SOCO International, the oil explorer in which Cairn Energy took a 10% stake on its flotation last year, has made an agreed #9m bid for Colorado-based Territorial Resources to strengthen its position in Mongolia.
The two companies already have close links. Soco's chief executive Ed Story has a 4.6% shareholding in Territorial and did not participate in any discussions on the proposed offer. Territorial has a 5% direct interest in Soco Tamtsag Mongolia, the holding company for Soco's interest in all of its Mongolian contract areas, and 600,000 Soco shares.
Territorial's shares are traded in the US on the Over the Counter Electronic Bulletin Board. The company has a 15% interest in Block XX, a strategic block in Mongolia's Tamtsag basin, and interests in Block XI in the Gobi Basin. Its small revenue interests in some producing fields in the US will be disposed of by Soco.
Territorial's latest proven and probable reserves are 2.4 million barrels of oil, and in the year to March 31, 1997, it made a pre-tax loss of around #125,000.
Soco raised #85.7m in a flotation last May to develop its Mongolian interests, which are so far producing 1000 barrels a day for export to China but which are being developed with an ambitious drilling programme. Soco's shares were placed at 260p, peaked at 405p, and were at 332.5p yesterday.
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