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Eden to merge UK assets with JV partner UKOG

Eden to merge UK assets with JV partner UKOG

Photo by Bloomberg

1st October 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed Eden Energy is considering merging its UK gas and petroleum assets with its UK joint venture (JV) partners, owned by UK Onshore Gas (UKOG).

Eden said on Wednesday that it would transfer its 13 petroleum and development licences in England and Wales, to UKOG. Post the merger, UKOG would issue Eden subsidiary Adamo Energy with a 33.33% shareholding in the combined company, as well as £1-million unsecured noninterest bearing loan notes.

Adamo would also receive a further £69 210 unsecured noninterest bearing loan notes in repayment of certain prepaid licence fees and £75 000 unsecured noninterest bearing loan notes as compensation for a pre-existing liability of one of UKOG’s subsidiaries, which would not be discharged prior to the completion of the merger.

Following the merger, UKOG would either list on the Aim, after raising about £10-million, or would complete one, or more, off-market capital raisings of at least £10-million.

Adam would also appoint a director to the UKOG board.

The merger agreement was subject to a number of conditions, including Eden shareholder approval and the finalisation of UKOG’s accounts for the year ended December 2013.

Eden reported that a shareholding in UKOG, rather than a shareholding in the project areas, would provide a far better structure from both an operational perspective and for capital raising purposes, as it eliminated a major potential source of conflict between the JV partners. As a result, the projects would likely be viewed as a better investment by the financial markets, the company said.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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