In a significant development, diversified player BPH Energy Ltd (ASX:BPH) has reached a settlement with MEC Resources Limited (ASX:MMR), as a result of which the Company’s direct shareholding in its investee Advent Energy Ltd would increase from 22.6 per cent to 22.7 per cent.
BPH Energy is the second largest shareholder of the oil and gas exploration and development entity, Advent, which possesses offshore (PEP 11) and onshore (EP 386 and RL 1) exploration and near-term development assets around Australia.
Key Details of Settlement
BPH Energy’s settlement with MEC Resources Limited is with regard to the oppression proceedings the Company started in the Supreme Court of Western Australia in May 2019, with Trandcorp Pty Ltd, Grandbridge Limited, and Mr David Breeze, who is the common Managing Director of the Company and Grandbridge.
Besides the settlement of the oppression proceedings, last year, BPH Energy and Grandbridge entered into a deed of settlement and release with Advent and other relevant parties, excepting certain actions involving Advent, which have now been discontinued. Moreover, the Company and Grandbridge have now settled the residual legal matters with Advent.
In line with the shareholder approval received by Advent shareholders in November 2019, the Company and Grandbridge now plan to convert a receivable of $162,566 and $505,325 into 3,251,320 shares and 10,106,500 shares in Advent, respectively at a conversion price of $0.05 per share.
Upon the completion of the conversion, Advent’s number of shares on issue would increase from 177,595,234 to 190,953,234, representing a 7.52 per cent dilution effect to existing shareholders of Advent, including MEC.
BPH’s Investee Advent Prospers in Resources Sector
BPH Energy’s investee, Advent has experienced considerable progress over the years via its highly prospective permits.
Advent owns stakes in the following projects:
- 85 per cent JV interest in the PEP11 project in the offshore Sydney Basin via its 100 per cent owned subsidiary - Asset Energy Pty Ltd, and
- 100 per cent stake in EP386 in Western Australia and RL1 in the Northern Territory in Bonaparte Basin via its wholly owned subsidiary- Onshore Energy.
The Company’s current objective is drill test the Baleen target in the PEP11 permit in 2020. Progressing well in line with its goal, the Company has recently made an application to NOPTA (National Offshore Petroleum Titles Administrator) to permit the drilling of well at Baleen.
PEP 11 is a significant offshore exploration area, comprising substantial structural targets that are considered to hold multi TCF natural gas resources. The major gas supply issues developing in eastern Australia and rising domestic wholesale gas prices offer a significant market opportunity to advance the PEP 11 project.
In a nutshell, BPH Energy is making tremendous progress in the resources sector, backed by its unparalleled business strategy and key investment, Advent. The Company seems to be ideally placed and well-financed to progress with its growth-driven objectives, supported by a robust management team.
BPH is currently trading at $0.001 on the ASX (As at 3:59 PM AEDT on 10th February 2020).
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