Maurel & Prom signs key deal in acquisition of Wentworth

Maurel & Prom updated the market on its recommended cash acquisition of Wentworth Resources on Thursday, signing an agreement fortifying its long-term partnership with the Tanzania Petroleum Development Corporation (TPDC).

The company said the agreement, structured as a call option for TPDC, allowed TPDC to increase its ownership by up to 20% in the production interest - a significant development in the acquisition process.

Under the deal, M&P said it had obtained the necessary pre-emption waiver from TPDC and secured Tanzanian government approval for the acquisition.

The only remaining requirement was the final consent from Tanzania's Fair Competition Commission (FCC), which was expected to be granted before the Jersey Court sanction hearing.

M&P's acquisition was proceeding through a scheme of arrangement under the Jersey Companies Law, and with the requisite approvals in place, Wentworth had scheduled a court sanction hearing on 19 December.

Following the hearing, M&P would officially assume ownership of Wentworth and acquire its 31.94% direct and indirect interest in Mnazi Bay.

After the acquisition's closing, Maurel & Prom expected TPDC to exercise the call option, enabling TPDC to purchase a 20% production interest in Mnazi Bay.

The arrangement would result in M&P holding 60% ownership of Mnazi Bay, while TPDC would hold the remaining 40%.

Additionally, the joint operating agreement would undergo amendments to incorporate the new partnership conditions, allowing TPDC to appoint secondees to participate in the operations of the Mnazi Bay field.

Funding for the acquisition would be supported by the £63m placed in escrow, M&P said.

On executing the call option, TPDC would contribute its portion of the acquisition consideration, with Wentworth's cash balance and corporate winding-down costs being shared between M&P and TPDC.

"We are pleased to agree this partnership with TPDC that will reinforce the basis for the mutual benefit of the next phase of development at Mnazi Bay," said chief executive officer Olivier de Langavant.

"M&P and TPDC have had a long and successful history, and I look forward to this new phase that will bring about the continued growth and development of Tanzania's natural gas sector.

"We would further like to take this opportunity to thank our partners at TPDC and other Tanzanian government stakeholders for working collaboratively to achieve a successful outcome of the acquisition."

At 1244 GMT, shares in Wentworth Resources were up 3.33% at 31p in London, while those in Etablissements Maurel & Prom were ahead 0.26% in Paris at €5.88.

Reporting by Josh White for Sharecast.com.