The Australian prospector behind divisive plans to drill for coalbed gas near Falkirk is set to be snapped up by London-based IGas after the two entities revealed a £117.1 million deal.
Dart Energy said the combination of the two firms would create a “market-leading” onshore group with more than a million acres of the UK under licence, including major resources like the Bowland shale basin in the north of England.
Shareholders, which include Australian coal miner New Hope Corporation, will be handed just over 30% over the newly-enlarged company as part of an agreement which values the whole at around £385m.
The deal comes at a premium of more than 40% to the price of stock in Dart at the previous day’s close.
Executives said the combination would enjoy increased scale and financial clout as it seeks to exploit the underground energy source.
A merged staff of 200 would be “ideally positioned” to lead a “new era” in the UK energy industry, they added.
“Success in the oil and gas business comes from scale, and the combination of Dart and IGas achieves that scale, creating a clear market leader with a vastly greater depth in terms of asset base, access to capital and operating capability all of which will be critical to achieving long-term success,” said Dart chief executive John McGoldrick.
“We believe this transaction is in the best interests of Dart shareholders both in terms of the immediate premium being achieved, and in terms of the ability to participate in the long-term value creation potential of the UK shale industry, which we consider will be one of the defining energy market stories of this century.”
IGas chief executive Andrew Austin said the agreement demonstrated his firm’s commitment to and confidence in the sector.
“This is a British success story establishing IGas as a key contributor to UK energy mix and security,” he said.
“The transaction further strengthens our position financially, operationally and also significantly increases our licensed acreage as we seek to unlock the untapped energy resource that exists in Britain.”
IGas already runs 110 onshore hydrocarbon sites in the UK, producing around 3,000 barrels of oil equivalent a day.
The company, which reported pre-tax losses of £6m for the 12 months to March 2013, also operates Britain’s only coal bed methane pilot site, near Warrington in Cheshire.
Dart which saw pre-tax losses including impairments hit A$136m during the year to June 2013 has 24 licences in the UK, with major farm-out agreements covering a total of 15 sites already in place with oil and gas majors GDF Suez and Total.
It said its project at Airth in the Forth Valley was “development ready” and could be productive by 2016, subject to the outcome of the ongoing planning appeal. Additional evidence sessions are expected later this summer, with a determination likely to come in the following months.
Dart also has interests in Australia, Germany, Belgium, Indonesia and India, all of which are expected to be sold in due course.
Shareholders are expected to vote on the plans in late August, with an Australian scheme of arrangement likely to be concluded in September.
Stock in IGas closed the session up almost 1% at 130.75p in London following an announcement which came after the close in Sydney.