Genel Energy has confirmed rumours that the Kurdistan focused independent is in talks with Longford Energy to acquire a further 40% stake in the Chia Surkh oilfield in the Kurdish region of Iraq.
"We can confirm that we are in negotiations with Longford Energy," Genel said in a company statement released today. "However there can be no certainty these discussions will result in a transaction and we will update the market in due course when we have greater clarity."
In June 2009, Longford acquired a 50% interest in a subsidiary, jointly owned with the KRG. The Subsidiary held a 40% direct net working interest in the Block Production Sharing Contract. In addition, Longford had an option to acquire the remaining 50% interest in the subsidiary from the KRG, which it exercised in the third quarter of 2010, with the result that Longford currently holds a 40% direct net working interest in the block.
The Block contains a historical discovery as well as multiple exploration prospects. Independent estimates put contingent reserves at 121 million barrels of oil equivalent (“MMBOE”) and prospective reserves of 218 MMBOE for a total of 339 MMBOE.
Genel has $2.2 billion to spend on acquisitions and CEO Tony Hayward has signalled the company is poised for an aggressive takeover-driven expansion in the region, with post-merger DNO International a mooted target.
Merger gossip is hotting up in the region, with a report that Gulf Keystone has been approached by ExxonMobil for a bid worth 500% of the comapny's current capitalisation of GBP 1.5 billion subsequently squashed by the company yesterday.