Vallares to Acquire Iraq Fields in $2.1 Billion Deal

Source: Bloomberg 9/7/2011, Location: Middle East

Vallares Plc, the investment vehicle led by BP Plc (BP/)’s former Chief Executive Officer Tony Hayward, will merge with Turkey’s Genel Energy International Ltd. in a $2.1 billion deal to gain oil fields in Iraq’s Kurdistan region. The transaction will be completed as an all-share reverse takeover and leave current holders of Vallares and Genel Energy with equal stakes. The new company will trade in London as Genel Energy Plc, headed by Hayward as CEO.

Vallares, a so-called “blank check” company founded by Hayward, financier Nathaniel Rothschild and banker Julian Metherell, raised 1.35 billion pounds ($2.2 billion) from investors in June. Today’s deal values Genel’s reserves at $5.90 a barrel, cheaper than all but one member of London’s FTSE 350 Oil & Gas Index. Genel produces 41,000 barrels a day, a figure projected to reach 90,000 barrels by 2013.

“Genel has good assets and their fields were some of the first on stream in Kurdistan,” said Doug Youngson, an analyst at Arbuthnot Securities Ltd. in London. “The deal is good for sentiment in the region.” The company has proved and probable reserves of 356 million barrels, a figure Hayward said would rise quickly given the exploration potential of licenses held by Genel. The cost of finding and developing the oil is low compared with other regions of the world at between $2 and $4 a barrel, he said.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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