U.K. firms British-Borneo, Hardy to merge

London-based independents British-Borneo Petroleum Syndicate plc and Hardy Oil & Gas plc have agreed to merge. The two companies intend to combine their assets under the name British-Borneo Oil & Gas plc, with interests in the merged firm being split 62.8% and 37.2% between British-Borneo and Hardy shareholders, respectively. The new company will have an estimated market capitalization of £910 million ($1.52 billion) and will be created through a share offer by British-Borneo to acquire

Sept. 21, 1998

2 min read

London-based independents British-Borneo Petroleum Syndicate plc and Hardy Oil & Gas plc have agreed to merge.

The two companies intend to combine their assets under the name British-Borneo Oil & Gas plc, with interests in the merged firm being split 62.8% and 37.2% between British-Borneo and Hardy shareholders, respectively.

The new company will have an estimated market capitalization of £910 million ($1.52 billion) and will be created through a share offer by British-Borneo to acquire all of Hardy's share capital.

Under the share offer, six new British-Borneo shares will be issued for every seven Hardy shares. British-Borneo currently holds a 2.3% interest in Hardy.

The companies said the merger will create a group with an excellent fit of geographic focus, assets, product streams, cash flows, technology, and management, as well as far greater diversity of growth opportunities.

The merged company will have combined reserves estimated at 240 million boe, with proven plus potential reserves estimated at 420 million boe.

The companies said the combined firm will have three core businesses in stable political environments: the U.K. continental shelf, the Gulf of Mexico, and Offshore Australia.

It will also have growth opportunities in emerging oil and gas provinces, notably Brazil, Pakistan, and West Africa. The merged company is believed to show a better balance between oil and gas reserves and an improved mix of exploration, development, and production compared with either of the founding firms alone.

Growth opportunities

The merged firm is also intended to capitalize on the innovative technologies being applied by British-Borneo and Hardy, particularly for deepwater developments.

British-Borneo holds a license for application of SeaStar tension leg platform technology, which it developed in conjunction with Atlantia Corp., Houston, for deployment in Morpeth and Allegheny fields in the Gulf of Mexico (OGJ, Jan. 20, 1997, p. 42).

More recently, British-Borneo bought into an innovative wave power company that is developing an offshore unit with potential applications in oil and gas fields.

Hardy, meanwhile, recently formed a joint venture with U.K. units of Halliburton Co., Dallas, for deployment of a new seabed oil and gas processing module (OGJ, June 29, 1998, p. 38).

The firms said their combined production should reach 100,000 boed by 2000. In first half 1998, British-Borneo's net output averaged 17,200 boed, while Hardy's averaged 10,050 boed.