Egyptian walk: Prize Petro eyes Devon’s Egypt unit

NEW DELHI: Hindustan Petroleum Corporation Ltd’s (HPCL) joint venture company, Prize Petroleum, will be putting in a bid for the acquisition of the United States-based Devon Corporation’s Egyptian business.

The company is operating four oil-producing blocks in Egpyt.

Half of the production from these blocks is owned by the American company and the remaining by Egpytian General Petroleum Corporation.

The blocks are relatively small, with a total production of about 7,000-7,500 barrels a day (bpd), of which Devon’s share is about 4,800 bpd.

Devon Energy Corporation had on November 14 announced that it intends to divest its oil and gas assets and terminate its operations in Egypt mainly because it wanted to focus elsewhere.

The company had then said that although it has established a solid production base and hold a sizable suite of exploration opportunities in Egypt, it wanted to redeploy resources from Egypt to projects in and outside North America that better fit our focused growth strategy.

Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration, production and property acquisitions. It obtained its assets in Egypt primarily through the acquisition of Ocean Energy in 2003. The assets to be offered include interests in eight concessions, four in the Western Desert and four in the Gulf of Suez covering altogether an area of 3.7 million gross (1.8 million net) acres.

Prize Petroleum chief executive officer M N Prasad told DNA Money, “We have been approached by the managers of the sale.”

Devon has appointed Scotia Waterous as the manager for the sale.

Prize Petroleum has been planning to come out with an initial public offer to expand its equity base. The company plans to raise about Rs 450 crore in the pre-IPO placement, of which 50% would be put in by promoter HPCL.

IDFC Pvt Equity, Saban Capital and Bearings have shown interest in buying the pre-IPO equity but have differences among themselves relating to representation on the Prize board and non-competing clause with HPCL.