Two companies currently drilling for oil near the Falkland Islands are to merge, as Rockhopper announced a takeover of Falkland Oil and Gas (FOGL).
FOGL shareholders will receive 0.2993 Rockhopper shares in return for each share that they own, the companies said in a statement.
The combined group will be run by Rockhopper executives, while the chief executive and chairman of FOGL will become non-executive directors.
Pierre Jungels, chairman of Rockhopper said: "This transaction enhances Rockhopper's position in the Falkland Islands, with the largest regional acreage position and most discovered resources, coupled with a strong balance sheet. By combining Rockhopper and FOGL, we shall create a more coherent licence ownership structure in the North Falkland Basin."
John Martin, chairman of FOGL said the FOGL Board intends unanimously to recommend that shareholders accept the proposed transaction.
Rockhopper executives told the Financial Times on Tuesday that they believe the deal will help the company to attract a financial backer to help it begin production in the Sea Lion field north of the Falkland Islands.
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