Australian oil and gas producer Beach Energy has announced that it will acquire Drillsearch Energy in a deal worth A$384 million.
The consolidation of the two oil and gas operators in South Australia’s Cooper Basin will result in the creation of a $1.17 billion listed South Australia entity.
The new company will be Australia’s biggest onshore oil producer and a sizeable natural-gas supplier.
According to the companies’ joint statement, under the terms of the agreement, Drillsearch shareholders will receive 1.25 Beach shares for each share held, valued at 83 Australian cents.
“The combination of Drillsearch and Beach is a highly attractive and unique opportunity for Drillsearch shareholders to participate in the creation of the leading mid-cap oil and gas company on the ASX. Under the all-scrip consideration, Drillsearch shareholders will receive a premium for their shares while also gaining exposure to a company of enhanced scale and balance sheet strength that is well positioned to take advantage of growth opportunities,” said Jim McKerlie, Chairman of Drillsearch Energy.
“This is a common sense combination of two Cooper Basin businesses sharing significant core assets. The proposed merger will provide both Beach and Drillsearch shareholders exposure to a more efficient, cost effective and diverse Cooper Basin business with larger production and reserves, delivering real benefits to all shareholders,” added Glenn Davis, Chairman of Beach Energy.
The transaction is subject to the approval of Drillsearch shareholders at a shareholder meeting scheduled to take place at the end of January 2016.
Just last week, Cooper Basin’s largest operator Santos rejected a $7.1 billion takeover offer from the Bermuda-based Scepter Partners.
