Heritage Oil and Turkey’s Genel agree a $6bn merger and set sights on FTSE 100
HERITAGE OIL yesterday agreed to merge with Genel Enerji, a unit of Turkey’s Cukurova Group , to create a FTSE-100 oil producer focused on Iraqi Kurdistan worth around $5.5bn (£3.3bn)
Heritage’s controversial founder and chief executive, ex-mercenary Tony Buckingham, is betting that years of wrangling between Baghdad and Kurdish leaders over oil revenue sharing is nearly over, which will allow Genel’s producing fields to fund production at Heritage’s undeveloped sites.
Heritage said the deal, which is currently non-binding, would be structured as a takeover of Genel by Heritage.
Heritage will pay with shares and Cukurova, controlled by one of Turkey’s richest men, Mehmet Emin Karamehmet, will end up with around 50 per cent of the enlarged group.
Shares in Heritage, which were suspended last week after the company said it was in merger talks, have tripled in value since the beginning of the year based on a big oil find in Kurdistan and positive drilling results at its Ugandan fields.
Genel is worth around $3.3bn to $3.6bn, Heritage chief financial officer Paul Atherton said, adding he expects the enlarged group to be included in the FTSE 100. “This acquisition can transform Heritage into being a regional player,” he added.