The extraordinary general meeting will consider if $US25 million is too high a price for investors in the currently low oil price environment, although initially when the agreement was struck last year the deal was pitched at $50 million.
It was only after an independent technical and asset valuation from Gaffney, Cline and Associates in early February which concluded that the agreed to price was substantially above the fair market value that the deal was renegotiated to a level that is seeing the company pay just under $US1.50/bbl for 2P reserves.
The GCA assessment was more in line with Wood Mackenzie's valuation of $20 million, despite sources telling Energy News that the original $50 million price tag could actually increase at the time of the deal.
Managing director Tan Sri Hadian Hashim told a briefing in Kuala Lumper this week that he has been presenting the economic case to investors, because he believes in the story.
The trick will be convincing shareholders that Stag is a long-term development story, being bought at the bottom of the market, and not a hopeless asset in a terminally sick market.
Because Sona is a special-purpose acquisition company it must offer shareholders a cash-back option if they vote against the acquisition, which certainly must be a tempting proposition to shareholders looking for short-term gains in other sectors.
The proposal needs 75% shareholder approval and those who vote against it will get their cash value per share back.
Sona raised about RM550 million ($180 million) when listing on the Bursa Malaysia in 2013.
Its first attempt at asset acquisition was a bid for a 40% stake in London-based Salamander Energy in late 2014.
Sona wanted a stake in the Greater Bualuang area in the Gulf of Thailand and was offering around $US280 million, however when Ophir Energy made its bid for Salamander the wheels came off the deal.
The area contains the Bualuang oil field, Salamander's flagship asset with an expected 75 million barrels, and the G4/50 exploration concession, which contained six sub-basins.
With Bualuang off the table, Sona identified Stag as being the next best thing: a modest producing asset with development upside.
If Sona gets approval it will spend around 25% of its current treasury of RM529.2 million on the deal, with the rest to be used to meet working capital requirements and carry out an infill drilling development plan.
Sona plans to further develop Stag with the drilling of new production wells within the existing well pattern to accelerate recovery of oil.
The Stag and WA-15-L has reserves of 13 million barrels (1P), 16.2MMbbl (2P) and 24MMbbl (3P) of respectively.
Stag, which is located 60km offshore WA in a water depth of around 50m, has been in production since 1998 and is producing 4600 barrels oil per day from 10 wells in the Dampier sub-basin.
The production licence for Stag expires in August 2018 and is renewable for a further 21 years.
The deal, if it goes ahead, will be backdated to mid-2015.
