Drillsearch Energy to Takover Ambassador Oil and Gas

Drillsearch Chairman Jim McKerlie said:

“This transaction offers Drillsearch a significant opportunity to consolidate the company’s dominant position in the wet gas fairway in the northern part of the Cooper Basin through combining an interest in PEL 570 with adjacent permit PEL 101. The Coolibah 3D seismic survey has substantially de-risked both permits and identified significant prospectivity in the area, both in terms of conventional wet gas and the unconventional exploration being pursued by the existing PEL 570 joint venture.”

Directors' Unanimous Recommendation

The Directors of Ambassador have unanimously resolved to recommend that shareholders accept the Offer, in the absence of a superior proposal.

Support of Major Shareholders

The terms of the Offer are supported by a number of Ambassador's major shareholders.

Drillsearch has entered into acquisition agreements with several Ambassador shareholders under which it has agreed to acquire a total of 19.9 percent of Ambassador at an offer price of 1 Drillsearch share for every 5.4 Ambassador shares (i.e. the same consideration as under the Offer).

In addition, Fotoula Hatziladas and Eye Investment Fund Ltd, who collectively hold 17.6 percent of Ambassador, have advised Ambassador that they intend to accept the Offer within 14 days from the opening of the Offer in the absence of a superior offer.

Bid Implementation Agreement

Drillsearch and Ambassador have entered into a Bid Implementation Agreement which is appended to this Announcement at Schedule 2.


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