Bahamas Petroleum, Columbus Energy Propose All-Stock Merger

June 11, 2020

Image Credit:  Michail Petrov - AdobeStock
Image Credit: Michail Petrov - AdobeStock

Bahamas Petroleum Company, an oil firm with assets in the Bahamas, and as of recently offshore Uruguay, is set to merge with Trinidad-focused Columbus Energy Resources.

The boards of directors of the two companies on Thursday said they had reached agreement on the terms of a recommended all-share merger by way of a share for share exchange offer to be made by BPC for the entire issued and to be issued ordinary share capital of Columbus.

With Columbus' onshore Trinidad assets, which includes five producing fields, and the Bahamas Petroleum's "highly-prospective" assets in the Bahamas and Uruguay, two companies said the merger would create "create a Caribbean and Atlantic margin focused oil and gas 'champion' , with assets that range across the full spectrum of oil and gas activities, from exploration, appraisal and development to production.

In particular, the companies said, the combined group will have access to high-impact offshore exploration in The Bahamas with drilling expected to take place within the next nine months, material onshore exploration, appraisal and development projects in Trinidad, a material onshore appraisal and development project in Suriname, and longer-term exploration prospects of scale in Uruguay. 

"All of this will be underpinned by existing production onshore Trinidad, which BPC believes can be materially increased at low cost by application of BPC's technical expertise," BPC said.

The merger is to be implemented by means of a Court-sanctioned scheme of arrangement between Columbus and the Scheme Shareholders.

Under the terms of the merger, Columbus shareholders will be entitled to receive 0.803 New BPC Shares for each Scheme Share.

According to the statement on Thursday, the offer represents a value of approximately 2.67 pence per Columbus Share based upon the BPC Closing Price of 3.33 pence per BPC Share on June 10, 2020.

The merger values the entire issued and to be issued share capital of Columbus at approximately £25.1 million, and the Offer represents a premium of 11 percent. to the Columbus Closing Price of 2.40 pence per share on June 10. 2020.

Following the implementation of the merger, the existing Board and management team of BPC will remain unchanged. The management team consists of Simon Potter - Chief Executive Officer, Eytan Uliel - Chief Commercial Officer, Nathan Rayner - Chief Operating Officer, Benjamin Proffitt - Finance Director and Company Secretary, and David Bond - Drilling Director. 

Leo Koot (Executive Chairman of Columbus) will join the BPC Board as a Non-Executive Director (subject to the completion of customary due diligence) and Geoffrey Leid (Managing Director, Trinidad of Columbus) will join the BPC executive leadership team. 

Employment arrangements with Anthony Hawkins (current Chief Executive Officer of Columbus) and Gordon Stein (current Chief Financial Officer of Columbus) will terminate, but both will remain available on short-term consultancy arrangements to assist with transitional matters. Michael Douglas (Non-Executive Director of Columbus) will step down from the Columbus Board.




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