Sona Petroleum Berhad's plan to make its first upstream petroleum asset purchase for a small producing oilfield offshore Australia has been dashed after shareholders voted overwhelmingly against the proposed acquisition, the company said Tuesday in a filing with local exchange Bursa Malaysia.
"The Board of Directors of Sona Petroleum Berhad wishes to announce that at the Adjourned EGM (Extraordinary General Meeting) held today, the special resolution in relation to the Proposed Acquisition was not passed by the shareholders of Sona Petroleum", the company said.
More than three quarters, or 77.39 percent, of Sona's shareholders voted against the special resolution on the acquisition in which the firm's Australian subsidiary Sona E&P (Perth) Pty Ltd. will acquire Stag Oilfield in Production License WA-15-L offshore Western Australia from a joint venture comprising Quadrant Northwest Pty Ltd. and Santos Offshore Pty Ltd. for $25 million. Only 22.61 percent of the shareholders were in favor of purchasing the upstream petroleum asset.
The Malaysian firm originally agreed to acquire Stag oilfield for $50 million, but its purchase price was reduced to $25 million following renegotiations with the sellers earlier this year to take into consideration lower global oil prices.
The rejection by shareholders is a setback to Sona's plan to complete a qualifying acquisition (QA) within the three year period given to special purpose acquisition company (SPAC) that raised funds through an initial public offering (IPO) on Bursa Malaysia.
SPAC is a firm that has no operations or income-generating business at the point of its IPO but undertakes a public listing for the purpose of securing funds to acquire operating companies or assets, or QA. Sona raised around $140 million (MYR 550 million) from its public listing on July 30, 2013.
Despite the latest development, Sona Chairman Mohamed Khadar Merican commented that the firm still has about three months to pursue its QA.
"We still have three months ... before our QA deadline on July 29. We will discuss with our lawyer and explore what are the options we have," he said, as quoted Wednesday in local business media The Edge Markets.
However, Mohamed Khadar said Sona might opt not to seek shareholders' consent on other potential asset buys should the shareholdings remain unchanged as a "few big shareholders are not keen on oil assets".
Sona inked the purchase agreement for Stag Oilfield in November 2015 with Quadrant and Santos to acquire a full stake in Production Licence WA-15-L, Pipeline Licence WA-6-PL and associated assets. If the deal had been completed, Sona would have taken over operatorship of the oilfield, which is located in the Dampier sub-basin of the Carnarvon Basin in water depths of approximately 164 feet and approximately 37 miles offshore.
Earlier in January 2015, Sona scrapped plans to acquire a stake in two oil and gas blocks -- B8/38 and G4/50 concessions -- from Salamander Energy Plc in the Gulf of Thailand for $280 million after Ophir Energy Plc proposed to buy Salamander via a share swap.
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