EXOMA Energy has made its first official play into the technology sector as part of its move away from oil and gas, having cut its losses with its Galilee basin exploration activities in October.
Exoma withdrew from the Galilee basin joint venture with China National Offshore Oil Corporation (CNOOC) after an exploration program carried out between 2011 and 2013 failed to identify a commercial hydrocarbon resource.
The company – which was investigating coal seam gas, shale oil and gas, and conventional oil at Galilee – is now undertaking no activity in the sector and in December announced the purchase of The Gruden Group, which specialises in electronic and mobile commerce.
Exoma will change its name and will no longer be defined as an energy company on the ASX after the deal is completed.
The company’s website makes no reference to any other oil and gas activities, with the only reference to ongoing business being that it is “continuing its review of new investment opportunities”.
Exoma said the exploration permits ATP 991P, ATP 996P, ATP 999P and ATP 1005P, now held in full by CNOOC, were given up after the company deemed further exploration “inappropriately risky for a small exploration company”.
The company said technical results did not support any further investment in Galilee and it would continue as operator only until March 2015.
Its purchase of The Gruden Group – including tech players Rich Sea, Mobile Den and Blackglass – represents a change of focus towards technology in the Asian market.
Significantly, TGG will benefit from the deal by gaining access to Exoma’s ASX listing, which the company said would “fund growth and strategic acquisitions”.
Exoma said the deal opened the company up to new domestic and international clients and gave it entry into the fast-growing mobile commerce market in China and other Asian markets.
The deal will be paid for by the issue of Exoma shares and $200,000 cash, with Exoma saying the new entity would drive revenue through organic growth, future acquisitions and the monetisation of intellectual property.
Some of TGG’s most significant clients include the Australian Federal government, Woolworths and Starbucks, and the combined group will have initial access to $7 million cash to fund growth and provide working capital.
Blackglass managing director and founder Warren Barry will be the interim chief executive of the new entity, with mobileden.com.au developer Todd Trevillion and Gruden’s Brent Trimnell-Ritchard to make up the balance of the senior leadership team.
Mr Barry said mobile commerce was accelerating faster than other IT opportunities and Morgan Stanley had predicted mobile internet would be more prevalent than the desktop equivalent by 2015.
“Mobile internet growth is particularly strong in emerging regions where mobile phone technology is greater than fixed line telecommunications infrastructure, particularly in Asia and Africa,” Mr Barry said.
“The Gruden Group is well placed to take advantage of that growth.”
The new board will include non-executive chairman Gary Castledine, non-executive director Stephen Harrison, and Mr Barry and Mr Trevillion as executive directors.
The companies have entered into a 90-day negotiation period, during which time they will work to agree the documentation necessary to complete the sale.