Sea Dragon strikes share deal to buy oil and gas company in Egypt

Sea Dragon Energy Inc. (TSXV:SDX), a Calgary-based international oil and gas company with a focus on the Middle East, has struck a deal to acquire National Petroleum Co. Egypt Ltd. for US$147.5 million.

The cash and share deal, announced late Sunday, involves $60 million in cash and the payment of 350 million shares at a deemed price of 25 cents each — worth $87.5 million — to National Petroleum's owner Golden Crescent Investments Ltd.

The properties being acquired include 100 per cent of three oil and gas concessions in Egypt — the NEM, SAZ and SHM energy prospects.

In addition, the company will acquire a 12.75 per cent stake in the South Ramadan concession and will hold rights to a 100 per cent interest in a fifth concession pending government approval.

"This is a transformational transaction for the future of Sea Dragon and indicates the company's commitment to grow in Egypt and elsewhere in the region," said Said Arrata, chairman and CEO of Sea Dragon.

"The transaction, which will result in the acquisition of a 100 per cent operated participating interest in three concessions and a 12.75 per cent non-operated working interest in a fourth concession brings with it additional proved plus probable reserves, additional production and considerable upside in terms of the low risk, near term development of the Muzhil field.

"These assets are complementary to Sea Dragon's existing Egyptian assets and will enable Sea Dragon to continue its goal to be a leading independent oil production company in Egypt."

When the deal closes, Golden Crescent would own 20 per cent of Sea Dragon.

Sea Dragon said the transaction will give the company about 9.4 million barrels of light and medium crude oil reserves, more than doubling its current base.

The deal will also add about 650 barrels of daily production, raising its output by 65 per cent, and provide other development opportunities.