Carey Olsen has advised Gulf Keystone Petroleum on a proposed merger with ShaMaran Petroleum that would create an independent oil producer with a market capitalisation of more than $1 billion.

The law firm advised on the Bermuda law aspects of the transaction, which would combine four oil assets across the Kurdistan Region of Iraq and Federal Iraq.

The deal is to be implemented through a statutory merger under Bermuda law, with Gulf Keystone continuing as the surviving company. Existing shareholders of Gulf Keystone and ShaMaran would each own approximately 50 per cent of the combined business.

Under the proposed terms, ShaMaran shareholders would receive newly issued Gulf Keystone shares valued at approximately $601 million in aggregate.

Gulf Keystone also intends to pay a $50 million special dividend to its existing shareholders at closing, subject to applicable Bermuda law, the company’s bylaws and board approval.

The combined business would have estimated working-interest proved and probable reserves of 323 million barrels and pro forma working-interest production of 53,000 barrels of oil per day.

Both companies’ boards have unanimously approved the transaction. Completion is expected in mid-2027, subject to shareholder and regulatory approvals and other customary closing conditions.

The Carey Olsen team was led by Alexander Collis and Matthew Perriment, assisted by Bermuda associates Jordon Powell, Solene Roblot and Sarah Hagarty.

The firm worked alongside BAHR, which acted as coordinating lead legal adviser under Norwegian and Swedish law, and Herbert Smith Freehills Kramer LLP, which advised on English law.