MetalNRG PLC (LON:MNRG) told investors it has been cleared to acquire Sunswept Enterprise Limited and its related assets.
The company said it has received confirmation from the Oil & Gas Authority that it does not oppose the change of control of Sunswept Enterprise to the BritNRG subsidiary.
Sunswept is expected to be net cashflow positive at Brent prices sub US$40 per barrel, which as the company highlights is significantly below the current price.
The acquired business portfolio includes three producing licences and three exploration permits in Lincolnshire. The producing assets are the Whisby field, the Reepham field and the Newton on Trent Field.
The company said that appraisal of the acquired business are nearing finalisation and BritNRG intends to present detailed plans for the development of the Whisby and Newton on Trent assets to the OGA in the shortest possible timeframes.
MetalNRG is acquiring the business via a convertible loan note transaction. The gross transaction cost is marked at £1.9mln though the net price – after settlement and repayment of a director loan to Sunswept and associated corporation tax consolidation – amounts to around £150,000 which the company describes as a “very low entry” to an onshore oil and gas producing and revenue-generating asset.
The company said it expects that the fair business value post-completion will be significantly higher than the net purchase price, to include a new working capital investment as well as substantial accretive and the de-risking activity carried out through an extensive due diligence process.
The company said it plans to provide more detail in the coming months, including an independent evaluation of the business.
“Now that we have operational control of the assets the real work can commence,” said MetalNRG chief executive Rolf Gerritsen in a statement.