ProActive Investors UK
by Jamie Ashcroft
The new Longreach plans to drill the Sidi Moktar project next year
Longreach Oil and Gas (CVE:LOI) told investors that it has agreed a merger with APIC Petroleum (CVE:API).
Chief executive Brian Benitz says the deal brings together two highly capable and compatible management teams, as well as providing the necessary funds for a ‘very exciting’ drill programme next year on the Sidi Moktar acreage, onshore Morocco.
APIC, which also has assets in Albania, has a stated strategy to seek and acquire new projects. It will carry out a $30 mln share placing prior to the merger to help capitalise the enlarged explorer.
“This is an exciting time for the shareholders of both APIC and Longreach as we take a very important step towards building a technically innovative and well capitalized oil and gas exploration company,” said APIC chief executive Dennis Sharp.
“The successful completion of this merger will position the combined company to advance its Moroccan properties and deliver both near and long-term value to its shareholders”.
Sharp will be appointed chairman of the new company, which will keep the Longreach name, while Andrew Benitz will be the chief executive.
The deal follows recent farm-out deals which saw Longreach de-risk its financial commitments for its offshore acreage. This capitalised on the company’s first mover advantage and its prior work on early stage exploration which identified drill targets.
“Since inception, Longreach has developed a diversified portfolio of licences in Morocco, carefully selected with first mover advantages,” Benitz said today.
“Our plan from the start has been to work towards addressing Morocco’s energy needs and this [merger] takes us a step closer to achieving that goal. We remain committed to our country focus, which we believe to be in the best interests of our shareholders.”
APIC shareholders will receive one Longreach common share for every 5.3846 APIC shares held. The transaction is expected to close in November.
