Vallares PLC announced Wednesday that it plans to merge with Genel Energy International Ltd, the largest oil producer in the Kurdistan region of Iraq.
Vallares is an investment vehicle set by up former BP CEO Tony Hayward, along with Nat Rothschild and banker Julian Metherwell. Vallares raised £1.35 billion in a London initial offering ion June and said it would seek to by a company with an enterprise value of £3-8bn reports Bloomberg.
Goldman Sachs and JP Morgan Cazenove advised Vallares on the transaction with the company saying they expect the Kurdistan regional government to ratify the sale later this month. Tony Hayward's investment vehicle is set to receive a 6.67 per cent of the company's share capital on completion of the first transaction, according to Vallares prospectus.
Genel has stakes in two world scale producing oil fields, a major gas condensate discovery and significant exploration acreage, all in the Kurdistan region of Iraq. The takeover will be an all share reverse takeover with Vallares issuing shares worth US$2.1 billion at a price of £10 a share to acquire 100 per cent of Genel.
Tony Hayward will become Chief Executive Officer with Julian Metherwell becoming Chief Financial Officer. The deal is subject to the approval of the Kurdistan regional government Genel has announced.
A further five exploration wells are planned in next twelve months to assess the full potential of the investment. The company will target a resource in excess of £750 million barrels a day to Genel, the Kurdistan oil production Company has confirmed.
"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," he added.