Eden Energy to sell all of its UK shale gas portfolio to Shale Energy
Shale Energy plc has bought-out Eden’s UK assets – meaning that they’ve become one of the prime movers in the future of UK extreme energy in South Wales and Southern England (including Somerset).
See http://www.shale-energy.co.uk/sites.php for their map. Full statement on Eden web site – http://www.edenenergy.com.au/pdfs/c6b848f1e3ddd7b9f4f1c26d7f4e966e.pdf
They still have to raise the capital for investment in new projects by November to complete the deal though, which in itself is a test of how fast/far the UK scene will develop over the next few years.
Eden Energy to sell all of its UK shale gas portfolio to Shale Energy
Shale Energy Insider, 17th September 2013
Perth-based Eden Energy has signed a deal to sell all of its UK shale gas – as well as coal seam methane – portfolio to London-based unlisted company Shale Energy for A$19.3 million (view press release). The deal has been struck on more favourable and significantly higher terms than the original May sale transaction which collapsed in August.
The new agreement, which includes a non-refundable A$94,291 deposit, a further cash payment at settlement of A$1.88 million and a separate A $410,843 placement by Shale for 12-month escrowed shares in the Australian company, will see Eden by November add more than A$2.39 million to its cash in bank. In addition, the sale terms will see the Eden emerge with a 29.9% direct stake in Shale Energy – giving it exposure to any future discoveries and gas developments by shale in the England and Wales-based assets acquired from Eden.
Eden terminated the original arrangement last month, to allow it to pursue alternative sales options with its UK joint venture partner, after Shale was unable to meet on time a condition precedent.
Eden Executive Chairman, Mr Greg Solomon, said that Shale Energy, which is securing a strong management team, had remained keen to be the ultimate buyer of the assets and this had allowed Eden to negotiate new and higher value sale terms.
“We have re-instated our relationship with Shale Energy but on revised terms that will inject approximately an additional A$683,000 cash into Eden plus a further A$1.7 million worth of shares in Shale compared to the original May deal,” Solomon said.
The sale assets comprise Eden’s 50% joint venture interests in 17 Petroleum and Development Licences (PEDLs) in England and South Wales and its 100% interest in one further PEDL in South Wales.
The deal remains conditional on Shale Energy completing its capital raising by November 2013.
Previously announced independent reports on Eden’s UK gas assets found that the licences have the potential to contain significant quantities of hydrocarbons.
“Australia’s offshore Gorgon gas field in Western Australia is reported to contain approximately 40TCF of gas and is planned to produce 15 million tonnes of LNG per year for between 40-60 years so, although it is very early days and is very much dependent upon how gas is actually there and how much is recoverable, that’s the sort of potential these UK assets could perhaps offer,” said Solomon.
“The UK is now an importer of natural gas and on a total country consumption basis, the aggregate of the potential of our UK assets makes them a very significant amount of gas in the context of the UK gas market,” he added.
Shale exploration in the UK has been supported by the government but protested by environmentalists. Earlier this month, the Department of Energy and Climate Change’s chief scientific adviser, David Mackay, announced that shale gas production in Britain should have no adverse effects on the UK’s ability to reach its targets for climate change to allay fears about environmental impact.
Posted on: September 21, 2013