Imperial Energy Confirms ONGC Is Offering 1,250 Pence

By Stephen Bierman and Kartik Goyal

Dec. 9 (Bloomberg) -- Imperial Energy Plc, the U.K.-based explorer operating in Siberia, confirmed that Oil & Natural Gas Corp. will go ahead with its bid priced at 1,250 pence a share in cash, the same amount it offered in August.

The transaction values the company’s ordinary shares at about 1.3 billion pounds ($1.9 billion), Imperial Energy said in a letter to shareholders today.

Oil has dropped 63 percent since the New Delhi-based explorer offered to buy Imperial Energy. If completed, the deal would be ONGC’s biggest acquisition, giving it access to Russian reserves and securing energy assets overseas to counter dwindling output at home.

ONGC Chairman R.S. Sharma has justified the proposed transaction, saying oil will rebound to $100 a barrel, more than twice the current level. Crude traded at $43.05 on the New York Mercantile Exchange at 1:34 p.m. London time, compared with $116.27 on Aug. 26, when ONGC agreed to buy Imperial.

The Indian company, the producer of almost 25 percent of the crude used by Asia’s third-largest energy consumer, plans to obtain the equivalent of 60 million metric tons of oil, or 1 1/2 times India’s output, from overseas by 2025.

Imperial Energy jumped as much as 20 percent to 1,024 pence today and traded 139 pence higher at 989 pence in London as of 1:58 p.m. local time. Today’s rebound followed a 17 percent decline yesterday on news ONGC had sought to postpone the deadline for filing its offer. ONGC was not trading in India because of a public holiday.

Russian Rules

The plan to buy Imperial cleared two sets of Russian regulatory conditions in November, approvals for which were needed by June 30, 2009, according to the Aug. 26 offer document. The approvals by the Federal Anti-Monopoly Service were for transactions involving companies controlled by a foreign state and takeovers under the competition law.

The Imperial agreement is the first to get the approvals after Russia passed laws earlier this year potentially limiting foreign access to its natural resources. ONGC Videsh Ltd. is the unit of ONGC bidding for Imperial Energy.

To contact the reporter on this story: Stephen Bierman in Moscow at Sbierman1@bloomberg.netKartik Goyal in New Delhi at kgoyal@bloomberg.net