HURRICANE Energy has agreed a deal to be taken over by Prax Group, a British oil refining, storage, distribution, and sales conglomerate, following an approach that values the West of Shetland pioneer at up to £250 million.

Shares in Hurricane surged in early trading after bosses recommended the acquisition, under which investors could receive up to 12.5p per share, depending on the delivery of supplementary dividends and deferred considerations.

This would be represent a premium of approximately 84% to the Hurricane closing price of 6.8p on November 1, 2022, the last business day before the company launched its formal sale process.

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Hurricane has a 100 per cent interest in the Lancaster field West of Shetland, which it discovered in 2009 and brought into production in 2019.

Phil Wolfe, chairman of Hurricane Energy, said: "I am pleased by the outcome of what has been a thorough and exhaustive formal sale process. The Hurricane board believes that the acquisition will deliver more cash than Hurricane shareholders are likely to have received from Hurricane's Lancaster oil field, on a much-expedited timeframe, as well as mitigating the risks associated with production from a single well development.

“In addition, the deferred consideration units offer the opportunity to share in future production out-performance or higher oil prices, as well as revenue from future acquisitions by Hurricane. Accordingly, the board of Hurricane is pleased to recommend the acquisition to shareholders."

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Sanjeev Kumar Soosaipillai, chairman and chief executive of Prax Group, said: "We see great strategic value in being a fully integrated energy company and have invested in experienced upstream and M&A management teams to drive this. The acquisition of Hurricane will provide a strong foundation for further upstream investments. We look forward to the Hurricane team joining the Prax family."

Shares in Hurricane were trading at 7.2p at 10.40am, up nearly 5% on the day.