Drillsearch Energy Ltd (DLS) is pleased to announce that Circumpacific Energy Corporation (CER), the listed Canadian oil & gas subsidiary of DLS has entered into a definitive Plan of Arrangement Agreement to be acquired by Western Petroleum Commodities, Inc., a private Canadian oil & gas company. DLS holds 79.37% of the outstanding stock of CER and fully supports the Plan of Arrangement proposed between CER and WPC.
Under the Plan of Arrangement, CER shareholders will receive CDN $0.18 per share, a 100% premium over CER’s 12-month volume weighted average share price. The total consideration to be paid by WPC to CER shareholders is approximately CDN $9.6 million (A$ 10.2 million) of which DLS will receive approximately CDN $7.75 million (A$ 8.26 million) upon completion of the Plan of Arrangement.
As part of the Plan of Arrangement, DLS will also purchase from WPC any interest held by CER in the eight exploration tenements known as the SWQ Blocks which are held in joint venture by DLS and CER and operated by DLS. The acquisition of the interest in the SWQ Blocks will take place in parallel with the completion of the Plan of Arrangement.
Managing Director Brad Lingo stated “This is a great result for Drillsearch and all the other shareholders of Circumpacific. The sale of our interest in Circumpacific and the Canadian oil & gas properties allows Drillsearch to focus on its core activities in the Cooper Basin. The result is particularly good given the acquisition premium received by the CER shareholders.” Mr. Lingo further stated “The transaction also allows Drillsearch to focus on completing the Native Title clearance process for the SWQ Blocks and progressing an active exploration programme covering these lightly explored areas. Completion of the sale of our holdings in CER nearly completes the portfolio rationalisation process started a year ago divesting non-core assets and acquiring additional Cooper Basin interests that complement our four key businesses.”
Drillsearch Energy Limited (DLS) explores and develops conventional oil and gas projects. Drillsearch has a strategic spread of petroleum exploration and production acreage in Australia’s most prolific onshore oil and gas province, the Cooper/ Eromanga Basins in South Australia and Queensland. The company’s focus is on ‘brownfields’ exploration where geological risk is reduced and there is access to existing infrastructure, ensuring that any discoveries can be brought into production. The company also has offshore exploration interests in the Gippsland Basin.
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Tags: Asset Sale, DLS, Drill Search Energy, Oil and Gas
