BEACH Energy is set to merge with Drillsearch after shareholders in both companies accepted the terms of a merger.

Drillsearch shareholders approved the deal at a shareholder meeting held in late January, with 99.88 per cent of votes cast in favour of the deal.

In an announcement made following the vote, Drillsearch chairman Jim McKerlie said the combination of the two companies was highly attractive.

“The focus of both companies is to press ahead with implementation of the proposed merger and to successfully integrate the two businesses to drive value from the combination,” he said.

Beach acting chief executive Neil Gibbins said the shareholder support was evidence of the compelling nature of the transaction for all parties involved.

“As we have said before, by combining two complementary organisations we expect to create the leading Australian Securities Exchange listed mid‐cap oil and gas explorer and producer,” he said.

The proposed scheme of arrangement between the two companies must now go to a hearing of the Federal Court of Australia in Sydney, due for 18 February.

Should other conditions precedent to the scheme be satisfied, the issue of new shares to Drillsearch shareholders is expected to occur in early March 2016.

Under the deal, jointly announced in October 2015, Drillsearch shareholders are to receive 1.25 Beach shares for every Drillsearch share they hold, giving them 30 per cent of Beach’s total issued capital.

The deal valued Drillsearch at $384 million and each share at 83 cents each – shares in Drillsearch were trading at 65 cents before the deal was announced.

“As we have said before, by combining two complementary organisations we expect to create the leading Australian Securities Exchange listed mid‐cap oil and gas explorer and producer,” he said.

The proposed scheme of arrangement between the two companies must now go to a hearing of the Federal Court of Australia in Sydney, due for 18 February.

Should other conditions precedent to the scheme be satisfied, the issue of new shares to Drillsearch shareholders is expected to occur in early March 2016.

Under the deal, jointly announced in October 2015, Drillsearch shareholders are to receive 1.25 Beach shares for every Drillsearch share they hold, giving them 30 per cent of Beach’s total issued capital.

The deal valued Drillsearch at $384 million and each share at 83 cents each – shares in Drillsearch were trading at 65 cents before the deal was announced.

Both companies said synergies from the transaction would save them about $20 million every year, sourced from increased operational efficiencies and streamlined corporate and administrative functions.

Together, the companies will have a combined production total of 12.1 million barrels of oil equivalent.

Beach already operates two of the key shared assets fo the companies, those being the Western Flank Fairway joint venture and the Western Wet Gas joint venture – both currently producing.

Under the agreement, existing Beach directors Belinda Robinson and Robert Cole would resign from the company board following the successful conclusion of the merger.

Jim McKerlie and Phil Bainbridge of Drillsearch will take their places on the board.