Tongues were wagging at the Good Oil Conference in Perth yesterday when both Beach and Delhi suddenly cancelled their presentations.

Conference delegates' gossip and speculation proved to be well founded when the takeover announcement was released to the market this morning.

The announcement actually preceded Beach's admission that it had made a formal bid for unlisted Delhi and the associated listed Floating Interest Energy Linked Securities (FIELDS) loan notes issued by the Australian Onshore Energy Fund (AOEF).

Beach told the Australian Stock Exchange this morning that the acquisition would give it a 21% interest in more than 200 oil and gas fields covering the Cooper and Eromanga Basins in South Australia and Queensland.

The purchase is expected to almost triple its oil and gas reserves from 36 million barrels of oil equivalent to more than 95MMboe.

In addition, Beach Petroleum has assumed Delhi’s $230 million debt and will offer to redeem the FIELDS notes for cash.

In mid-July, Santos placed a $474 million bid on the table for Delhi in what looked to be a fairly straightforward takeover.

But then two weeks later, rumours begun circulating that Beach was likely to rival Santos in the bidding, but the company denied actually making an offer.

And that was the last news on the subject, until Beach suspiciously entered a trading halt last Thursday.

Beach said the acquisition would be funded through a combination of an equity placement and renounceable rights issue and a debt facility.