Corporate M&A

Global Oil & Gas Signs HoA for Option to Acquire 20% of Goshawk Energy

By Shriya Bhargava
August 13, 2020
2 minutes read
Pump-jack at Sunset

ASX-listed Global Oil & Gas Ltd. has entered into an exclusive Heads of Agreement (HoA) for an option to acquire a 20% equity interest in Perth-based junior oil & gas company Goshawk Energy Corporation Pty Ltd.

Under the terms of the HoA, Global has been granted the option with a 90-day exclusivity period in exchange for a non-refundable exclusivity fee of A$25,000. Upon exercising the option, Global will pay a cash consideration of A$975,000 (within a 30-day option period), plus an additional stock consideration of about 129 million new ordinary shares in the company (or a 19.7% stake in Global after the closing of a planned capital raising) to Goshawk. 

The HoA also includes a contingent payment of A$1.35 million payable by way of issuance of fully paid ordinary shares of Global upon the commencement of drilling a commercial hydrocarbon well on any of licenses currently held by Goshawk or its joint venture with Australian energy company Squadron Energy Pty Ltd. within three years of this transaction.

Global has also announced that it will raise capital for the issuance of approximately 243 million shares with one-for-three free attaching unlisted options (exercisable at A$0.02 each) for minimum gross proceeds of A$1.7 million, on the same terms as the consideration securities.

Privately-held Goshawk Energy is focused on E&P operations in the Canning basin in Western Australia, where it holds a 100% interest in two licences and a 20% operated interest in seven additional petroleum exploration licences through its joint venture with Squadron. The immediate focus of the joint venture is the Helvetica prospect, which has gross (best estimate) prospective resources of approximately 194 million barrels of oil (MMbbls). The current planned exploration program includes a 3D seismic survey to finalize the location for drilling the Helvetica subsalt oil prospect.

“Having exposure to both the Squadron Joint Venture as well as the Goshawk 100% licence area adjacent to Buru’s production acreage gives Global a significant exploration and development growth platform in the short to medium term with Squadron already embedded as a key strategic partner. The addition of the Goshawk technical team also allows the company to progress EP 127 in the Northern Territory with added potency,” said Patric Glovac, Director of Global Oil & Gas.

The transaction is subject to customary closing conditions, including the receipt of regulatory and third party approvals, due diligence, execution of a formal agreement, completion of the capital raising, and Goshawk and Global jointly developing a budget allocating the distribution of the completion funds.

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