The Daily Journal — U.S. investment firm Lionheart Capital is close to finalizing a $400 million agreement to acquire a stake in the PetroUrdaneta oil field, according to a Bloomberg report.
Bloomberg reported that Miami-based Lionheart “signed a non-binding letter of intent with Swedish firm Keo Capital AB, which holds an interest in PetroUrdaneta.”
Transaction structure
The proposed transaction calls for the creation of a new joint entity between the two companies that would trade on the U.S. stock market. Bloomberg reported that “the parties are negotiating and aim to sign a definitive agreement before August 17,” according to a statement from Keo.
If the companies complete the transaction, Keo will receive payment in shares of the special purpose acquisition company (SPAC) Lionheart Holdings.
Bloomberg added that “Keo would receive $400 million in Lionheart Holdings (CUB) shares, a special purpose acquisition company listed on Nasdaq.” The companies must still complete due diligence and secure regulatory approvals in both Venezuela and the United States before closing the transaction.
After the announcement, Lionheart Holdings shares gained 0.4% during Monday’s trading session, closing at $10.83.
Oil field status and industry outlook
PetroUrdaneta operates as a joint venture with Petróleos de Venezuela S.A. (PDVSA) under a general license issued by the U.S. Department of the Treasury. Its assets include four mature light crude fields that Shell previously operated and that currently produce approximately 1,300 barrels per day.
Bloomberg noted that the project will require substantial capital investment to restore production at a time when Venezuela’s national oil output stands at around 1.2 million barrels per day.
Last June, Lionheart announced that it had secured financial commitments of up to $2.25 billion for energy projects in Venezuela.
With information from Bloomberg.
