Dominion Petroleum to be snapped up by Ophir Energy

The deal, which is predominantly share based but has a cash element, will "create the largest independent net deepwater acreage portfolio in the emerging and highly prospective hydrocarbon province of East Africa," Ophir wrote in an announcement to the London Stock Exchange on Thursday.

News of the deal sent Ophir's shares slumping over 11% before trading opened with Dominion's stock unsurprisingly heading in the opposite direction with an early gain of 35%.

Ophir is offering 0.0244 of its own new shares for each Dominion share which puts the value of Dominion shares at £0.059 ($0.093) and the deal at some £118.2 million. This is based on a closing price on Orphir's share of £2.42 a piece as at 12 October.

Ophir is also to spend $32.8 million in cash on snapping up outstanding Dominion convertible notes.

As well as getting its hands on acreage in Tanzania, where it is already highly active, Ophir is snapping up deep-water exploration assets off Kenya.

Nick Cooper, chief executive of Ophir, said: "East Africa is experiencing an upsurge in industry attention, partly as a result of Ophir's previous deepwater discoveries, with the involvement of many large oil and gas companies who are scheduled to drill high-impact exploration wells adjacent to the Ophir interests in the near-term.

"Ophir is strongly funded to deliver a sustained drilling programme across its East African portfolio and will seek to accelerate its exploration activities across the region to include the newly acquired blocks."

Dominion chairman Roger Cagle commented: "The exposure to Ophir's existing discoveries in Tanzania would de-risk the combined portfolio while maintaining significant upside exposure for both companies' shareholders."