Drillsearch Energy Limited reported Monday an increased offer (Offer) by its wholly owned subsidiary Drillsearch (Central) Pty Limited to acquire all of the ordinary shares in Ambassador Oil and Gas (Ambassador) it does not already own for 1 Drillsearch share per 5.4 Ambassador shares to now include $0.047 (AUD 0.05) cash per Ambassador share.
Drillsearch Chairman Jim McKerlie said:
“We believe our scrip and cash offer for Ambassador is compelling compared to Magnum Hunter’s competing offer as it represents a premium to that offer and provides Ambassador shareholders with the opportunity to hold shares in Drillsearch, an ASX listed domestic company. The competing Magnum Hunter offer would result in Ambassador shareholders owning New York Stock Exchange listed shares and as such would be subject to a different regulatory regime, have exposure to foreign exchange risk and cross border tax complexities”.
"Furthermore Drillsearch, through its sole focus on the Cooper Basin, provides Ambassador’s shareholders with a broader exposure to this major Australian region whereas Magnum Hunter is focused primarily on US shale gas."
“Importantly, Ambassador’s board has recommended that Ambassador shareholders accept the revised Drillsearch offer, in the absence of a superior offer.”
“Drillsearch is looking forward to working closely with New Standard Energy (New Standard) and Magnum Hunter who is its 17 percent shareholder and technical adviser to progress exploration of the highly prospective area of the Patchawarra trough covered by PEL 570”.
The cash component of the Offer is fully funded through existing Drillsearch cash balances.
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