Irish-based oil and gas firm Tullow Oil said today it was considering buying Energy Africa for $500 million to boost its presence in the African oil and gas exploration sector.
Tullow, whose shares fell earlier this month after it abandoned a key African well, said any offer would be in cash with a share alternative. The company added that the deal would be classified as a reverse takeover.
"Tullow has signed agreements with shareholders holding in aggregate over 90 per cent of Energy Africa's issued share capital that allow Tullow an exclusive period of negotiations which may or may not lead to an offer," it said in a statement.
"Tullow has requested that Energy Africa grant Tullow access to such information as may be necessary to allow Tullow to complete its final due diligence," the company added.
Energy Africa operates in Congo, Egypt, Gabon, Mauritania and Senegal, among other countries in Africa.
South African oil refining firm Engen owns 56.5 per cent of Energy Africa. Engen in turn is 80 per cent owned by Malaysian national oil company Petronas.
Tullow Oil shares were temporarily suspended in Dublin and London ahead of its announcement regarding Energy Africa. Its London-listed shares have outperformed the FTSE oil and gas sector by about 6 per cent since the start of 2004.