Prax E&P’s bid for Hurricane Energy has been cleared by government officials, with the company now awaiting a final written approval from the regulator as to the status of its offshore licences.
Prax announced its intention to acquire all shares in west of Shetland producer Hurricane (LON:HUR) in March, as part of a deal that valued the company at approximately £250 million.
It later confirmed the acquisition would be carried out by means of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
On 4 May, Hurricane confirmed the plans had been approved by a majority of its shareholders at a court meeting, though two further conditions were to be met including confirmation of the firm’s licences from the North Sea Transition Authority (NSTA) and government approval under the National Security and Investment Act 2021.
The NSI Act gives the government powers to scrutinise and intervene in business transactions, such as takeovers, to protect national security.
Though headquartered in London, Prax is part of State Oil – a group of midstream and downstream focused companies with units in Singapore and Houston – thus prompting further scrutiny.
The firm, which also acquired the Lindsey oil refinery at Immingham in early 2021, says it is now looking to create “a sizeable upstream business” in the North Sea alongside its downstream operations.
Prax said today it had received confirmation from the Cabinet Office that the Chancellor of the Duchy of Lancaster has determined that no further action will be taken under the NSIA, clearing the way for the deal to progress.
Prax now says it expects to receive written confirmation from the NSTA “imminently” that the regulator does not intend to revoke any of Hurricane’s licences or require a further change of control of the company following the takeover.
A court sanction hearing on the matter has been scheduled for 7 June 2023.
Prax says certain other conditions must also be met, but that pending the outcome of the hearing the scheme is expected to become effective on 8 June 2023.
Provided the hearing is successful, the takeover would complete on 8 June 2023, with the cancellation Hurricane Shares on the AIM index as of 7:00 a.m. on 9 June.