Melbourne, June 24, 2008 AEST (ABN Newswire) - Marion increases 2P Gas reserves to 319 Bcf of gas following further acquisitions in Helper and Jester-Bloomington Projects: Purchase of USA assets from Odyssey Energy Limited (ASX:ODY)
Marion Energy Limited (ASX:MAE) is pleased to announce that it has entered into an agreement to acquire the interests of Odyssey Energy Limited (ASX: ODY) in the Helper and Jester-Bloomington projects, thereby increasing the Company's 2P gas reserve base by 29 Bcf to approximately 319 Bcf (billion cubic feet).
Marion will issue 27.5 million fully paid ordinary shares to Odyssey in consideration for the acquisition. These shares will be subject to a voluntary escrow period of 9 months. As a result of the transaction, Marion will increase its reserve base by 10%, but with only a 7% increase in shares on a fully diluted basis. The purchase will be consummated through the acquisition by Marion of Odyssey's US subsidiary.
The transaction is subject to approval by Odyssey shareholders with settlement expected to occur in the September 2008 Quarter.
Key benefits for Marion shareholders
The acquisition provides Marion with the following key benefits:
- Increase in Booked Gas Reserves
A 10% increase in 2P reserves, from 290 to approximately 319 Bcf, with further reserve additions anticipated at the Helper project (and the Clear Creek project as well) during 2008.
- Strengthening of Marion's Strategic Position
Following completion, Marion will own a strengthened and highly strategic portfolio of US gas development assets, representing an attractive footprint in Utah and Oklahoma, including:
- 100% working interest in the Clear Creek project in Utah;
- 100% working interest in the Helper project in Utah, including the newly discovered Morrison Formation, which was recently placed on production at a rate of 1.5 million cubic feet/day; and
- 100% working interest in the majority of the Jester-Bloomington project, Oklahoma (67% in other areas).
NOTE:
- On June 18, 2008 Marion announced to the ASX that it had engaged Goldman Sachs to explore strategic alternatives in order to ensure that shareholder value is maximised. The aggregation of interests in Helper and Oklahoma will simplify unlocking this value.
- On May 2, 2008 Marion announced to the ASX that it is exploring alternatives to best capture and monetize the value of its Oklahoma assets. In the event this process results in the divestment of the assets involved, the former Odyssey share of these assets will be included in the sale and the proceeds of the sale retained by Marion.
Commenting on the acquisition, Jeff Clarke, Marion's CEO said that "this is an excellent result for Marion. On a fully diluted basis, we have been able to increase our reserve base by 10%, but with only a 7% increase in shares.
Importantly for Marion we will now have a 100% interest in the Helper project which has a significant potential to deliver a large increase in reserves and shareholder value following our recent new discovery in the Morrison Formation."
Patersons Corporate Finance Limited acted as Marion Energy's merger and acquisitions adviser throughout the course of this transaction.
Contact
North American Contact:
Mr Jeff Clarke
Managing Director & CEO
Ph: +0011 214 244 7690
Email: jclarke@marionenergy.com
Australian Contact:
Mr Peter Collery
Executive Director and Company Secretary
Ph: 03 8862 6466
Email: peter@marionenergy.com.au
Patersons Corporate Finance Limited
Neil Doyle
Mobile: 0414 912 901
Email: Email: ndoyle@psl.com.au
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