No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Gulf Keystone Petroleum is to merge with ShaMaran Petroleum and quit the London market, it was announced on Tuesday.
The $601m tie-up, which is set to complete mid-2027, will create one of the largest producers operating in Iraq's oil-rich Kurdistan region, with combined working interest production of 53,000 barrels of oil per day and a likely market cap of more than $1bn.
Under the terms of the deal, ShaMaran shareholders will receive newly-issued Gulf Keystone shares equivalent to an aggregate amount of around $601m for the entire issued share capital, equating to 0.075 shares in Gulf Keystone for each share held in ShaMaran. Existing shareholders of Gulf Keystone will also receive a special dividend of $50m.
Once complete, shareholders in the two companies will own around 50% each of the new business. The new company will then uplist to the Euronext Oslo main market, with Gulf Keystone eventually cancelling its London Stock Exchange listing. ShaMaran
David Thomas, Gulf Keystone chair, said: "The merger creates a stronger company with greater scale, a highly complementary portfolio and a stronger cashflow portfolio."
Chris Bruijnzeels, his opposite number at ShaMaran, added: "The Keystone merger is the logical continuation of the Kurdistan consolidation story, especially given the physical proximity of our assets.
"The ShaMaran board has been supportive of building a larger, more efficient vehicle for some time, and we expect there will be additional opportunities for growth open to the combined company, both in Kurdistan and Federal Iraq."
The deal has already won approval of the company's two biggest shareholders, the Canadian-Swedish Lundin family - which owns 25.6% of ShaMaran - and Lansdowne Partners Austria, which has a 13% stake in Gulf Keystone.
As at 1145 BST, Gulf Keystone's London-listed shares had sunk 8% to 207.5p, while ShaMaran's Stockholm-listed stock was up 3%. ShaMaran is listed in Norway and Sweden, incorporated in Canada and domiciled in Bermuda.
See latest RNS on Sharecast