Global legal practice, Norton Rose Fulbright is advising Desire Petroleum plc (Desire) on its merger with Falkland Oil & Gas Limited (FOGL).

FOGL’s recommended all-share offer for Desire was announced on 3 October 2013. The offer represents a 45 per cent premium to the 12.25p closing price of Desire’s shares the day before the announcement. The merged company will have a market capitalisation of approximately US$250 million, based on FOGL’s share price immediately before announcement of the transaction.

Following closing of the offer, FOGL shareholders will own 60 per cent of the enlarged group's issued share capital, with Desire shareholders owning the remaining 40 per cent. The transaction will be implemented by way of a scheme of arrangement.

Announced simultaneously with the offer was the signing of an agreement between FOGL, Premier Oil Exploration and Production Limited and Rockhopper Exploration (Oil) Limited with respect to a farm-out of two of Desire’s licences, conditional on the scheme to implement the offer becoming effective and on grant of any approvals required from the Falkland Islands Government.

The merger creates the only Falkland Islands-focused exploration, appraisal and development company with exposure to all known major hydrocarbon plays in the Falklands Islands, operating across the North, East and South Falkland Basins. The merged company will be well funded, with an aggregate cash balance of approximately US$170 million.

Paul Whitelock, partner is leading the Norton Rose Fulbright team, he comments:

“We were delighted to advise Desire on this combination with FOGL, which is a significant transaction for the company and its shareholders, with increased visibility as to future drilling likely to drive exploration in the Falkland Islands region generally.”

The team is being led by Paul Whitelock and Raj Karia, assisted by Christopher McCarthy and David Anthony. Monique Fry is advising on incentives.