Dublin-based oil and gas explorer Petroceltic is to merge with British exploration company Melrose Resources.
The two exploration companies aim to create a "regionally focused North Africa, Mediterranean and Black Sea independent oil and gas company with a balanced and diversified portfolio”.
Under terms of the merger, Melrose shareholders will receive 17.6 new Petroceltic shares for every Melrose share.
The merger values Melrose shares at approximately £165 million.
The enlarged Company will be led by a management team comprising Brian O'Cathain of Petroceltic as chief executive officer and David Thomas of Melrose as chief operating officer.
The boards of Petroceltic and Melrose believe the merger will enhance financial flexibility of the enlarged group, enabling it to pursue a balanced growth strategy.
The enlarged group will be capitalised with a new $300 million facility provided by HSBC.
Petroceltic International was recently awarded two licences offshore Italy. The exploration licences will cover two sites in the central Adriatic, and run for six years. The Dublin and London listed company has had a strong presence in Italy since 2005. It has four exploration permits in the central Adriatic area, including the Elsa discovery.
