Under the deal, Melrose shareholders will receive 17.6 shares in Petroceltic for each Melrose share they hold, along with a special dividend of 4.7p per share.
Petroceltic’s chief executive Brian O’Cathain will be at the helm of the new company, which would have combined proven and probable reserves of 84 million barrels of oil equivalent. Melrose chief executive David Thomas will be chief operating officer.
Robert Adair, executive chairman at Melrose, will become non-executive chairman following the deal, which is expected to be completed in October.
He said: “The Melrose board believes that the merger will provide access to material resources in a leading gas development and an exposure to a more diverse exploration portfolio, enhancing the longer-term outlook for the business.”
O’Cathain added: “A combination with Melrose is a compelling opportunity to create a regionally focused company, balanced between production, development and exploration.”