Northcote Energy is buying the US oil and gas interests of ISDX-quoted North American Petroleum (NAP).
NAP has stakes in a number of the same licences as Northcote, which will be able to consolidate its position in those licences. For example, the stake in Shoats Creek will double from 35% to 70% and the Zink Ranch working interest will increased from 55% to 85%. Pro forma net production will be 174 barrels of oil equivalent per day and this could be increased with some investment in the wells.
Northcote is buying the US subsidiary of NAP in return for shares equivalent to 29.9% of the enlarged share capital. NAP intends to wind itself up and distribute the shares to its shareholders.
The deal is dependent on the repayment of the £1.05m Darwin Strategic loan note. Northcote needs to raise £1m from non-core asset sales and a debt and/or share issue.
The Northcote share price rose 0.01p to 0.22p.
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