Drillsearch Bids for Ambassador Oil & Gas

Drillsearch Energy, which is active in Australia’s Cooper Basin, has announces its intention to make a conditional off-market takeover offer for Ambassador Oil and Gas, valuing the company at about A$40 million.

The offer consideration will be one Drillsearch share for every 5.4 Ambassador shares.

According to Drillsearch, transaction will consolidate its dominant position in the Northern Cooper Wet Gas Fairway by combining Ambassador’s 47.5% non-operated interest in PEL 570 with Drillsearch’s 80% operated interest in PEL 101 and would be another step towards consolidation of South Australia’s unconventional petroleum resources.

Directors of Ambassador have unanimously recommended that shareholders accept the offer.

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.”

In PEL 570 Ambassador is fully carried by New Standard Energy for a A$42.5 million exploration program. The program specifically targets the permit’s unconventional resource potential in the tight sands and shale in the Permian section of the Patchawarra Trough. This program is to be operated by New Standard Energy, with technical support from US unconventional E&P company Magnum Hunter Resources which has also taken a 17% interest in New Standard.