Entek’s only other acreage is a 28.15% stake in the Glenvale/Coolum block in Beach Petroleum's ATP 269P lease in southwest Queensland.
Entek will receive $1.5 million in cash from Impress, as well as 35 million Impress ordinary shares and 5 million options exercisable into ordinary shares at 8 cents within two years.
The agreement, subject to approval by Entek shareholders and relevant South Australian government and joint venture approvals, looks very much like part of a move to wind up the company. Entek called a trading halt this morning and is due to make an announcement on or before this Friday.
Entek's Cooper Basin licence areas cover 16,850 square kilometres and include the recent Mirage and Ventura oil discoveries situated on PEL 115, which presently produce a combined 300-350 barrels of oil per day. This is expected to rise to 400-450 barrels per day when Mirage is placed on pump later this month, according to Impress.
“Importantly, the acquisition will significantly boost Impress’ present interest in the specified licences from 27.5% to 40% – equal to that of the current largest shareholder and operator of the permit area,” said Impress managing director Douglas Jendry.
“With the combined oil production from the Mirage/Ventura oil field anticipated to be in excess of 1000 barrels per day following development drilling in early 2006, you only have to do the numbers to see the type of immediate impact this deal has on the company’s bottom line.”
The deal also positioned Impress for future consolidation in the Cooper Basin, according to Jendry.
“With the current Cooper Basin exploration success rate around 40% and a significant exploration programme planned for three of the PELs in the next year, we are now also strongly positioned for long-term organic success as well as any future consolidation in the Basin,” he said.
Entek Energy is the most prominent in a stable of companies set up by Adelaide businessman Joe Mercorella.
The Australian Securities and Investments Commission has alleged Mercorella has been operating a scheme in breach of the Corporations Act since at least 2002 and owes investors up to $56 million.
Mercorella has denied any wrongdoing and said the money was safe. But the Federal Court has appointed a liquidator – Colin Nicol of McGrathNicol+Partners – to wind up 10 companies that formed part of the complex Mercorella scheme.
While Entek and Lion Energy were not among these companies, McGrathNicol+Partners partner Sam Davies has said the scheme liabilities, including third party advances in exchange for security over real property, could total as much as $66 million.
"Significant investigative work has been undertaken to reconstruct the Mercorella bank accounts, which has identified a number of assets including property, motor vehicles, shares in listed and unlisted companies, and other bank accounts," Davies said.
Following this deal partners in PEL 115 and the Mirage/Venture development will be Victoria Petroleum (operator) 40%, Impress Ventures 20% and Roma Petroleum 20%.
