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EurOil INVESTMENT EurOil

Deltic spurns takeover

offer from Reabold

UK OIL and gas investor Reabold Resources said UK since the early 1970s, and said it wanted to
on July 17 it was “disappointed” and “surprised” engage with Deltic’s management to walk them
Deltic says it sees no that takeover target Deltic Energy had spurned through the field’s upside.
rationale or synnergy in its offer, urging the London-listed junior to Deltic had also criticised Reabold’s offer for
the move. reconsider. not taking into account its “significant non-
Deltic said on July 16 it had “unequivocally cash assets,” such as shares in two wells it plans
rejected” Reabold’s all-share bid that valued to drill with Royal Dutch Shell at the Pensacola
the company at GBP12.34mn ($15.7mn), or a and Selene prospects in the North Sea. Nor was
GBP1.2mn premium on its market capitalisation Delta’s cash balance of GBP13.2mn, as of the end
at the time. of March, considered.
Deltic, formerly known as Cluff Natural Deltic will not drill its first well with Shell for
Resources, said it had a “detailed understanding” another nine months, and in the meantime, will
of a number of Reabold’s investments, including continue to burn through its cash reserves by
the West Newton oil and gas find in northern paying for corporate expenses, Reabold said.
England. It has “serious concerns” about the “Accordingly, Reabold strongly believes in
“technical viability, materiality and limited the merits of the possible offer and will seek to
potential upside” of these assets. engage with certain Deltic shareholders, includ-
It concluded that there was no “strong ration- ing those with which it has already had initial
ale, commercial logic or sufficient operational conversations regarding the strategic merits of
synergies that would justify a combination of the possible offer,” Reabold said. “Reabold hopes
the two businessnes.” that, should Deltic shareholders be supportive of
Reabold urged Deltic to reconsider. It argued the possible offer, they are not denied the oppor-
that the company’s assessment of West Newton tunity to decide on its merits.”
seemed to stem from datasets from 2017, before However, Deltic’s largest shareholder, IPGL
Reabold and its partners drilled the successful Holding, issued a statement on July 21 saying it
A2 well, which suggested the presence of a major stood by the company’s management in reject-
oil column. ing the offer. The bid is too low, IPGL said, while
Reabold has touted West Newton as the also echoing Deltic’s concerns about Reabold’s
largest onshore hydrocarbon discovery in the portfolio and a lack of a rationale or synergies. ™

P16 www. NEWSBASE .com Week 29 23•July•2020