High hopes: off Liberia
Global Iron in Liberia oil safari
Australia-listed Global Iron said it would buy Cayman Islands-based African Petroleum, which has oil and gas interests off Liberia, in an all-stock deal valued at A$500 million (US$434 million).
The reverse takeover will see Global gain access to two blocks off the coast of Liberia, covering a total of about 7200 square kilometres.
Global said in a statement today that studies showed the blocks held potential prospective reserves of between 945 million and 3043 million barrels of oil in lower Cretaceous sediments.
Norwegian seismic player TGS is to shoot 5000 square kilometres of 3D seismic on the blocks as part of a multi-client sweep off the West African state. African had also hired a team of geological experts to build a geological model for the assets, Global said.
It said previous drilling on the blocks in the early 1970s and mid-1980’s had recovered oil shows in six out of seven wells drilled.
Under the deal, Global will take a stake of between 95% and 100% in African by issuing more than 900 million of its shares to African shareholders. As part of the deal Global is required to raise between A$130 million and A$230 million by way of a separate share placement.
Both the acquisition and the required share placement are subject to approval by Global’s shareholders.
Global will rename itself African Petroleum at the completion of what it said was a “company transforming” deal.
Perth-based Global holds stakes in iron tenements in Western Australia. The company did not say whether it intended to retain these assets following the transaction.