The acquisition was called off after events changed the valuations of the assets on the table. Woodside decided against farming into the two companies Kenyan acreage and the Eritrean government declared their joint application for the offshore Massawa block was null and void.

Pancon said it would now acquire Afrex for a maximum consideration of A$11.305 million by the issuing up to 142,058,306 ordinary fully paid shares to Afrex shareholders.

Pancon has also agreed to pay a royalty of 2% in respect to applications in the “pipeline” to the Afrex shareholders. Furthermore Pancon will reimburse agreed joint venture project costs of up to $500,000 to Afrex. These costs are expected to be recovered under farm-out agreements.

Pancon said it would fund the acquisition by raising up to $2.9m by way of a non-renounceable share offer to all shareholders. It said 41.8 million shares will be offered on a one for four basis at an issue price of $0.07 (7cents) per share.