The historic Victorian company has been largely cooling its heels since that state's onshore exploration and drilling moratoria came into play earlier in the decade and, clearly tiring of the main share of its work being legal battles, is moving next door to get hold of Rawson, which also operates in Otway Basin, targeting the same formations across state lines in South Australia. 

 

Lakes' offer is 15 shares for each Rawson share, valuing Rawson at just A$3.75 million. 

 

It has already entered into a pre-bid acceptance deal with major Rawson shareholder Lynley Jane Hardie and Hardie Garnet  for 19.99% of the issued shares and has provided the company with a $750,000 secured working capital facility. 

 

The deal has a minimum 50.1% acceptance level and will give Rawson shareholders a maximum 5.6% share of Lakes, whose major shareholders include Gina Rhinehart's Hancock Prospecting and Nick Mather's Armour Energy. 

 

Rawson director Richard Ash will join the Lakes board if the transaction completes. 

 

The move will "integrate" both companies' exploration work, particularly in the Otway Basin, and provide cost reduction through synergies and efficiencies" , albeit ones yet to be quantified, both explorers said yesterday. 

 

It will also "deliver a combined exploration portfolio with improved geological and geopolitical diversity" given Rawson holds frontier licenses in PNG and Lakes has holdings in Queensland. 

 

Nangwarray-1, in PEL155, was awarded a Plan for Accelerating Exploration (PACE) Gas Grant of $4.95 million by the SA government, which rates far more highly in Canadian conservative think-tank the Fraser Institute pro-business survey of exploration destinations than Victoria, which is viewed less kindly than Myanmar. 

 

Lakes sees near-term drilling of Nangwarry-1 well as a valuable precursor to longer term realisation of the "massive potential" of its long-stalled Portland Energy Project, which may well still get off the ground given the moratorium on conventional onshore drilling expires in Victoria in 2020. 

 

Fraccing and CSG exploration are permanently banned in Victoria.

 

Lakes' western Victorian exploration wells target the same formations as Nangwarry-1 and the former has experience with the design and operation of what it calls "exploration wells of this nature" which it can use in the management of the long-delayed Nangwarrry. 

 

Any decent result will further prove up Lakes' own acreage. 

 

The Chris Tonkin-led Lakes  took the state government to the Victorian Supreme Court last year as it believed actions halting projects already in play was not lawful. A court date in March saw the judge reserve his decision in the multi-billion dollar compensation claim.

 

To support its new direction Lakes intends to undertake yet another capital raising targeting between $8.5-$10 million. It suggested that new shares issued will not be more than 13.5% of shares on issue if the takeover completes. 

 

Lakes also hopes for private treaty arrangements with Rawson's option holders to acquire or cancel their options in return for Lakes options.

 

No shop and no talk restrictions apply to Rawson and Lakes has the option to counter any subsequent, better offer made and an agreed break fee of $33,000 by Rawson may be paid under specified circumstances. 

 

Lakes was trading 0.2cps this morning and Rawson down 2.7% at 3.6cps