Elixir and Entek proceed ahead on Emerald’s acquisition

Entek Energy Limited (ASX: ETE) has announced about exercising its option to acquire Emerald Housing LLC, which is the wholly owned subsidiary of Elixir Petroleum Limited (ASX: EXR). The option agreement between two companies was inked on 29 November 2018 but before entering into the contract both companies studied the feasibility of the project and geographical challenges. Entek Energy paid a sum of $50000 to acquire the right to exercise its option any time till date January 31st, 2019.

Emerald housing has 100% working interest in land area of about 35,423 acres on the North Slope of Alaska and was the highest bidder for another land area of 114,310 acres in the North Slope’s National Petroleum Reserve of Alaska (NPRA) during lease sale announced in December 2018, which are immediately adjacent to its existing acquired land area on the North Slope of Alaska. 

After the exercise of the Option, every shareholder of Elixir will receive 1 Entek share for every 2 Elixir shares. The event is most likely to happen in late March 2019, after the approval of shareholders of both Elixir Petroleum Limited and Entek Energy Limited. It is believed that 200 million Entek Energy shares will be issued to Elixir Petroleum under an agreed arrangement between the two. As per calculation by Elixir Petroleum, 185 millon Entek Energy shares against consideration for payment was estimated over its new valuation.

Elixir Petroleum’s Managing Director, Mr. Dougal Ferguson told the media that the current arrangement will provide synergy to both the companies and thus add value to their shareholders. He further added that their Mongolian CBM PSC and the North Slope lease package are of high exploration values and exhibit good potential to be large scale mega projects.

Otherwise, Elixir Petroleum has projects as Moselle Permit in France, Project Peregrine in Alaska (USA) and Nomgon IX CBM PSC (Mongolia). Milestones covered by Elixir in 2018 included completing Alaska Lease acquisition and Golden Horde acquisition; and in 2019, it is working on additional Alaska lease, acquisition of Mongolian 2D Seismic acquisition and drilling of CBM exploration wells.

Entek Energy has its current projects located at green river basin, USA (rich with hydrocarbon deposits) where it has leasehold of 144,074 gross acres of land area. It focuses on upgrading its work at Niobrara Oil Resource Play.

On stock information, EXR last traded at A$0.036 (up 2.857% on February 1, 2019) with market capitalization of around A$13.47 million . The earning per share is -0.004 AUD and its 52 week high has been noted at A$0.099 and 52 week low at A$0.03. EXR, since inception has fallen by about 97% while there was a positive movement of 6% in last one month.

ETE last traded at A$0.014 (up 40% on February 1, 2019) with market capitalization of around A$3.05 million. The earning per share is -0.002 AUD and its 52 week high has been noted at A$0.031 and 52 week low at A$0.009.

All in all, the latest move stands to be a good one for ETE, however, both the stocks are under investors’ watchlist given the overall scenario.


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