OCTANEX has terminated its proposed merger with Peak Oil & Gas, after announcing it would not loan Peak any more money or extend the end date for the merger scheme after 2014.
The companies had announced a proposed scrip merger in November 2013 through a share swap, with one Octanex share given to Peak shareholders for every 24 Peak shares they held.
Peak, which holds interests in the Philippines and Indonesia, had been loaned about $1.9 million by Octanex since May, with Octanex saying at the time that the funds would help Peak meet an agreed budget until the end of the calendar year.
The loan was to enable Peak to complete its South Block A seismic program in North Sumatra and to fund the initial costs of preparation for an oil target well.
Peak said the 183 kilometre seismic survey was completed and well design and planning was underway for an oil well, to be named Amanah Timur 1, in its quarterly activities announcement.
Peak also announced it expected scheme documentation would be submitted to its members and optionholders in January following meetings in December, with final orders to be handed down in February.
Octanex’s refusal to extend the end date for the deal beyond 31 December or to issue any further loans to the company has seen Peak call a halt to the potential merger, saying the merger cannot be completed in the remaining time.
Octanex has said that it will amend the terms of the loan agreement in a way to mean that the loan will not be immediately repayable by 31 December, releasing Peak from the no-shop terms of its implementation agreement.
The company has also implemented a series of cost reduction measures aimed at reducing corporate overheads and expenditure, following a strategic review.
“Octanex remains supportive of Peak’s endeavours and will work with Peak for an orderly repayment of the Peak loan,” the company said in an announcement.
Octanex retains interests in two development assets, the Cornea field offshore Western Australia and the Ophir oilfield off Malaysia.