Nexus merges with Anzon; overrides Arc's 2007 bid

Jan. 23, 2008
Nexus Energy has overridden an offer put on the table last year by Arc Energy to merge all its assets with those of Anzon Australia.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Jan. 23 -- Nexus Energy Ltd., Melbourne, has overridden an offer put on the table last year by Perth's Arc Energy Ltd. to merge all its assets with those of Sydney-based Anzon Australia Ltd.

In a joint statement this week Nexus and Anzon said they have agreed to a merger that values Anzon at about $648 million (Aus.) or about $1.75/share.

Arc's offer in December valued Anzon at $1.175 a share, and Arc says it does not intend to raise the bid in response to the Nexus move because, after extensive detailed due diligence, it does not consider there is any justification for an increase.

The new Nexus-Anzon entity will be led by Nexus Managing Director Ian Tchacos. It will have a market capitalization of about $1.5 million and a resource base of about 169 million proved and probable boe. It will be the fifth largest petroleum company on Australia's ASX exchange and the third largest in terms of 2P reserves.

The merger will combine Anzon's current production from Basker-Manta oil fields in Bass Strait with Nexus' soon-to-be developed Longtom gas field in Bass Strait and the Crux liquids project off Western Australia.

The merged entity's net production is forecast to increase to 16,900 boe/d in 2009 (including Longtom production) from 4,600 b/d oil this year (from Basker-Manta). In 2011 production is expected to rise to 57,000 boe/d when Crux project comes on stream.

Meanwhile, there are a number of exploration prospects to drill, such as Yngling in the Perth basin off Rottnest Island, several prospects in the Bonaparte Gulf, one in New Zealand's offshore Canterbury basin, and the continuing work at the Echuca Shoals discovery in the Browse basin off Western Australia.