UK-based Prax Exploration & Production has agreed to acquire British oil producer Hurricane Energy in a deal valued at £249m ($300.6m).

Under the terms of the deal, Hurricane shareholders would receive 4.15 pence for each share held in the company. This comprises a dividend of 3.32 pence per share in cash (£66.1m) and a cash consideration of 0.83 pence per share (£16.5m).

Furthermore, Hurricane shareholders will receive a supplementary dividend of up to 1.87 pence per share in cash (£37.2m), as well as a deferred consideration unit that could deliver up to 6.48 pence per share in cash (£129.1m).

According to Prax, the Hurricane shareholders are also entitled to receive a portion of ‘the supplementary dividend amount which is not declared as a dividend prior to the scheme effective date’.

Hurricane said its shareholders will receive 12.50 pence per share as part of the deal, assuming that the full value is delivered by the deferred consideration units.

In the event that the supplementary dividend is declared and paid in full, Hurricane shareholders would receive total dividends of 5.19 pence per share (£103.4m).

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Hurricane owns a 100% stake in Lancaster Oil and Gas Field located in the West of Shetland in the UK North Sea.

Prax expects the acquisition to help advance its commitment to developing a sizeable upstream business in the North Sea.

Hurricane directors intend to recommend its shareholders to vote in favour of the transaction.

Hurricane chairman Philip Wolfe said: “The Hurricane Board believes that the acquisition will deliver more cash than Hurricane Shareholders are likely to have received from Hurricane’s Lancaster oil field, on a much expedited timeframe, as well as mitigating the risks associated with production from a single well development.

“In addition, the Deferred Consideration Units offer the opportunity to share in future production out-performance or higher oil prices, as well as revenue from future acquisitions by Hurricane. Accordingly, the Board of Hurricane is pleased to recommend the Acquisition to shareholders.”

Prax Exploration & Production is a subsidiary of State Oil Limited, which is the holding company of Prax Group.

In November 2022, Hurricane Energy initiated a formal sale process after rejecting an unsolicited takeover offer of 7.70 pence per share from an undisclosed firm.