SAPEX Sells Itself to Linc Energy

SAPEX Limited has entered into an agreement with Linc Energy Limited whereby, subject to the requisite shareholder and Court approvals, Linc Energy will acquire all of the shares and options in SAPEX via Schemes of Arrangement for a cash consideration of 72 cents per share and 50 cents per option.

SAPEX shareholders and optionholders will also have the alternatives of taking either 50%, or 100%, of the cash consideration in Linc Energy shares at the Volume Weighted Average Price (VWAP) of Linc Energy shares in the five trading days up to and including the date of the SAPEX shareholders' and optionholders' meetings to approve the Schemes.

The transactions are subject to satisfactory results from due diligence to be undertaken by Linc Energy and SAPEX over the next ten days.

General Meetings of SAPEX shareholders and optionholders to consider the acquisitions by Linc are likely to be held in August 2008.

The proposed acquisitions have the unanimous support of the directors of SAPEX. SAPEX directors will recommend the Linc Energy proposal in the absence of a superior proposal and subject to confirmation from an independent expert that:

  • The Linc Energy proposal is in the best interests of SAPEX shareholders and optionholders; and
  • SAPEX shareholders and optionholders vote to approve the proposal at the relevant Scheme meeting.
  • The directors of SAPEX note that Linc Energy's proposed offer of 72 cents cash per share represents:

  • a premium of 28.9% to the 10 days' VWAP price of SAPEX shares; and
  • a premium of 41.5% to the 1 month VWAP price of SAPEX shares; and
  • a premium of 62.5% to the 3 months' VWAP price of SAPEX shares, and its proposed offer of 50 cents cash per option represents:
  • a premium of 57.5% to the 10 days' VWAP price of SAPEX options; and
  • a premium of 73.1% to the 1 month VWAP price of SAPEX options; and
  • a premium of 101.7% to the 3 months' VWAP price of SAPEX options.
  • SAPEX holds seven Petroleum Exploration Licenses (PELs) covering some 65,000 sq km, essentially the entire oil and gas prospective area of the underexplored Arckaringa Basin in central South Australia; and within that area two mining exploration licenses (ELs) covering Weedina (EL 3326) and Wintinna East (EL 3325) (see SAPEX ASX releases dated 28 June 2007 and 9 August 2007), which are also amenable to underground coal gasification (UCG).


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