Synergia Energy to Sell Cambay Asset for £14 Million
Why we think this is good
The proposed sale of Synergia Energy's 50% working interest in the Cambay PSC to Selan Exploration represents a compelling valuation, with the agreed consideration of US$14 million equating to around 4x the company's current market capitalization. This transaction, if completed, will provide Synergia with significant cash proceeds that can be used to return capital to shareholders and support new strategic initiatives. The sale process appears well-structured, with a clear timeline and regulatory approval requirements. While there are some timeline risks associated with the Government of India approval, the company seems confident in securing this. Overall, the sale terms are favorable, and the transaction should have a positive impact on Synergia's financial position.
Key Points
- Synergia Energy to sell 50% working interest in Cambay PSC to Selan Exploration for US$14 million
- Agreed consideration represents around 4x the company's current market capitalization
- Transaction subject to Government of India approval, expected within 180 days
- Synergia to return a proportion of proceeds to shareholders and pursue new strategic initiatives
Summary
Synergia Energy has announced the proposed sale of its 50% working interest in the Cambay PSC to Selan Exploration for a total consideration of US$14 million. The agreed consideration represents approximately 4x the Company's current market capitalization, which the Board believes is a compelling valuation. The transaction is subject to Government of India approval, and Synergia expects to finalize the Sale and Purchase Agreement and request approval within 180 days. Upon completion, the company intends to return a proportion of the proceeds to shareholders and advance new strategic initiatives.