Strike Energy Ltd. has agreed to acquire Talon Energy Ltd., subject to the satisfaction of various conditions, by way of a scheme of arrangement.
Strike and Talon are joint venture partners in onshore North Perth basin permit EP447 and made positive final investment decision (FID) to proceed with commercial development of Walyering in 2022 (OGJ Online, Aug. 15, 2022).
The project includes an up to 33 terajoule/day gas and 250 b/d condensate production plant at Walyering gas field following the successful appraisal of the field via the Walyering 5 and 6 wells, which delineated a gross 54 petajoules of 2P reserves and gross 32 petajoules of 2C contingent resources plus 0.8 MMboe of associated condensates.
Overall, the Strike-Talon combine is expected to have an aggregate 1,022 petajoules of independently certified Perth basin conventional gas 2P reserves and 2C resources.
In parallel with the deal, Talon will explore options to spin-out its 33% interest in the Gurvantes XXXV Project in Mongolia to Talon shareholders (OGJ Online, Nov. 9, 2022).
The acquisition of Talon by Strike is not conditional on completion of the Mongolian spin-out, and there is no guarantee that the Mongolian spin-out will be completed or that Talon shareholders will ultimately receive any value in respect of the Mongolian assets.
On closing, Talon shareholders will receive 0.4828 new Strike shares for each Talon share held. As a result of the transaction, Talon shareholders will own about 11% of Strike Energy.
The consideration has an implied offer price of $0.212 (Aus.) per Talon share for Talon’s Perth basin assets based on Strike Energy’s closing price of $0.440 per share on Aug. 11.