Canadian firm Stealth Ventures Ltd, involved in exploration and production of petroleum and natural gas assets, has entered into a binding agreement to acquire a private company in India that has interests in producing oil & gas assets, coupled with exploration acreages.
The deal will involve 100 per cent acquisition of the Indian company for $45 million, including $20 million in cash and $25 million in non-voting shares. The transaction will be completed after the required approvals from the Indian government are received.
The deal will give Stealth a working interest of 30 per cent in producing oil and gas assets besides 10 per cent in oil and gas exploration acreages. All development assets of the target company are currently under production and have a significant upside, both for enhancing production and for exploration upside. The target company is the operator in some of the development assets, which will pass on to Stealth as soon as the necessary regulatory formalities have been completed and the necessary approvals from the government have been received.
“The assets and the exploration acreages are under production sharing contracts (PSC) with the Government of India, and are located in a producing hydrocarbon basin in India. All capital commitments under the PSC for the producing blocks have been fulfilled,” a statement said.
The target also has two wells to be drilled on the exploration blocks by the end of 2012 where the firm will have to pay for its interest. This will amount to $400,000.
“This acquisition is a result of the sustained and concerted efforts over the past year, by the entire team at Stealth, which will now provide the company with a vehicle to launch its unconventional expertise in the South Asian sub-continent. This, in turn, will benefit the company’s shareholders and also the joint venture partners and the Indian government as a whole,” said Subra Subramaniam, CEO of Stealth.