© Supplied by Viaro Energy Independent North Sea operator Viaro Energy has reached an agreement to acquire smaller rival Deltic Energy in a deal worth around £7 million.
The deal represents a cash offer for Deltic at 7.46 pence per share, a premium of around 36% compared to its closing price of 5.50 pence on Friday.
The deal values Deltic at approximately £6.9m, with the company’s shares jumping by around 9.1% after the takeover announcement on Monday.
In connection with the acquisition, Viaro will also provide Deltic with a bridging loan of up to £2.7m alongside an undertaking to pay Deltic’s costs if the deal does not go through.
In a statement, Deltic said its board of directors intend to “unanimously recommend” that its shareholders vote in favour of the takeover bid from Viaro.
The takeover comes after Viaro last year acquired a range of assets in the Southern North Sea from Shell and ExxonMobil.
It also comes after months of Deltic executives expressing frustration over the UK government’s oil and gas taxation and regulatory policies.
Viaro and Deltic
Viaro Energy chief executive Francesco Mazzagatti said Deltic’s oil and gas portfolio represents a “natural fit” with the company’s existing assets and strategic focus.
Deltic’s Selene discovery is a “key driver” for the acquisition, Mazzagatti said, as it formed an “important component” of Viaro’s deal with Shell and Exxon last year.
“The transaction reflects our commitment to advancing key developments responsibly and with the continuity they require,” Mazzagatti said.
© Supplied by Deltic Energy“By working with joint venture partners to overcome the economic challenges imposed by the current fiscal uncertainty, we aim to ensure that important developments like Selene can be successfully progressed towards production in a timely manner, and with the right level of technical and financial support.”
Deltic Energy chief executive Andrew Nunn said the company is looking forward to working with Viaro as it continues to move its Selene and Blackadder discoveries forward.
“Despite the difficult political and fiscal backdrop impacting the UK [exploration and production] industry over a number of years, the achievements of the Deltic team and the quality of our assets have been recognised by Viaro,” Nunn said.
“This transaction provides certainty for shareholders as well as our staff, regulators and joint venture partners who are progressing the Selene opportunity towards development for the benefit of the UK’s future energy needs.”
‘Right time to change direction’ for Deltic
Meanwhile, Deltic Energy chairman Mark Lappin said it was “the right time to change direction” for the company “given the capital required to progress our exploration successes to the next stage”.
“The acquisition by Viaro gives the Deltic business access to a different funding model, which is better suited to the current business environment and aiming to ensure discoveries are progressed and gas will be delivered to where it is needed,” Lappin said.
The Viaro and Deltic deal represents the latest in a series of North Sea combinations in recent months.
NEO Energy and Repsol Resources UK announced a “strategic merger” across their North Sea operations in March, shortly after supermajors Shell and Equinor announced a merger in December 2024.
Italian operator Eni and London-listed Ithaca Energy also completed a merger of their UK upstream assets last year, while Harbour Energy finalised its takeover of German rival Wintershall Dea.
Meanwhile, EnQuest abandoned a takeover of Serica Energy in May.
