SAN LEON Energy, the gas and oil exploration company chaired by former Smart Telecom chief Oisín Fanning, has made an approach for Dublin-based exploration company Island Oil Gas.
In a statement, the company said that it had approached Island with a proposal for the “combination of the two companies with a view to building a strong Irish-based oil and gas exploration and development business”.
San Leon has made an offer of 10 pence per share for Island’s entire issued share capital, valuing the company at £13.6 million.
This represents an increase of approximately 31 per cent on Island’s closing share price of 7.625 pence on October 14th.
Mr Fanning said that the company’s proposals “represent a fair basis for a possible combination” and that San Leon looks forward “to engaging constructively with the board of Island with a view to consummating a recommended transaction”.
San Leon said yesterday that it had received support from Platinum, the largest shareholder in Island.
In a statement, Island confirmed that it has received a “preliminary proposal” from San Leon and that “a further announcement will be made in due course”.
San Leon was established in 2002 and floated on the London AIM market in September 2008. Its main interests are oil and gas projects in North America, Morocco and Europe.
Last month, the company announced that it had raised £6.3 million (€7 million) to fund projects in Morocco, Poland, Italy and the United States.
Island was founded in 2003 and owns various licences and option agreements in Ireland’s offshore fields.
More recently, it had focused on expansion into Albania and Morocco.
In a statement yesterday, San Leon said that there was “a compelling strategic fit between San Leon and Island”.
It said that a merger would benefit from San Leon’s “extensive knowledge” of Island’s Moroccan onshore and offshore assets and its Netherlands offshore Amstel Field. It said that the combination of the two companies’ Moroccan assets should offer “enhanced returns”.
San Leon also has a “good working knowledge” of a majority of Island’s Celtic Sea assets and Atlantic Margin assets.
It said that a merger would allow the companies “to retain and develop these fields and create potentially valuable opportunities for a future Celtic Sea Gas Storage business”.
It also said that it would undertake a strategic review of Island’s Albanian assets.
