Drillsearch Energy looks at more deals in outback Australia
SYDNEY (Bloomberg) -- Drillsearch Energy Ltd., BG Group Plc’s exploration partner in central Australia, will study further acquisitions in the outback region after its proposed purchase of Ambassador Oil & Gas Ltd.
The company is looking at opportunities to add oil and gas acreage in the Cooper basin through its “Project Uber,” Brad Lingo, managing director of Sydney-based Drillsearch, said Aug. 27 in a phone interview. Its Ambassador offer in May follows an acquisition of Acer Energy Ltd. in 2012.
“We have some of the best rocks, but others have great rocks too,” Lingo said after the company reported a 59% gain in full-year profit. “Whether it’s at the asset level or corporate level, we’re going to be optimizing our portfolio.”
Drillsearch is among companies in the Cooper basin seeking to benefit from rising natural gas prices on Australia’s east coast. Drillsearch, which made a takeover offer for Ambassador valued in May at A$42 million ($39 million), has boosted its stake in the company to more than 60%, Lingo said.
“We are approaching a key inflection point” in the Cooper with explorers over the next six to 18 months demonstrating how much oil and gas they can produce, he said. “The work program to date has been good in demonstrating the presence of the resource and the prevalence of the resource.”
The basin, which has lured investments from Chevron Corp. and BG, is set for a flurry of mergers and acquisitions, explorer New Standard Energy Ltd. said in May. Drillsearch is a target itself, along with Beach Energy Ltd. and Senex Energy Ltd. Commonwealth Bank of Australia said in a January report.
Drillsearch declined 2.3% to close at A$1.495 in Sydney trading. Ambassador fell 1.5% to 32.5 cents per share, valuing the company at A$46 million.
Drillsearch’s takeover offer, accepted by Ambassador’s directors, values the target at 33.5 cents per share, according to a statement Aug. 26 from Ambassador. Magnum Hunter Resources Corp. earlier this month said it wouldn’t increase a rival offer, saying a delay in work at Ambassador’s Cooper basin permit lessened the attractiveness of an acquisition.