PERTH (miningweekly.com) – ASX-listed Mineral Resources (MinRes) has flagged an off-market takeover offer for its joint venture (JV) partner ASX-listed Norwest Energy.

MinRes on Friday said it would offer one fully paid ordinary share for every 1 367 Norwest shares held, implying an offer price of 6c a share for Norwest shares. The implied offer represented a 33% premium to Norwest’s closing price on December 15, and a 27% premium to the company’s one-month volume weighted average share price.

Norwest’s principal asset is a non-operating interest in onshore Perth Basin exploration permits EP 368, in which it holds a 20% interest, and EP 426, in which it holds a 22.22% interest. MinRes and its subsidiaries are the permit operators and owners of the remaining interest in EP 368 and EP 426.

MinRes, which already holds a near 19.9% interest in Norwest, told shareholders that the script offer meant Norwest shareholders would retain exposure to the two exploration permits, which include the Lockyer Deep gas discovery, but meant that shareholders would no longer be exposed to funding and development uncertainties.

MinRes has identified Energy as one of four growth pillars and has been building its onshore gas acreage position across the Perth and Carnarvon Basins since 2015, establishing a strong portfolio of development opportunities, headlined by the significant Lockyer Deep conventional gas discovery made by MinRes and Norwest on EP 368 in 2021.

The company has an active plan of exploration activities for its Perth Basin permits that includes the drilling of six wells over the next two years, commencing in early 2023, and the fast-tracking of appraisal and development studies at Lockyer Deep.

The company said in a statement on Friday that its interest in and operatorship of EP 368 and EP 426 underpins the its view that acquiring minority joint venture partner Norwest is a logical and accretive addition to unlocking the potential of its portfolio of gas assets.

This offer aligns with and supports MinRes’ Energy strategy, which is focused on delivering a low-cost, long-life secure energy supply, including for the company’s lithium and iron ore mining operations in Western Australia.

“MinRes has become one of Australia’s most successful companies because of our ability to identify and act early on opportunities that benefit all of our shareholders,” said MD Chris Ellison.

“We started accumulating what is now the largest acreage position in the onshore Perth and Carnarvon Basins in 2015 with a clearly articulated strategy to lock in a low-cost, long-life energy supply for our operations. This strategy also aligns with MinRes’ pathway to reducing our carbon emissions by 50% by 2035 and net zero emissions by 2050.

“The significant conventional gas discovery we made at Lockyer Deep last year, which we believe may be the largest onshore gas find in Australia, is driving us to develop and commercialise this high-quality energy source as quickly as possible.

“The scrip-based offer for our JV partner Norwest will consolidate Lockyer Deep’s project ownership and provide Norwest Shareholders with exposure to a bigger prize. It is also a natural progression that can create lasting value for both groups of shareholders under the MinRes ownership umbrella,” said Ellison.

“This offer presents a compelling and unique opportunity for Norwest Shareholders to join the MinRes family and be part of the next chapter in our significant value creation.”

Norwest Energy director Iain Smith has urged shareholders not to take any action, saying the company was carefully considering the MinRes offer and would comment as soon as it had completed an assessment.