Oilex exiting Australia with proposed sale of Cooper-Eromanga interests

Oilex has signed a binding heads of agreement with Doriemus, an ASX-listed company, for the proposed sale of all of its interests in the Cooper-Eromanga Basin.

The AIM and ASX-listed firm said that, under the terms of the agreement, it was intended that Doriemus would acquire all of the issued capital of CoEra, which is a wholly-owned subsidiary of Oilex.

At completion, CoEra would own all of Oilex's direct and indirect interests in the Cooper-Eromanga Basin, including a 79.33% direct interest in two petroleum exploration licences - PEL 112 and PEL 444 - with an option to acquire the remaining 20.66%, and the right to acquire 27 petroleum retention licences from Senex.

As consideration for the proposed transaction, Doriemus would issue 28,301,887 CHESS depositary interests (CDIs) representing 28,301,887 shares in Doriemus, to Oilex.

The company said it would nominate 2,830,188 CDI's to Orthogonal Enterprises, for past and future services rendered in building the Cooper-Eromanga portfolio.

Oilex said Doriemus' closing share price of three Australian cents on 28 January valued the net consideration payable at 0.76m.

Alternatively, based on Doriemus’ half-year financial statements, the net asset value is more than nine Australian cents per Doriemus share, valuing the net consideration payable at AUD 2.4m.

In addition, it said Doriemus would also “irrevocably and finally” assume the obligations of Oilex under the Senex agreement to acquire the Northern Fairway petroleum retention licences, namely the assumption of existing abandonment liabilities, estimated at $1.1m, as well as payment of future petroleum retention annual fees and work programme obligations, including exploration well commitments in licences PEL 112 and PEL 444.

Assuming completion of the proposed transaction, Oilex said it would no longer have any oil and gas asset interests in Australia, and instead would be focussed on further developing its asset base in India and the UK continental shelf.

Subject to completion, Doriemus also proposed to appoint Oilex's chairman Brad Lingo as its new managing director.

In that case, Lingo would also step down as the chairman of Oilex following the appointment of a new Oilex chairman.

It was also proposed that Oilex's managing director Joe Salomon would be appointed as a director of Doriemus.

The independent directors of Oilex said they were currently conducting a formal process to appoint a new chairman.

“The board has assessed many options to maximise value for our shareholders and the proposed sale of the Cooper-Eromanga Basin assets to Doriemus ensures that Oilex retains material leverage to the Cooper-Eromanga Basin assets without the associated funding burden and consequential dilution,” said managing director Joe Salomon.

“The decision also reflects Oilex's dominant European shareholder base and trading volumes on the London AIM.”

Salomon said that importantly, it would allow the company to focus on its core assets in India and expand its portfolio in the UK continental shelf, which the board “looked forward” to progressing.

“In any event, it is anticipated that eligible Oilex shareholders will also have the opportunity to increase their exposure to the Cooper Basin portfolio via the priority offer in the proposed Doriemus capital raising.”

At 1316 GMT, shares in Oilex were up 0.57% in London at 0.18p.