MOSMAN Oil and Gas has unveiled plans to acquire Australian company Trident Energy in a move which would not only expand its regional exploration footprint but complement its existing assets in New Zealand and Australia.
The AIM-listed company announced it had entered into a bid implementation agreement to acquire all of the issued shares in Trident which has onshore and offshore oil interests in Australia.
The total consideration comprises circa £1.6 million based on the share price of 23p and an exchange rate of £1:A$1.813, to be payable in three tranches. The agreement also provides a loan of up to A$750,000 to Trident which the company will use for the payment of outstanding third party creditors and in part payment of outstanding directors’ fees and loan funds provided by certain Trident directors
Perth-based Mosman, which owns the Petroleum Creek project near Greymouth, New Zealand, believes the deal represents a low entry price for a portfolio of permits in highly sought after locations, effectively increasing its portfolio from two to five permits with minimal dilution.
If the deal is successful, Mosman will gain Trident’s three exploration assets located in the Canning, Amadeus and Otway basins, providing the company with exposure to both conventional and unconventional oil and gas opportunities.
“The Trident acquisition complements Mosman’s existing Petroleum Creek and Officer basin projects, ensuring that Mosman has a diversified asset portfolio in five prospective hydrocarbon regions,” Mosman executive chairman John Barr said.
“Exploration of the five permits is fully funded and we believe the enlarged portfolio will deliver operational activity and exploration milestones in the coming months and years.
“Mosman’s strategy is to develop the business organically and by acquisition, which we are delivering both in only four months since IPO, having achieved the recent oil discovery at Cross Roads-1 and now our first acquisition.”
Under the terms of the agreement, Mosman will seek to purchase Trident via an off-market takeover, offering Trident shareholders one share in Mosman for every five fully paid ordinary shares in Trident that they hold.
Mosman said the takeover offer would be subject to various conditions including Mosman completing an equity capital raising of at least $2 million, a minimum acceptance from Trident shareholders representing at 90% of the Trident shares and the grant of exploration permit 145. However Mosman indicated it may waive the conditions.
Trident’s board has agreed to unanimously recommend the takeover offer in the absence of a superior proposal. At the end of the 2013 financial year, Trident had audited losses of $258,861 before tax and net liabilities of $855,426.
The takeover offer will close on 10 September.