Drillsearch said its corporate adviser, Claymore Capital, had entered a call option with Beach to acquire from Beach’s entire holding in Great Artesian. The option extends to February 12.
Beach currently holds 19.3% of Great Artesian total share issue.
Great Artesian shares rose 9c to 35c in the wake of the offer, but has fallen back into the low 30s over the course of morning trading today.
Beach has recently made itself unpopular with other Great Artesian shareholders after moving to dismiss the company’s popular managing director Ray Shaw. Great Artesian’s annual general meeting saw other shareholders group together to overrule Beach, the major shareholder, over changes to the board.
Beach may now be keen to take a small profit and move on from Great Artesian. Drillsearch is certainly keen to grab a slice of Great Artesian’s Cooper action.
“Drillsearch has through its involvement in the [Santos-operated] Cooper Oil Project achieved major increases in its oil reserves through 2006,” the company told the ASX on Friday.
“Its Cooper Basin production and exploration interests are concentrated in the southwest Queensland section of the Basin. Drillsearch has for some time been seeking opportunities to diversify its interests into South Australia.
“Great Artesian has oil production and substantial gas and natural gas liquids reserves located in the South Australian section of the Cooper Basin adjacent to transportation infrastructure.”
For some time, PetroleumNews.net has been predicting a consolidation among Cooper Basin explorers and producers. Beach has already taken over Delhi Petroleum and soon after it moved in June to buy its strategic stake in Great Artesian, Shaw conceded that this could be a precursor to a takeover.
If Beach abandons plans to control Great Artesian’s board, this could clear the way for a close alliance or even a merger between Drillsearch and Great Artesian.
Drillsearch said during the option period, it and Great Artesian would “consider several alternatives for enhancing shareholder value”.
