TransAtlantic Sells Oilfield Services Arm
Bermuda-headquartered TransAtlantic Petroleum Ltd. announced Monday [Feb.27] it plans to sell its oilfield services business for $164 million.
The business, substantially comprised by wholly owned subsidiaries Viking International Ltd. and Viking Geophysical Services Ltd., is being purchased by a consortium consisting of Dalea Partners LP and funds advised by Abraaj Investment Management Ltd., an affiliate of Abraaj Capital, one of the largest private equity groups in the Middle East, North Africa and South Asia.
TransAtlantic — which operates out of Calgary, Alberta — said terms of the sale include $152.5 million in cash and an $11.5-million, interest-bearing promissory note from Dalea. The note would be payable five years from the date of issue or earlier “upon the occurrence of certain specified events.”
The company expects to use net proceeds from the sale to pay down outstanding indebtedness under its senior secured credit agreement with Standard Bank Plc and BNP Paribas (Suisse) SA, its short-term credit agreement with Dalea and a promissory note from Viking International to Viking Drilling, LLC, an affiliate of Dalea.
Under the terms of the letter of intent, TransAtlantic said it has entered into an exclusivity period during which it intends to negotiate definitive agreements with Dalea and Abraaj, although it can respond to a bona fide unsolicited written acquisition proposal that meets certain criteria.
Meanwhile, the company said it expects to enter into definitive agreements with Dalea and Abraaj by about March 15 and close the transaction in April.
“The divestiture of the Viking entities immediately strengthens TransAtlantic’s balance sheet, leaving us essentially debt free with a simplified administration and accounting process,” said chief financial officer Wil F. Saqueton.
TransAtlantic Petroleum Ltd. is engaged in the acquisition, development, exploration and production oil and natural gas. It holds interests in developed and undeveloped oil and gas properties in Turkey, Bulgaria and Romania.
