Proposal to sell Pan Andean for £18m

IRISH EXPLORATION entrepreneur John Teeling is to net just under €1 million from the proposed sale of London-listed oil and gas producer Pan Andean to Petrominerales in a deal worth about £18 million.

Mr Teeling is a founder and chairman of Pan Andean, and directly owns 5.6 million shares in the company.

He is the group’s second-largest shareholder.

Under the terms of the proposed deal, Toronto-listed Petrominerales is offering 15 pence per share in cash to acquire Pan Andean’s assets in Peru and Colombia.

The offer has been recommended by Pan Andean’s board.

Pan Andean shareholders will also get stock in a new unlisted entity called Hydrocarbon Exploration on a one-for-one basis.

Hydrocarbon will essentially take ownership of Pan Andean’s assets in the United States and Bolivia. Petrominerales will have no interest in this entity.

Mr Teeling will receive 5.6 million shares in Hydrocarbon. These are expected to carry a value of about five pence each.

Another significant beneficiary of the proposed sale will be Newry-based investor Tom O’Gorman. He co-owns five million shares with his wife Philomena. These will be worth £750,000 under the terms of the cash offer.

Pan Andean was founded in 1989 and has raised about £20 million to date from investors. It is listed on the Aim market in London. It has more than 5,000 shareholders, of which 40 per cent are based in Ireland.

Speaking to The Irish Timesyesterday, Mr Teeling said: "We have drilled in many places and failed and now we're getting back our money and maybe a little more. The company got tired."