Corporate M&A

Pilot Energy Makes All-Stock Offer to Acquire Royal Energy

By Isha Makkar
September 26, 2020
2 minutes read
Offshore Oil Rig

ASX-listed Pilot Energy Ltd. has entered into an agreement to acquire privately-held Royal Energy Pty Ltd. in an all-stock deal. Royal Energy’s key asset is a 21.25% indirect interest in production license WA-31-L containing the Cliff Head oil field located in the Perth Basin off the coast of Western Australia.

Under the terms of the agreement, Pilot Energy will acquire all of Royal Energy’s outstanding shares and in exchange, issue approximately 144 million Pilot Energy common shares, currently valued at A$0.04 per share based on the company’s closing share price 1-day prior to the transaction announcement. Upon completion, Tony Strasser, current CEO & Managing Director of Royal Energy, will be appointed as Managing Director of the merged entity.

New South Wales-based Royal Energy currently holds an 21.25% interest in the Cliff Head oil field through its 50% stake in Triangle Energy (Operations) Pty Ltd. The company also holds a 1.5% stake in ASX-listed E&P company Vintage Energy Ltd., that holds interests oil & gas assets across the Galilee, Otway, Bonaparte, and Cooper-Eromanga basins in Australia.

The Cliff Head oil field is located in the Perth Basin about 270 km north of Perth and 12 km off the coast of Dongara in Western Australia. It covers 72 km² in the WA-31-L production license, and 6 km² in the WA-286-P Commonwealth Exploration Permit. Work plans for the field include the commencement of a drilling campaign to develop the prospects from the existing Cliff Head Alpha platform. Current average daily production attributable to Royal Energy from the field stands at around 170 to 190 barrels of oil per day.

“The highly prospective WA-481-P exploration permit surrounding Cliff Head greatly improves the scope of the Cliff Head life extension project, whilst simultaneously enabling the company to capitalise on the energy transition with the exciting Mid West Wind and Solar Project,” Strasser said.

The transaction is subject to customary closing conditions, including the receipt of shareholder approvals, expected to be received at the extraordinary general meeting to be held in early November.

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