The United Oil & Gas PLC (LON: UOG) share price edged higher after the oil and gas company revealed that it had finally transferred 100% of its stake in UOG Italia Srl to PXOG Marshall Limited, a subsidiary of Prospex Energy PLC.
United Oil had announced on 7 April 2022 that it had been granted permission by the Ministry of Ecological Transition (“MITE”) in Italy authorising the transfer. The deal was first announced on 10 August 2021, when the company expressed its intention to sell its Italian subsidiary and exit the Italian market.
The deal has been unfolding in stages after Prospex satisfied the fundraising conditions on
23 February 2022, leaving the final condition of the Sale and Purchase Agreement being the ministry’s approval of the change of control from UOG to Prospex.
Investors cheered the move that has seen UOG shares rally higher over the past three days. United Oil & Gas sold its Italian subsidiary for a total of €2,164,701. The deal's completion means that UOG will no longer have a presence in Italy.
UOG Italia Srl held a 20% interest in the Podere Gallina licence area, including the Selva gas development project. The stake is now wholly owned by Prospex, which means that Prospex will now be liable for the approximately €800,000 capital expenditure on the Selva gas development.
Investors were relieved that the UOG had transferred the significant capital expenditures associated with the Selva gas development while still making a profit on the sale of UOG Italia to Prospex.
Brian Larkin, United Oil’s CEO, commented: “We are pleased to have completed the sale of the Italian asset with our joint venture partner on the licence, Prospex Energy. The proceeds of this transaction, along with other divestments strengthen our balance sheet to support our growth strategy. We have re-focused our portfolio on our core areas which provides us with a platform for organic growth and also a base from which we can evaluate further growth opportunities in 2022 and beyond. We wish Prospex Energy and all stakeholders of the Selva project well during its development.”
Investors are eagerly waiting to see what comes next for UOG after exciting the Italian market with a significant cash hoard from the sale of UOG Italia.
*This is not investment advice. Always do your due diligence before making investment decisions.
United Oil & Gas share price.
The United Oil & Gas share price surged 2.35% higher to trade at 2.61p, rising from Friday’s closing price of 2.55p.
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