Shares digital

Explorer Roxi Petroleum (RXP:AIM), which listed in May last year, has returned to the market following a five month suspension having agreed in principle to acquire a majority interest in Kazakhstan’s Eragon Petroleum for $190 million. Eragon is the holding company for three exploration and production assets in Western Kazakhstan and the deal would effectively double the company’s asset base. Under Aim rules the agreement constitutes a reverse takeover – for which shareholder approval will be sought at an EGM on 29 February. Subject to approval at that meeting the firm is planning to issue new ordinary shares at 65p.

Roxi has a further option, which expires at the end of next month, to acquire a 50% interest in the ADA Group for $425 million. The stock initially rose as much 13% on readmission last Thursday but has since reversed those gains and dived lower to around the 25p mark. Chairman Clive Carver says he believes that reaction is being led by the length of the suspension, which he admits was ‘frustrating’, rather than being a reflection on the deal. He says: ‘The assets we have acquired broaden the scope of the business.’

Shares says: The stock has taken a pounding since readmission but is worth holding on to as the implications of the deal begin to be understood.

by: Tom Sieber