On January 26, PetroleumNews.net reported that Tomahawk and recently-listed KT2 had called for separate trading halts regarding a “material transaction” in the advanced stages of negotiation.

But for Tomahawk, it was a case of closing the gate after the horse had bolted, as its share price had already rocketed 20.7% to 35c.

Not long after, however, the companies asked for their shares to be returned to trading, when “these negotiations have not resulted in a transaction and have now ceased”, K2 told the Australian Stock Exchange.

Then in separate statements this Friday, Tomahawk and K2 announced plans to merge their businesses.

Under the offer, Tomahawk is offering six of its shares and three of its options for every 10 shares and seven options in K2.

K2 is recommending its shareholders accept the offer in the absence of a superior proposal.

Tomahawk said it believed the deal would “unlock significant shareholder value”.

“It is our view that the next phase for smaller players in the sector will be one of consolidation and it is our intention for Tomahawk to be an active participant in that process,” chairman Tony Brennan said.

“This first step is a major development for us as it brings together all the pieces required to build a successful company.”

Tomahawk’s bidder’s statement and K2’s target’s statement are expected for release by late March. If approved, the takeover would be completed in a further 90 days.

K2 listed on the ASX in March after raising about $12 million to invest in oil and gas drilling projects in Texas, Michigan, Louisiana, Illinois and Alabama.