Bass Oil to acquire onshore assets from Beach Energy and Cooper Energy in $1.3m deal
Oil player Bass Oil (ASX:BAS) has confirmed that it will spend $1.3 million to acquire a portfolio of productive and earnings accretive interests in South Australia’s coastal Cooper Basin from Australian listed companies Beach Energy (ASX: BPT) and Cooper Energy (ASX: COE).
A sale and purchase agreement signed in March will allow Bass to acquire properties including the Worrior and Padulla oilfields (producing approximately 75 barrels of oil per day), the Kiwi gas discovery (with a potential P50 resource of 23.9 billion cubic feet) and several potential appraisal and exploration targets.
The company will pay two cash consideration to Beach and Cooper of $650,000 each for the assets and assume all future restoration obligations.
Upon closing of the acquisition, Bass will own interests ranging from 74% to 100% in eight properties of Cooper Basin.
Gas upside down
The new assets offer Bass a high-impact gas upside during a time of record prices and significant market shortages.
Spot purchases of natural gas are currently getting a premium over contractual deals, with prices between $30 and $40 per gigajoule, which is up to a 400% increase from prices earlier this year.
Bass will begin studies to assess the potential for Kiwi stratigraphic upside trapping, primarily aimed at reserve growth beyond the structural trap.
He will also perform an economic assessment of the field’s connection to the Moomba gas gathering and processing system and potential sales in the growing East Coast gas market.
Bass chief executive Tino Guglielmo said the acquired portfolio would establish the company’s footprint in the Cooper Basin.
“This acquisition is an important step towards [our company] become a major owner-operator in the Cooper Basin,” he said.
“Bass has a proven track record of extracting value from mature fields, and we’re excited about the transformative nature of this step…this is a watershed moment as we seek to become a self-funded oil and gas producer on the global market. Australian market.
He said the company would exploit the acquired exploration targets and develop a suite of suitable projects capable of achieving a medium-term production base of over 1,000 boepd per day.
The Cooper Basin assets will complement Bass’ presence in Indonesia’s oil-rich South Sumatra Basin, where it retains a 55% operating interest in the producing KSO Tangai-Sukananti.
Within the license is the Tangai field, which was discovered in 1992 and is a structural closure on the reverse side of the northeast-southwest trending fault to the east of the acreage.
Bass commissioned the Tangai-5 development well last month and it remains the highest of its kind on the structure, producing from the main M target reservoir which has the best estimate of remaining recoverable reserves of around 435,000 barrels. oil (share of the Bass joint venture) .
The well is currently producing approximately 750 bopd (Bass joint venture share), which has increased KSO Tangai-Sukananti’s total exports from approximately 300 bopd to its rated export capacity of 1,000 bopd.
Given the recent sharp rise in global oil and gas prices, Bass expects oil sales to repay its initial investment in Tangai-5 within two months.
“Indonesia has been our focus for several years and provides an excellent base for our exciting acquisition of Cooper Basin,” Mr. Guglielmo said.
“It is pleasing to see that the Tangai-5 far exceeds our initial expectations at a time of high commodity prices…it represents our best result in Indonesia to date.”
The company, which currently trades with a market capitalization of approximately $7.1 million and an enterprise value of $5.6 million, aims to generate free cash flow of approximately $9 million in over the next 12 months following the closing of the acquisition.
Capital raising deficit
Bass Oil is raising capital to fund the costs of the Cooper Basin transaction and to cover planned production enhancement and exploration activities.
The raise is designed as an irrevocable 1-for-2 rights offering at a price of $0.045 per share, with eligible shareholders also receiving a free attached Bass option with each share subscription.
Its objective is to offer investors the opportunity to participate in a fundraiser at the same issue price as the $1.2 million placement made by the company in March.
Peak Asset Management was named lead manager for the fundraising, which aimed to issue 89.3 million new shares and options.
However, Bass revealed that the total number of requests for 13.3 million new shares was below the target amount. Peak will use the next three months to place the remaining 75.9 million missing shares.
Bass directors have already pledged to increase.
Mr. Guglielmo will acquire 5.2 million shares for a total consideration of approximately $238,000; Chairman Peter Mullins will acquire 766,667 new shares for approximately $34,500; Mark Lindh will acquire 1.45 million shares for $65,400; and Hector Gordon will acquire 333,333 new shares for $15,000.