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Qatari investment fund to buy Nigeria-focused Heritage Oil

Out-Law News | 01 May 2014 | 3:20 pm | 1 min. read

Qatari investment fund Al Mirqab Capital has agreed to buy Heritage Oil in a £924 million cash takeover, Heritage has announced.

The purchase of Heritage, whose main production is in Nigeria, will give Al Mirqab “access to a high-growth, producing asset base in Nigeria and a diverse international exploration portfolio”, the Qatari fund said, according to the Financial Times.

Al Mirqab is owned by Qatar's former prime minister and former head of the Gulf state's sovereign wealth fund, Sheikh Hamad bin Jassim bin Jabor Al Thani and his family in a private capacity, reported the newspaper.

Announcing the agreed sale Heritage chairman Michael Hibberd said that the Al Mirqab offer represents "an attractive and certain value for Heritage shareholders."

Hibberd said that the company has built a "diversified portfolio over the past two years" through the acquisition of a major interest in the OML 30 oil mining lease in Nigeria and new exploration licences in Papua New Guinea, as well as the disposal of the Miran well in Kurdistan.

"The integration of OML 30 has provided the company with strong cash flows to support its exploration portfolio and increased value to Heritage shareholders," Hibberd said.

Al Mirqab has offered Heritage 320p per share for the company, which Heritage said is equivalent to 25.2% of its ordinary share closing price at the time of announcing the sale.

As well as its Nigerian production activities, Heritage also produces oil in Russia and has exploration assets in Libya, Pakistan, Malta as well as Papua New Guinea, Reuters reports.

Heritage was founded by Anthony Buckingham, who is Heritage’s chief executive and largest shareholder with a 34% stake in the company. Under the terms of the takeover, Buckingham has agreed to retain a 20% holding in Heritage for at least five years following the sale and serve as an advisor to the company on an exclusive basis for a minimum of five years, a statement by the company said. Heritage expects the deal to be finalised in the third quarter of this year.

For the purpose of the offer Al Mirqab has incorporated a wholly owned new subsidiary, Energy Investments Global Ltd (Bidco).

According to the Financial Times, the Al Mirqab-Heritage deal is the second in recent weeks in which an investment fund has targeted Nigerian oil interests. Earlier this month Singapore's state-backed investment arm Temasek paid $150m to become one of the largest shareholders in Seven Energy, a Nigeria-based oil and gas company, the news agency said.