Meren Energy (MER) M&A Announcement summary

Deal rationale and strategic fit

• Consolidation of the remaining 50% stake in Prime gives full control, making Prime a subsidiary and doubling reserves and production base, with direct control over assets and cash flows.

• The enlarged entity gains exposure to high netback, world-class assets in Nigeria and funded growth projects in the Orange Basin.

• Strategic alignment with BTG Oil & Gas as a cornerstone investor brings sector expertise, a global investment network, and access to new growth opportunities and capital.

• The deal supports a differentiated, growth-oriented E&P company focused on sustainable shareholder returns and disciplined capital allocation.

• Enhanced platform for further M&A, organic growth, and industry consolidation, with a focus on high-quality assets.

Financial terms and conditions

• BTG Oil & Gas will receive newly issued shares, resulting in approximately 35% ownership of the enlarged company, with existing shareholders retaining 65%.

• Share issuance is based on a NAV-to-NAV calculation, not share price, ensuring fair value for both parties.

• The transaction is structured as a shareholding reorganization, not a cash acquisition.

• Africa Oil's working interest 2P reserves and production will double, with pro-forma reserves rising from 52.2 MMboe to 104.4 MMboe and production from 19,800 to 39,600 boepd based on 2023 figures.

• Board reconstituted with representation from both parties; BTG receives board appointment rights based on shareholding.

Synergies and expected cost savings

• Direct control of Prime's cash flows and balance sheet enables greater transparency and facilitates cost savings through streamlined business processes and decision making.

• Elimination of duplicated governance and overhead costs, with potential to optimize debt financing and reduce cost of capital due to increased scale.

• Some reduction in G&A expected, but main driver is strategic growth.