Heritage Oil strikes £540m ($850m) deal to buy into Niger Delta

Heritage Oil strikes £540m ($850m) deal to buy into Niger Delta

Tony Buckingham, who owns 33% of oil company, likely to reap benefits of ‘game-changer’ takeover of Nigerian oil assets

Rupert Neate
Guardian UK

Tony Buckingham, the multimillionaire former mercenary turned oil tycoon, is likely to see his paper worth soar even higher after his Heritage Oil company announced a $850m (£540m) takeover of Nigerian oil assets.

Paul Atherton, Heritage’s finance director, said shareholders – the largest of whom is Buckingham – would be “hugely ecstatic” with the deal that will “transform” the FTSE 250 company into a major player in the oil industry.

Atherton said he expected the deal to be “phenomenally well-received” by shareholders, who recently revolted against Buckingham’s £1.36m pay package. “It is a game-changer for shareholders,” he added.

Buckingham, a major Tory donor and one of Jersey’s richest men with a fortune of around £500m, controls 33% of Heritage’s shares.

“The acquisition of OML 30 [the oilfield assets] is transformational for Heritage, providing a material change in production and reserves whilst pursuing our strategy of generating shareholder value,” Buckingham said.

“Heritage is very excited to be participating in the development of OML 30 and entering at an attractive valuation. We look forward to continuing to build local relationships and partnerships with the communities in the delta region and creating a platform to build a substantial presence in Nigeria.”

A former member of the Special Boat Service, Buckingham entered the oil business in 1972 as a North Sea diver and formed Heritage in the 90s. At around the same time, he joined Simon Mann, a one-time Scots Guard who subsequently gained notoriety for leading the Wonga Coup in Equatorial Guinea, at private military operator Executive Outcomes.

The deal will take Heritage, which already operates in Iraq and Libya, into the Niger Delta, where kidnappings of western oil workers and piracy are rampant. Despite the violence atmosphere, Atherton said he did not expect any “major or substantial problems” working in the delta. He said the deal would be the “first of many” in Nigeria, Africa’s leading oil producer.

Heritage will take control of the assets, known as OML30, via a reverse takeover, bridging loan and a $370m rights issue. The shares will be suspended on Monday pending an extraordinary shareholder meeting to approve the deal. It has formed a joint venture with local company Shoreline Energy to buy the 45% stake in the block owned by Shell, Total and Eni. The majority 55% stake is owned by the Nigerian National Petroleum Corporation.

http://www.guardian.co.uk/business/2012/jul/01/heritage-oil-540-deal-niger-delta

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Tony Buckingham, the British former soldier of fortune who heads Heritage Oil, the exploration firm, appeared to have sought assistance from a would-be Conservative MP to get a foothold in Libya, following the role of UK forces there in installing the new regime.

According to leaked correspondence, Buckingham – with another ex-special forces soldier, former SAS commander Major General John Holmes – is working with a would-be Tory MP, property developer Christian Sweeting.

Buckingham bought into local Libyan oil operators, paying $19m in 2011 for a share of a little-known Benghazi-based oil trader called Sahara Oil Services Holdings.

-Source: Guardian UK

Operations
The Company has an exploration appraisal and development asset in the Kurdistan Region of Iraq, exploration assets in Malta, Tanzania, Mali, Pakistan, Libya and the Democratic Republic of Congo and a producing property in Russia.