Target sells stake in Fairway project
PERTH (miningweekly.com) – US-focused oil and gas producer Target Energy has signed a A$6.5-million deal with Victor Energy Corporation to divest of a 10% interest in its 60%-held Fairway project, in West Texas.
Target MD Laurence Roe said on Thursday that the transaction was a successful outcome for the company, not only strengthening its financial position, but also indicating that the value of Fairway materially exceeded the company’s present market capitalisation.
He pointed out that Target would realise a premium of around 72% on the sale of the interest, relative to the current implied market valuation of Target.
Following the sale of the interest, Target would remain the largest interest holder in the project, retaining a 50% share in all leases, apart from the Wagga Wagga lease, in which it has a 35% shareholding.
Roe told shareholders that the majority of the funds from the sale would be used to finance ongoing drilling at Fairway, as well as to pursue new opportunities.
“Target’s growth outlook is excellent and this sale helps ensure our future is well funded.”
The transaction was subject to the prior approval from Target’s 2014 convertible notes, and on the completion of a due diligence and the signing of a sale and purchase agreement.
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