Heyco Energy Group, Inc., through its subsidiary Petrichor Partners LP, has completed the acquisition of United Kingdom (UK)-based energy firm Egdon Resources plc, the two companies said in a recent joint statement.
The acquisition was made in an all-cash transaction valuing Egdon shares at ($0.055) 4.5 pence each for a total of approximately $32.38 million (GBP 26.64 million), according to offer documentation from Egdon.
The acquisition, which was unanimously recommended by Egdon’s board in May, will add to Heyco’s expanding portfolio. Heyco said it has invested in and provided technical advice to Egdon for more than two decades through Petricor and other entities.
Founded in 1997, Egdon holds interests in 33 licenses in the United Kingdom (UK) with exposure to the full cycle of opportunities from exploration through to development and production of oil and gas. The company’s flagship Wressle field is the onshore UK’s second-highest-producing oil field after Wytch Farm, according to the statement.
Heyco said in the offer documentation it believes “the timing is right to acquire Egdon and take it private”, as the public market “continues to undervalue its assets, including the impressive Wressle development”. Heyco continued that “bringing Egdon into the Heyco Group will create efficiencies, economies of scale, and, most importantly, add valuable assets and experienced personnel to its portfolio”.
“Additionally, owning Egdon will allow Heyco Group to more efficiently deploy capital and human resources to its most valuable projects across the UK, as well as Spain and the United States”, Heyco added.
“Egdon is a very strong enterprise with current production and a number of exciting conventional, unconventional, and renewable opportunities”, Heyco President and CEO George Yates said. “The acquisition allows us to bring Egdon fully into the HEYCO family of companies and strategically leverage our collective technical and operational expertise across projects in the UK, Spain, and the United States”.
“There is a great deal of mutual respect between Egdon and HEYCO built up over many years of working together”, Egdon CEO Mark Abbott said. “We look forward to Egdon’s next chapter as a private company within the wider HEYCO family where the combined financial and human capital will help us reach our vision of providing locally derived, secure, affordable, and sustainable energy to meet the UK’s evolving energy needs”.
While Egdon’s primary focus is on conventional oil and gas projects, it also has significant shale assets that are currently impacted by the UK’s moratorium on hydraulic fracturing, the statement said. “With its sizeable shale acreage in the Gainsborough Trough, Egdon has smartly positioned itself to be a leader in delivering critical volumes of natural gas to UK households and businesses should lawmakers support local, unconventional development”, Yates noted.
According to the statement, data shows that the Bowland Shale in the Gainsborough Trough is a premier opportunity with “gas in place per square mile exceeding most of the largest natural gas shale plays in the United States”.
Dallas-based Heyco is an energy portfolio company with subsidiaries active in upstream oil and gas operations in the USA and Europe. HEYCO is privately owned by members of the Yates family of Southeastern New Mexico, who have been active in the oil and natural gas business since the 1920s.
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