New Standard Energy Limited (New Standard or Company) announced Monday that it has reached agreement with Sundance Energy Ltd. (SEA, Sundance) for the sale to Sundance of New Standard’s United States and Cooper Basin assets for total consideration of approximately $18.4 million (AUD 24 million).
Under the Share and Asset Sale Agreement (Agreement) signed with Sundance, Sundance will directly acquire New Standard’s Colorado County Project in the U.S. and will indirectly acquire its Atascosa Project and interest in Cooper Basin permit PEL 570 in Australia through the purchase of New Standard’s relevant subsidiaries, inclusive of their associated assets and liabilities.
The transaction will eliminate all New Standard debt and provide sufficient ongoing liquidity to allow the Company to explore options for future development of its Western Australian onshore assets.
In conjunction with this transaction, Sundance will also immediately purchase the Company’s shareholding in Elixir Petroleum Ltd. for approximately $186,551 (AUD 243,000). This purchase is not
Under the Agreement, Sundance will assume 100 percent ownership of:
In return, Sundance will assume all debt and liabilities associated with the Atascosa Project of approximately $16 million (AUD 20.72 million equivalent) and all forward obligations associated with PEL 570, and will issue to New Standard six million Sundance shares, the majority of which will be freely tradable. Based on the 5 day VWAP of Sundance shares of $0.4067 (AUD 0.53) June 25, the scrip component of the consideration is valued at $2.44 million (AUD 3.18 million). In total, the scrip plus debt and liability assumption equates to approximately $18.4 million (AUD 24 million) as total transaction consideration.
The Agreement contains various conditions that are normal for this type of transaction, including further due diligence to be completed by Sundance within 21 days of execution and New Standard shareholder approval. A portion of the Sundance shares will be escrowed to cover any material defects identified in the due diligence investigations (of which nothing material has been identified to date) and to meet potential warranty claims post-completion (6 month maximum period).
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