Vintage Energy Ltd (ASX:VEN) And Galilee Energy Limited (ASX:GLL) Enter Into Scheme Implementation Deed

(MENAFN- ABN Newswire)

Vintage energy Ltd (ASX:VEN) (Vintage) and Galilee Energy Limited (ASX:GLL) (Galilee) are pleased to announce they have entered into a binding scheme implementation deed (SID) under which Vintage will, subject to the satisfaction of various conditions precedent, acquire all of the fully paid ordinary shares in Galilee by way of a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (Scheme), as per the previous announcement to the ASX on 15 August 2024.
- Galilee Energy Limited ("Galilee") and Vintage Energy Ltd ("Vintage") have entered into a binding scheme implementation deed to merge by way of a scheme of arrangement ("Scheme"), under which Vintage will acquire 100% of the Galilee shares on issue.
- Galilee shareholders will receive two (2) fully paid ordinary shares in Vintage for every one (1) fully paid ordinary share in Galilee held on the record date for the Scheme.
- Upon implementation of the Scheme, existing Vintage and Galilee shareholders will hold approximately 60% and 40% of the Merged Group respectively.
- The Galilee Directors unanimously recommend the Scheme and intend to vote all Galilee shares that they hold or control in favour of the Scheme in the absence of a superior proposal for Galilee and subject to the Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of Galilee shareholders.
- The Vintage Directors unanimously support the Scheme in the absence of a superior proposal for Vintage.
- Scheme booklet providing information for shareholders being prepared for ASIC review prior to Galilee shareholder distribution.
Under the terms of the Scheme, eligible Galilee shareholders will receive two (2) fully paid ordinary shares in Vintage (Vintage Shares) for every one (1) fully paid ordinary share in Galilee (Galilee Shares) held on the record date for the Scheme.
If the Scheme is approved and implemented, Vintage and Galilee will form a merged group (Merged Group) whereby existing Vintage shareholders will hold approximately 60% and existing Galilee shareholders will hold 40% of issued share capital of the Merged Group.
The merger is being pursued to create a merged group better resourced to generate value from the favorable long-term outlook for onshore gas and oil in eastern Australia through greater financial strength, an expanded resource base and an enhanced portfolio.
Galilee's board of directors (Galilee Board) unanimously recommend the Scheme to Galilee shareholders and recommend that all Galilee shareholders vote in favour of the Scheme at the Scheme Meeting, in the absence of a superior proposal for Galilee and subject to the Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of Galilee shareholders.
Subject to those same qualifications, each Galilee director intends to vote, or cause to be voted, all Galilee shares in which they hold or control in favour of the Scheme at the Scheme Meeting.
Vintage's board of directors (Vintage Board) unanimously support the Scheme in the absence of a superior proposal for Vintage.
Galilee's Executive Chairman, Ray Shorrocks, commented:
"There is a huge opportunity emerging in Australia's east coast gas market. This merger is aimed at enabling the combined companies and their shareholders to take full advantage of this looming gas shortfall and the impact that will have on gas prices, margins and free cashflow generation."
Vintage Chairman, Reg Nelson, commented:
"Entry into the Scheme Implementation Deed announced today completes the next step in taking the GalileeVintage merger proposal to a reality and creating a stronger better resourced company for shareholders of both companies.
Events since the proposal's announcement in August have reinforced the merits of the merger. Vintage has increased its Proved and Probable Reserves by 45% and is preparing to commence production from a new well, Odin-2 . Forecasts of gas markets tightening as production from existing sources decline have been renewed.
The favourable market conditions we anticipated when listing Vintage 6 years ago are evident. The merger set out in the Deed will improve the outlook for shareholders of both companies to benefit from this environment.
Our team at Vintage is working to support the completion of the Scheme Booklet for consideration by Galilee shareholders and an affirmative vote at their meeting."
Strategic Rationale
- The merger creates a complementary portfolio of diversified oil and gas assets across each of the major onshore sedimentary basins in eastern Australia, providing optionality and risk diversification.
- The Merged Group will benefit from Vintage's revenue producing assets in the Cooper Basin in addition to prospective gas and conventional oil assets, including Galilee's highly prospective gas acreage, providing a platform to leverage the gas supply shortage in the east coast gas market for both near and long-term and further growth opportunities.
- The Merged Group will have a highly experienced board and management team with deep relationships in the oil and gas sector and capital markets as well as a proven track record in oil and gas exploration, appraisal and development and value creation through mergers and acquisitions.
- The Scheme provides Vintage Shareholders with exposure to a Merged Group with a stronger balance sheet and platform for growth.
Galilee shareholders should be aware there are a number of advantages, disadvantages and risks associated with the Scheme, details of which will be set out in the Scheme Booklet to be sent to Galilee shareholders in due course and which Galilee shareholders are encouraged to carefully read, including the Independent Expert's Report, in full once it is made available.
*To view more details and indicative timetable, please visit:
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