Albania focused Bankers Petroleum acquired for US$381 million by China's Geo-Jade

On 20 March 2016, Bankers Petroleum Ltd (Bankers) announced an agreement for the cash purchase of all shares in the company by affiliates of Geo-Jade Petroleum Corporation. Geo-Jade's US$1.68 per share offer values Bankers' equity at US$443 million, which equates to a net consideration of US$381 million, after adjusting for debt and working capital. The purchase includes the Patos-Marinza and Kuçova-Arreza heavy oil fields onshore Albania, with production of 18,137 barrels per day. We estimate that the fields hold around 180 million barrels of remaining oil reserves. A dispute is ongoing between Bankers Petroleum and the Government of Albania over the calculation of Bankers' tax obligation in 2011. This uncertainty of this dispute will clearly have had a bearing on the bid price, and its acceptance. An offer which provides a near 100% premium to Banker's undisturbed share price may represent an attractive exit price despite the discount to our underlying valuation.