UK-based oil and gas company Ophir Energy has rejected a revised offer of £340m issued by Medco Energi Internasional on the basis that it undervalues the company.
Under the revised offer, the Indonesian oil and gas group, through its subsidiary Medco Energi Global, proposed to acquire Ophir Energy for £340m.
Medco Energi gave an offer of 48.5p per share to the UK-based firm, which has oil and gas assets across Asia and Africa.
Ophir Energy said that the “unilateral announcement without any further discussion” made by the Indonesian group was unanimously rejected by its board.
Medco Energi had earlier made two bids, the first in October 2018, when it offered to acquire the UK firm at 58.0p per share. Additionally, the Indonesian group indicated a willingness to look into offering Ophir Energy’s shareholders additional potential consideration through contingent value rights associated with the Fortuna LNG asset in Equatorial Guinea, based on further analysis and due diligence.
Last month, Medco Energi made a revised offer at 53.8 per share with the reduction caused by the pending confirmation related to the license extension of the Fortuna LNG asset and the decline in oil price since the original offer.
The latest revised bid from the Indonesian group follows last week’s refusal of the Equatorial Guinea Ministry of Mines and Hydrocarbons in extending the license of the offshore Block R that contains the Fortuna LNG asset.
Block R’s license expired on 31 December 2018 which resulted in Ophir Energy booking an impairment charge of about $300m.
Located about 140km west of Bioko Island, the Fortuna FLNG project was to see development of six commercial discoveries in various phases with an investment of $2bn.
In November 2016, Ophir Energy formed a joint operating company with OneLNG to develop the floating liquefied natural gas (FLNG) project at the Fortuna gas discovery.
OneLNG, in turn was a joint venture between Golar LNG Partners and Schlumberger. It ceased to exist since May 2018 following the exit of Schlumberger owing to financial delays caused to the Fortuna FLNG project, which was slated to begin production in the first quarter of 2020.