The Perth-based company yesterday said it had reached a deal to divest its onshore permit interests in the Bowen-Surat and Cooper-Eromanga Basins for 15 million fully paid ordinary shares and 15 million five-year options in Bow Energy at 50c each. As a result of the transaction, Oilex will become the largest shareholder in Bow.

Oilex managing director Dr Bruce McCarthy said the agreement meant the company would retain share market exposure to discoveries made within the sold acreage.

“This marks the final phase in Oilex’s restructuring and repositioning as a substantial international oil and gas company with a strong growth focus,” McCarthy said.

“This agreement enables us to concentrate our resources on our near-term development opportunities in India and our exploration assets in Australia and Oman, while continuing to participate in the upside of drilling programs within these Queensland exploration permits.”

Bow Energy managing director Ron Prefontaine said the acquisition consolidated its position as the largest acreage holder in the central Eromanga Basin.

“The acquisition of Oilex’s assets fits well with Bow’s primary focus on oil exploration and production in Queensland’s producing basins,” he said.

“The purchase gives Bow the opportunity to take part at higher interest levels in [our] existing assets as well as some new areas in the oil-prone regions of the Surat Basin.”

Bow will also earn an extra 40% direct working interest on top of the 25% interest it is already earning in the Barcoo Block of ATP 794P by contributing to the costs of drilling the upcoming Banff-1 oil exploration well.

Banff-1 is targeting a structural prospect with up to 34 million barrels (MMbbl) of recoverable oil potential and tests a structural trend with prospects having the potential to contain up to 90MMbbl of recoverable oil.

The deal is subject to completion of due diligence by Bow and obtaining shareholder approval for the issue of shares and options to Oilex.