Vintage Energy and Galilee Energy have signed a new agreement with key terms for a merger.
The proposed merger would see Vintage Energy acquire 100 per cent of Galilee Energy via an all-script deal.
The companies noted that the merger would create a group better resourced to generate value from gas and oil activities in eastern Australia.
Under the new agreement, the combined group would have an existing appraisal gas production, 2P reserves of 50 petajoules and long-term sales contracts, as well as the attractive Glenaras resource.
Galilee Energy executive chairman Ray Shorrocks said the merger is an important opportunity for the east coast’s gas market.
“This merger is aimed at enabling the combined companies and their shareholders to take full advantage of this looming gas shortfall and the impact that will have on gas prices, margins and free cashflow generation,” Shorrocks said.
“It will also provide long-term growth potential and access to funding.”
Vintage Energy chairman Reg Nelson said the combined group would have a stronger balance sheet to tackle the east coast gas supply.
“For Vintage shareholders, it means their company will be better equipped to grow production and revenue from the appraisal of the Odin and Vali gas fields,” Nelson said.
“In addition, our long-term prospects will be enhanced through addition of Galilee’s substantial gas resources.”
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