Australia’s ROC Oil is pushing ahead with its move into Papua New Guinea through a merger with Horizon Oil, one of the companies behind the Stanley gas project in Western Province.

ROC’s Mike Harding

ROC Oil and Horizon Oil announced merger plans in late April to create a new player with a market capitalisation of A$800 million (K2 billion).

The merger has unanimous support from both company’s boards, although investment house Allan Gray has called for an extraordinary general meeting to allow ROC Oil shareholders to vote on the proposed merger, which it described as ‘stupid’.

ROC Oil Chairman Harding said the transaction ‘is one of the best value accretive and complementary deals that I have seen” and that the Australian Securities Exchange (ASX) had advised Roc no shareholder vote would be required.

‘Rare opportunity’

But, he says, notices of an extraordinary general meeting will be sent out the coming days, although the board will recommend shareholders vote against Allan Gray’s plans to amend ROC’s constitution giving shareholders a vote on the deal.

‘I have worked in the domestic and international oil and gas sector for over 35 years and I can honestly say that this transaction with Horizon is one of the best value-accretive and complementary deals that I have seen.

‘An opportunity like this presents itself very rarely, and is transformational to Roc and Horizon.’

Project in preparation

Australia’s Horizon Oil has a 30% stake in the US $300m Stanley gas project, which the National Executive Council approved earlier this month.

Kelvin Bramley, Horizon’s Chief Company Representative in PNG, has told Business Advantage PNG that the Stanley project was now preparing for ‘construction to start in earnest’, with a target of mid-2016 for first production.

ROC Oil in brief

• Founded in 1997
• Operates upstream oil and gas activities, ‘from exploration and appraisal to development and production delivery’
• Has assets in China, Malaysia, Australia and the United Kingdom
• Listed on Australia’s ASX
• Annual turnover of US$251 million (K688 million) in 2013
• Produced 2.7 million barrels of oil equivalent (MMBOE) in 2013
• 200 employees