The transaction will give United Energy access to oil and gas markets in the Middle East and North Africa. Credit: Amanda.

A subsidiary of Hong Kong-based oil and gas explorer United Energy Group has signed an agreement to acquire all of the shares of Kuwait Energy (Target) via a scheme of arrangement for up to $650.85m.

Kuwait Energy is an upstream oil and gas company engaged in exploration, appraisal, development and production activities in several countries, including Iraq, Egypt, Yemen and Oman.

The transaction will enable United Energy to expand its footprint into the resource-rich oil and gas markets in the Middle East and North Africa and is in line with the company’s strategy to become an independent international oil and gas player.

“The transaction will transform the company into a strong medium-sized international independent oil and gas company with a diversified portfolio of high-quality assets.”

Through the acquisition, United Energy intends to improve its profile and also further expand its development potential.

Under the terms of the deal, the company has agreed to acquire Kuwait Energy’s shares for $490.74m and purchase convertible shares for up to $160.11m.

In a statement, United Energy said: “The transaction will transform the company into a strong medium-sized international independent oil and gas company with a diversified portfolio of high-quality assets.

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“The production base and long reserve life of the target are highly complementary to the company’s existing portfolio and provides a sustainable development profile to the company for the next two decades.

“The company will also leverage its strong financial capabilities to enhance the development potential of the target portfolio.”

Kuwait Energy’s board has recommended the company’s shareholders to vote in favour of the scheme.

The completion of the transaction is subject to several closing conditions.