As a result of the pre-emption, the Wandoo oil field will be excluded from the assets Arc will acquire from Wandoo Petroleum, an affiliate of Mitsui and Inpex.
The Perth-based mid-cap was in a trading halt all of yesterday as it undertook a $90.4 million share placement that was closed "heavily oversubscribed" to fund part of the Wandoo acquistion.
Arc also released a statement yesterday afternoon in which it revised the terms of the offer.
It will now pay $US189.6 million ($A229 million) for a 24% stake in the Cliff Head oil field and 12.5% of the BassGas project. It would have paid an additional $A125.4 million for the Wandoo stake.
And instead of a 336% jump in its proved and probable reserves, the new deal is expected to result in a 190% rise to 19.4 million barrels of oil equivalent.
Likewise, net 2008 production is expected to increase 72% to 3.2MMboe, instead of 4.2MMboe.
“While we are disappointed not to be able to acquire the Wandoo oil field interest, the fact that Vermilion chose to exercise their pre-emptive right vindicates our assessment of the value of the asset,” Streitberg said.
“We applied the same rigour to our assessment of the Cliff Head and BassGas assets and are confident we are acquiring a suite of high quality assets at an attractive price.”
As a result of the smaller acquisition, Arc has proposed a different way of funding the transaction.
As well as the $90.4 million share placement, which represents about 28% of its issued capital, Arc
plans to raise a further $A25 million via a share purchase plan to all existing Arc shareholders.
The remainder will be funded by a senior debt facility.
