Yemisi Izuora
Nigerian oil company Mart Resources has agreed to a $124.9 million takeover by Delta Oil Nigeria.
Mart, which is focused on production and development in the Niger Delta, says the deal was fair and in the best interests of shareholders.
The offer price of CAD$0.35 is lower than the price offered to shareholders under the previously terminated transaction with Midwestern Oil & Gas.
But Mart said it was reasonable due to oil price falls and their effect on industry investment and the company’s increased cash flow volatility.
The company also cited significant constraints on available working capital due to ongoing obligations to service its debt.
At closing of the deal, if it proceeds, Mart is expected to have about US$200.5million of outstanding bank debt.
The deal with Nigerian partner MidWestern was worth C$0.8 per share but fell through in August after oil prices tumbled and Midwestern could not get the finance to complete within the scheduled timetable.