Published On: Sun, May 10th, 2020

88 Energy, XCD Energy announce merger to create Alaska-focused oil company

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88 Energy acquisition of XCD Energy : Australian energy companies 88 Energy and XCD Energy have finally agreed to merge in an all-stock transaction to establish an oil company focused on the North Slope in Alaska, US.

Presently, 88 Energy has operations in most of the Project Icewine, which is spread over nearly 480,000 acres.

XCD Energy has a 100% working stake in an acreage of 149,590 acres in the North Slope, with proximity to existing exploration and appraisal operations. Besides, XCD Energy is targeting the Nanushuk and Torok oil plays in the North Slope.

88 Energy is acquiring XCD Energy with a goal to establish a diversified portfolio comprising three major project areas in Alaska in the form of Project Icewine, Project Peregrine, and Yukon Leases. Al the three oil projects in Alaska are currently at different stages of project maturity.

Commenting on 88 Energy acquisition of XCD Energy, – 88 Energy managing director said: “In a combined company, XCD Energy shareholders and listed option holders will be able to leverage from 88 Energy’s geological and operational expertise, specific to the North Slope of Alaska, where we have drilled four wells as Operator, safely and within budget, and acquired several 2D and 3D seismic surveys over the last five years.

“This includes extensive technical knowledge of the regionally successful Brookian oil plays, in which 88 Energy retains significant upside exposure via its highly prospective portfolio of exploration/appraisal projects covering ~330,000 net acres (480,000 gross) co-located on the North Slope.

“88 Energy’s Board is confident that merging the assets of 88 Energy and XCD Energy, combined with the potential upside offered, places the combined group in a strong position to fill the growing investment void in the ASX / AIM listed oil and gas sector.”

88 Energy acquisition of XCD Energy

88 Energy acquisition of XCD Energy. Photo courtesy of drpepperscott230 from Pixabay.

The all-stock deal calls for the exchange of 2.4 new 88 Energy’s shares for every shares of XCD Energy plus the exchange of 0.7 new shares of the former for every listed option held by the latter. This will translate to a stake of about 20% for XCD Energy’s original shareholders in the combined oil company.

Peter Stickland – XCD Energy Chairman, commenting on 88 Energy acquisition of XCD Energy, said: “In addition to a significant premium, the transaction provides XCD Energy shareholders with the opportunity to become shareholders of a company with significantly increased scale and demonstrated operational capability that is focussed on the world class oil potential of the North Slope of Alaska.

“It allows our shareholders to continue to have a material interest in the upside associated with the Brookian oil plays, while mitigating and diversifying the subsurface and execution exploration risks.

“The XCD Energy Board believes that this transaction is in the best interests of XCD Energy and unanimously recommends it to our shareholders, in the absence of a superior proposal and subject to the independent expert concluding that the offer is fair and reasonable, or not fair but reasonable.”

88 Energy has engaged Longreach Capital as corporate adviser and Steinepreis Paganin as the legal adviser for the transaction. XCD Energy, on the other hand, has Taylor Collison as its corporate adviser and GTP Legal as the legal adviser for the deal.

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