Ecofin Water & Power Opportunities (EW&PO) has entered into a binding agreement to sell its 81.1 per cent holding in Ecofin Energy Resources (EER) for new shares in Amadeus Energy.
EER is EW&PO’s largest investment and is active in US unconventional oil and gas production through its Texas based wholly-owned subsidiary Lonestar Resources.
Amadeus is an Australian oil and gas company listed on the Australian Stock Exchange with virtually all of its assets in Texas. Amadeus will acquire 100 per cent of EER’s capital for newly issued shares. Following completion of the transaction, Amadeus will change its name to Lonestar Resources. EW&PO will own approximately 54 per cent of the new Lonestar and will appoint three directors to its board.
The combination will create a leading ASX-listed mid-cap oil and gas company with a portfolio of US onshore conventional and unconventional assets, including material exposure to the Eagle Ford and Barnett shales in Texas, as well as acreage prospective for the Bakken / Three Forks formations in the Williston Basin, Montana.
The transaction, which is recommended by the board of directors of Amadeus, is subject to the approval of Amadeus shareholders and is expected to be completed in early December. EW&PO sees this as a transformational deal for the US shale business developed by Ecofin and majority funded by EW&PO since EER’s inception in 2010.
Bernard Lambilliotte, Ecofin’s chief investment officer, says: “Thanks to EW&PO’s support, Lonestar now has an enviable position in the most exciting unconventional oil and gas play in the US. Combining with Amadeus will enable the enlarged group to take advantage of attractive opportunities to embark on an accelerated growth profile, without taking undue risk. EW&PO is well positioned to participate in the next leg of value creation from the strengthened business platform that this merger brings.”
Amadeus chairman Craig Coleman says: “We are delighted to announce this exciting transaction, which combines Amadeus’ low-risk conventional oil and gas portfolio and strong balance sheet, with Lonestar’s high growth unconventional assets focused on the Eagle Ford Shale. Lonestar’s US-based management team brings extensive technical, operational and financial experience in running successful US oil and gas businesses in North America’s most established energy basins with a growth focus on the Eagle Ford Shale.”
