Calgary-based West Africa and Northern Iraq explorer Addax Petroleum Corp. has confirmed its boardroom “yes” to Chinese oil company Sinopec’s bid for the company, but 66 percent of shareholders must still approve the deal.
The cash offer of C $52.80 values Addax at C$8.29 billion ($7.3 billion), about half of which is understood to be attributed to investments in fields and regulator cash from operations.
Addax, one of Africa and the Middle East’s largest producers, has some 1.9 billion barrels of oil equivalent in reserves and produces some 140,000 barrels per day. In Africa, the company’s deepwater holdings are astride Chevron at Abgami and are being drilled. In Iraq, the Taq Taq field is on course for full development.
The Chinese offer prices Addax 47 percent better than the price of the company’s Toronto shares on 5 June 2009, the day before Sinopec’s approach was revealed.
Sinopec Group is China's largest producer of oil products and looks certain to lock up the deal if shareholders agree. The deal includes a “termination fee” of C$300 million for Addax should “specified circumstances” not be met. Should Chinese officials not okay the deal by 24 August 2009, Sinopec will is understood to have pay the amount to Addax.
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Addax Petroleum Corporation,
Sinopec
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