Synergia Energy to Sell Cambay PSC Interest to Selan Exploration 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 favorable transaction for the company. The agreed consideration of US$14 million, which is approximately 6x Synergia's current market capitalization, suggests a very attractive valuation. The transaction is subject to regulatory approval, but the RNS indicates this is a standard process, and the joint venture is already preparing to drill its first new well. The sale proceeds will provide Synergia with resources to return capital to shareholders and support new strategic initiatives, which is positive for investors. Overall, the transaction appears to be a positive development for the company, though it does not meet the criteria for a 'Very Good' rating due to the lack of a profit upgrade or transformational acquisition.
Key Points
- Synergia Energy to sell its 50% working interest in the Cambay PSC to Selan Exploration
- Total consideration of US$14 million, representing approximately 6x Synergia's current market capitalization
- Transaction subject to Government of India approval, but joint venture already preparing to drill new well
- Synergia to return a portion of sale proceeds to shareholders and use remaining funds for new strategic initiatives
Summary
Synergia Energy Ltd has announced the proposed sale of its 50% working interest in the Cambay PSC to Selan Exploration Technology Limited for a total consideration of US$14 million. The agreed consideration represents approximately 6x Synergia's current market capitalization, suggesting a very favorable valuation for the company. The transaction is subject to regulatory approval from the Government of India, but the RNS indicates this is a standard process, and the joint venture is already preparing to drill its first new well. Synergia intends to return a proportion of the sale proceeds to shareholders and use the remaining funds to support the advancement of new strategic initiatives.