to sell.
In total, Petrichor has received irrevocable undertakings for a total 77,382,106 shares (14.23%), giving Petrichor a current total 58% holding in Egdon.
Other notable shareholders include investment manager Patrick Evershed CBE (and family) with 5.93% and Hargreaves Lansdown Asset Mgt with 5.6%.
The court-sanctioned acquisition is subject to court and shareholder approval.
UNDERVALUED
In a statement, Petrichor said that Heyco believed that the public market continues to undervalue its assets, including the “impressive” Wressle development.
“Bringing Egdon into the Heyco Group will create efficiencies, economies of scale, and, most importantly, add valuable assets and experienced personnel to its portfolio.
“Additionally, owning Egdon will allow Heyco Group to more efficiently deploy capital and human resources to its most valuable projects across the UK, as well as Spain and the United States.”
Egdon owns conventional onshore oil and gas assets of Keddington, Fiskerton Airfield Kelsey and its flagship producing Wessle oil field as well as multiple shale gas licences in the East Midlands.
Its interests also include onshore Kirkleatham gas field and offshore non-operated Ceres gas field in the North East; and non-operated onshore Avington and Waddock Cross oil fields in the South East of England.
Heyco was part of the group that began production at the Avington field in southern England in 2007.
Egdon managing director Mark Abbott said that the recommended acquisition provided shareholders with an opportunity to realise a cash exit at an attractive premium.
Mr Abbott and Andrew Hindle formed the company in 1997 and in 1998 awarded their first licence followed by their first operated licence in 2000.
In 2004 the company listed on AIM, and in January 2008 demerged its gas storage business, Portland Gas plc (now renamed Harland and Wolf), and refocused on exploration and production.
HEYCO
Focused on the United Stated and Europe, Heyco has invested in and provided technical advice to Egdon for more than 20 years.
The group’s headquarters are in Dallas, Texas with offices in Roswell, New Mexico, and Madrid.
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