West Perth-based petroleum explorer ARC Energy Ltd will acquire Toronto Stock Exchange-listed Golden Dynasty Resources Ltd subsidiary Terratek Drilling Tools Pty Ltd for $2.8 million and a 2 per cent royalty on the company's oil holdings.
West Perth-based petroleum explorer ARC Energy Ltd will acquire Toronto Stock Exchange-listed Golden Dynasty Resources Ltd subsidiary Terratek Drilling Tools Pty Ltd for $2.8 million and a 2 per cent royalty on the company's oil holdings.
ARC has also granted to Golden Dynasty, options in relation to participation in specific exploration wells in the area including the Back Reef Play Joint Venture area for a 10% interest, and in certain other wells which are currently under negotiation with prospective farminees.
The full text of an Arc announcement is pasted below
ARC Energy Ltd today announced it had secured significant additional holdings in the onshore Canning Basin in Australia's northwest in accordance with its program of consolidation of its holdings in the area.
The acquisition of the producing Blina and associated oilfields and surrounding exploration acreage complements the Company's existing holdings in the area and provides it with an operation base, a foundation oil production operation and additional exploration exposure.
The acquisition is from Golden Dynasty Resources Ltd., a TSX Venture Exchange ("TSXV") listed company, and includes:
i. 100% of the EP 129, L6, L8, PL 7 permits and licences;
ii. 100% of the Application for Exploration Permit 7/05-6; and
iii. associated plant and equipment and infrastructure.
The interests are subject to a number of royalty and option agreements.
The acquisition is for a consideration of A$2.8 million and a 2% royalty. The acquisition is subject to a number of conditions, including the completion of due diligence by ARC and the receipt by Golden Dynasty of acceptance by the TSXV of the transaction and any required approvals of the shareholders of Golden Dynasty.
Further details of the agreements and the assets are set out in the attachments.
Commenting on the acquisitions, ARC Managing Director, Eric Streitberg, said:
"ARC's Canning Basin portfolio is very considerably enhanced by this acquisition. It is strongly complementary to our current holdings, it will provide us with reserves and production and valuable operating experience. The production operation is currently very well run and will give us excellent experience for when we bring on stream discoveries made in the forthcoming drilling program. Although reserves and production are currently modest with current production around 50 barrels per day, we will be looking closely at the wells to see if we can enhance production in the short term. We have plenty of experience with these sorts of fields in the Perth Basin and look forward to enhancing the production using our Perth Basin operating team.
We will plug the exploration areas into our current regional review and will almost certainly be drilling wells in the area in the coming dry season program.
We look forward to getting the deal completed and getting to work on the areas."
The purchase agreement is subject to various approvals and completion of documentation. However, there is no reason to believe that these agreements will not be completed and approvals obtained. The terms set out below are not complete but are those terms that are considered material to the transaction.
1) Purchase agreement
ARC has entered into an Agreement with Golden Dynasty for the purchase of the shares in Terratek Drilling Tools Pty Limited (Terratek). Terratek is the owner of certain assets and interests including, but not limited to, EP 129, L6, L8, PL 7 and the interests known as the Blina Back Reef Play Joint Venture Area contained within L6 and EP 129. The various permits are subject to a royalty of 2% payable by Terratek to European Gas Ltd.
ARC will also purchase a 100% participating interest in the 7/05-6 Application for Exploration Permit.
ARC has also granted to Golden Dynasty, options in relation to participation in specific exploration wells in the area including the Back Reef Play Joint Venture area for a 10% interest, and in certain other wells which are currently under negotiation with prospective farminees.
The consideration for the purchase is:
i. A$2,800,000, and
ii. a net well head royalty of 2% calculated on the same basis as the Terratek royalty.
The purchase is conditional on:
a) the consents of any party or under any joint operating agreement or other documents relating to any of the Terratek assets, and
b) the completion of technical, legal, tax and commercial due diligence by ARC
c) any necessary statutory or regulatory approvals or registrations required for the transfer of the Shares or the assignment of the 7/05-6 Interest.
d) receipt by Golden Dynasty of all necessary regulatory acceptances and approvals, including those of the TSX Venture Exchange and any required approvals of the shareholders of Golden Dynasty.
