‘No guarantee sale will be completed’ as UK firm faces another delay in purchase of North Sea license
United Oil & Gas (UOG) has agreed to give more time to UK-headquartered oil and gas company Quattro Energy to secure funding for the purchase of a license in the UK Central North Sea that includes an existing hydrocarbon discovery.
The two parties entered into a binding asset purchase agreement (APA) on 17 January under which UOG is set to sell Licence P2519 containing the Maria discovery in Block 15/18 in the Outer Moray Firth Basin to Quattro Energy.
On 17 April, the companies reported they had agreed on a one-month extension to 17 May of the long stop date in the APA to provide Quattro Energy sufficient time to comply with conditions precedent related to the funding requirement under the agreement.
In agreeing to this extension, UOG said it had expected that the funding process was near completion. However, Quattro informed that this process has not been completed and that it had commenced a new financing process which is estimated to take a minimum of two months to complete.
Following engagement with Quattro and its appointed advisor in Canada, Research Capital Corporation, UOG has agreed to grant a further extension of the long stop date to 31 July to provide sufficient time for the UK company to meet the funding requirement, and has agreed that a further extension may be required for all conditions precedent to be met to allow completion of the sale, namely regulatory approvals to enable the transfer of funds to UOG and the license assignment to Quattro.
The company will continue to support and facilitate Quattro in its funding process, however, there can be no guarantee that this new process will succeed or that the sale will be completed,” UOG stated.
Following the review of its strategy and various options to deliver shareholder value, UOG announced it continues to believe that the sale to Quattro on the current agreed terms remains the best option for the company to realise value for its shareholders.
UOG holds a 100 per cent equity interest in License P2519, which has a carrying value of approximately £0.7 million as of 31 December 2022, based on the firm’s unaudited management accounts.