SUNDANCE MERGES WITH BRISBANE ENERGY EXPLORER
Written on the 16 November 2012
ENERGY explorer Sundance Energy Australia (ASX:SEA) has agreed to merge with Brisbane-based Texon Petroleum (ASX:TXN).
An oil and gas producer that posted $20.8 million in revenue during 2011, TXN has operations across Texas including Eagle Ford shale (EFS) assets in the south of the North American state.
TXN shareholders will retain all non EFS assets in a new listed entity called Talon Petroleum. Existing SEA Board members will be retained but all TXN directors will resign to join the new Talon Board.
TXN CEO Cliff Foss (pictured) says the transaction will benefit shareholders from both companies.
“A transaction with Sundance provides asset diversity and the repaired capital to fully exploit Texon’s attractive low risk development EFS assets, which are expected to enhance shareholder value,” says Foss.
SEA managing director Eric McCrady describes the proposed merger as a “unique value-adding consolidation opportunity”.
“The combined company will have production, cash flow and reserve growth potential with highly attractive risk adjusted return potential,” says McCrady.
One SEA share will be issued for every two Texon shares as part of the transaction.
SEA shares were today flat at $0.75 per unit, while TXN shares were also unchanged at $0.38.