Nostrum Oil & Gas says Tethys hasn't accepted its offer yet

Nostrum Oil & Gas said its proposed offer for Tethys Petroleum has not yet been accepted by the company’s board.

The independent oil and gas company said the two have engaged in extended discussions but so far have been unable to agree on the terms of the proposed transaction.

“Although discussions have been constructive, the board of Nostrum believes that the expectations of the board of Tethys, in particular as to the terms of the interim funding, are unrealistic given the current financial circumstances and situation of Tethys. As a result, Nostrum and Tethys have been unable to reach agreement as to the terms of the proposed transaction.”

Nostrum made a formal approach to Tethys on 13 July after Tethys failed to consummate the deal it had previously agreed with AGR Energy. On 10 August, Nostrum was granted exclusivity by Tethys until 25 August.

Nostrum announced on 28 August that it had approached the Tethys board regarding a possible offer in Nostrum shares at a price of C$0.147 per Tethys share.

The company said it remains willing to pay C$0.147 per Tethys share. It said that if Tethys’ board is able to reach agreement shortly as to the terms of a recommended offer, the parties will be able to work to a timetable that will provide for completion of an offer before the end of December 2015.

However, any further delay in reaching agreed terms is likely to result in further erosion of value and a delay in implementing any offer, as well as increasing the amount of interim funding that will be required by Tethys.