Prax to buy Hurricane Energy in £249m deal

Hurricane Energy said on Thursday that it has agreed to be bought by Prax Exploration & Production in a deal worth up to £249m.

Under the terms of the transaction, Hurricane shareholders will receive 4.15p a share. This comprises a dividend of 3.32p a share in cash and a cash consideration of 0.83p per share.

There is also a supplementary dividend of up to 1.87p a share in cash and a deferred consideration unit, which may deliver up to 6.48p per share in cash.

For the directors to be able to declare the supplementary dividend in full, Hurricane will need to have sufficient cash resources, in particular it will need to have received the proceeds, as planned, from the oil lifting from the Lancaster Field scheduled for late April 2023.

Hurricane chairman Philip Wolfe said: "I am pleased by the outcome of what has been a thorough and exhaustive formal sale process. The Hurricane board believes that the acquisition will deliver more cash than Hurricane shareholders are likely to have received from Hurricane's Lancaster oil field, on a much expedited timeframe, as well as mitigating the risks associated with production from a single well development.

"In addition, the deferred consideration units offer the opportunity to share in future production out-performance or higher oil prices, as well as revenue from future acquisitions by Hurricane. Accordingly, the board of Hurricane is pleased to recommend the acquisition to shareholders."

At 1535 GMT, the shares were up 2.5% at 7.04p, having reached as high as 9.00p earlier.