Molopo sells Spearfish Oil for $188M

Company News

Molopo Energy Ltd (ASX:MPO) will sell its Canadian Spearfish oil asset for $188 million to Legacy Oil and Gas Inc.

Molopo says it will receive $93 million in cash and just over 6 million Legacy common shares, representing around 4.9 per cent of the company’s capital.

Molopo says the Spearfish oil asset sale is an excellent result and shareholders will benefit through ownership of Legacy’s shares.

Canada’s Legacy Oil and Gas is listed on the Toronto Stock Exchange and has a market cap of around $2 million, producing around 13,000 barrels of oil equivalent per day.

Molopo’s chairman Geoff Phillips says once the transaction is complete the company expects total proceeds of around $313 million in a little over two years.

Subject to regulatory approvals, the sale is expected to be finalised by March this year.

In the year to 30 June 2010, Molopo Energy reported a net profit of $2.6 million.