Aussie explorer Lochard hunts for a new buyer

OIL and gas explorer Lochard Energy is putting itself up for sale.

The exploration firm, which has a 10 per cent interest in the Athena field in the North Sea, last year tried to farm out two other discoveries, but offers fell short.

Australia-based Lochard, which is listed on junior stock market Aim, said: “Following discussions with a number of parties regarding a farm out, the board believes that there would be a higher level of interest were they to seek a buyer for the company.”

Production started at the Athena field in June, and current output stands at 10-11,000 barrels of oil a day. The oil field, which is operated by Ithaca Energy, is Lochard’s flagship asset and has 18m barrels of oil in reserve, of which 2m belong to Lochard.

The sale comes as Lochard reported a pre-tax loss for the first half of the year of A$7.76m (£5m), up from A$4.38m the year before.

Revenue was up to A$1.81m, from A$20,000 the year previously.

Non-executive chairman of Lochard Clive Carver said yesterday: “The difficulties of the past are now quantified and are now behind us.

“Our immediate strength comes from the continuing cashflows from our interest in the Athena field, which after summer 2013 are expected to become substantial,” he added.

Lochard declined to comment on any interest from buyers, or put a price on the deal.

The shares gained 7.27 per cent on the news, closing at 7.38p.

ADVISERS CIBC WORLD MARKETS

ASHLEY GARDYNE
CIBC

CIBC World Markets, based in Canada, is acting as the financial adviser on Lochard Energy’s sale. Ashley Gardyne, executive director of energy investment banking at CIBC, is the lead on the deal, working alongside colleague Sameer Peethe, also an executive director. Prior to joining CIBC, Gardyne worked for RBS, ABN Amro and the Reserve Bank of New Zealand and gained a Master’s degree in finance from the University of Otago in New Zealand. Gardyne has experience working with junior companies. Earlier this year he advised Dragon Oil on its possible merger with Bowleven. CIBC is also no stranger to smaller natural resources companies, as it advised Yamana Gold on its acquisition of Extorre in June. Meanwhile, finnCap is acting as the adviser and broker for Lochard, and worked with Lochard earlier this year when it listed on the junior stock market. Matthew Robinson, corporate finance director at finnCap, is the lead adviser. He has provided takeover advice to resource companies including Aim-traded Kopane, which was bought by fellow Aim company Firestone Diamonds for £51m, African Diamonds, bought by Lucara Diamonds for £80m, and the copper explorer Kiwara when bought for $260m (£163m) by mining major First Quantum.