3d Oil Lets Drillsearch Offer Slide
The Age
Saturday January 17, 2009
BASS Strait oil junior 3D Oil has dismissed a conditional $21.4million scrip-only offer from Sydney-based Drillsearch Energy.
The offer is one of the first expected this year as small producers and explorers seek to consolidate in the face of sharply lower oil prices.But the Drillsearch offer of four of its shares (trading at 2.6 each) for each 3D share (trading at 9.7 each) has not got to first base with 3D.Managing director and an 18per cent shareholder in 3D, Noel Newell, said he would not be accepting the offer, which is subject to a minimum acceptance condition of 50.1per cent.Drillsearch last week secured a relevant interest in a 19.9per cent stake in 3D and said it would be seeking a friendly merger with the company.Mr Newell highlighted that, at this stage, Drillsearch does not actually own any 3D shares.3D is holding cash of about $12million, or close to 6 a share. That cash-holding compares with the implied value of the Drillsearch offer of 10.4.Strip out the cash and Drillsearch is effectively offering $9million in scrip for 3D oil exploration assets, the most advanced of which is its 7.86million barrel West Seahorse oilfield in Bass Strait. 3D is working with consultants on a development plan for the field.
© 2009 The Age