Beach Energy has flagged a large scale-up of exploration and development activities for unconventional gas in licences PEL 218 in South Australia and ATP 855 in Queensland, where Adelaide Energy holds interests of 10 per cent and 20 per cent respectively in the relevant Permian section of the Nappamerri Trough. Gross capital commitments over the next 18 to 24 months are expected to be of the order of $A200 million.
Managing Director of Beach Energy Reg Nelson said: “The offer is a logical next step for Beach, and it will remove the uncertainty of funding issues associated with Adelaide Energy for the Nappamerri Trough unconventional gas work program, as well as consolidating its strong landholding for this area in the Cooper Basin.”
Nelson said, “The capital demands on Adelaide Energy to fulfil its share of this program are very significant given its present cash position and there is a real risk of continued dilution for Adelaide Energy shareholders.
“Beach has been supportive of Adelaide Energy over the years and has provided a very large amount of its capital funding. However, we don’t intend for this to continue.”
The Beach on-market takeover offer of $A0.20 a share values Adelaide Energy at $A94 million.
Unless extended or withdrawn, the offer stands until the close of the ASX on 22 December
2011.
Beach holds a 19.95 per cent interest in Adelaide Energy.
