Talon Petroleum Limited (ASX: TPD) agrees to acquire EnCounter Oil Limited in line with its target to scale-up its UK North Sea portfolio. The company today announced that it has entered into a binding head of agreement for the purchase of 100% of the shares in EnCounter Oil Limited. However, the transaction is subject to shareholders’ approval and final legal and financial due diligence on EnCounter.
The Acquisition is reportedly underpinned by the addition of 100% interest in two high-quality exploration opportunities that include Skymoos Prospect containing the 107mmbo best estimate prospective resource and Rocket Prospect containing the 27mmbo best estimate prospective resource.
Talon Managing Director, Matthew Worner stated “The transaction with EnCounter Oil is a significant step forward in Talon’s UK North Sea strategy. Talon is extremely pleased to be executing this deal with EnCounter Oil, with the company acquiring both the highly-prospective Skymoos and Rocket prospects.”
For the acquisition of EnCounter, Talon has agreed to provide the consideration of 100 million ordinary Talon shares subject to a 12-month voluntary escrow period. The consideration will also include the issue of performance shares with certain pre-determined conditions, told Talon.
The EnCounter acquisition is the second transaction executed by Talon, as the company looks to build on its newly incorporated UK North Sea strategy. Following EnCounter takeover, the company plans to enter into a farm-in agreement with Corallian Energy to earn a 10% interest in License P2396, which contains a 45mmboe Curlew-A discovery.
The company informed that highly experienced UK North Sea executives Graham Doré and Paul Young will also join the Talon team. As per the company’s information, Mr. Dore will join the board of Talon Petroleum as a Non-Executive Director upon completion of the acquisition, and at the same time the current Non-Executive Chairman, Peter Love will retire from the Board.
Talon’s next move involves the farm-out process to secure funding for drilling both Skymoos and Rocket. The company intends to drill an appraisal well at Curlew-A which is currently planned for 3Q 2019.
On the capital front, Talon is set to raise $1.25 million in a heavily-oversubscribed placement to sophisticated investors. It has agreed on the placement of 416,666,667 shares to investors at an issue price of $0.003 in order to provide funding for the progression of Talon’s portfolio of UK North Sea assets and plans for future growth.
EnCounter is a private, UK based company formed in 2012 by key former members of the executive management team of London-listed EnCore Oil plc. Technical Director, Graham Doré, and Geoscience Manager, Paul Young, were foundation members of EnCore and are accredited for the growth and development of the EnCore until its acquisition by Premier Oil.
Mr. Graham Doré holds over 30 years’ experience in the oil industry and gained an M.Sc. in Petroleum Geology in 1986. Mr. Doré played an instrumental role in the identification and development of the Buzzard and Golden Eagle prospects leading to the discovery of the giant Buzzard field.
Paul Young received a B.Sc (Honours) degree in Geology and Geophysics from the Memorial University of Newfoundland in 1983 and has spent the last 35 years in oil and gas exploration. Mr. Young is currently Director of EnCounter, Groliffe Ltd and GSL.
The shares of TPD traded flat on 31 January 2019. However, 3,877,789 shares changed hands on ASX in today’s trade. The stock last traded at A$0.003 with a market capitalization of A$3.78 million. Over the past 12 months, the stock price has fallen by 41.67% including a plunge of 12.50% witnessed in the last three months.
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