Reabold Resources to acquire E&P business Simwell Resources

Oil and gas investor Reabold Resources has conditionally agreed to acquire exploration and production outfit Simwell Resources for "a low acquisition cost".

Reabold will make a total initial consideration, plus the repayment of all outstanding creditors/liabilities, of £1.0m for Simwell in order to "substantially increase" its footprint in the emerging Zechstein trend, complementing its onshore position in PEDL183, including the West Newton project.

The AIM-listed group added that £361,840 of the acquisition will be satisfied by the issue of 134.10m new ordinary shares in the company at a price of 0.27p per share, while £305,157 will be payable to certain creditors via the issue of 113.02m new ordinary shares, with a further £333,001 will be paid to creditors in cash from existing resources.

A contingent deferred consideration of £150,000 may also be made payable to the sellers and will again be satisfied by the issue of new ordinary shares.

Co-chief executive Stephen Williams said: "We are delighted to be able to acquire this set of highly prospective assets at a compelling valuation. This extends our significant position in the emerging Zechstein play into the offshore, and at an exciting time for the play ahead of the drilling of Pensacola."

Reporting by Iain Gilbert at Sharecast.com