UBS says Drillsearch Energy CEO departure could spur Beach...

UBS says Drillsearch Energy CEO departure could spur Beach Energy merger

• Street Talk
• Jul 6 2015 at 10:13 AM
• Updated 1 hr ago

• by
• Sarah Thompson
• Anthony Macdonald
• Jake Mitchell

UBS analysts say the departure of Drillsearch Energy chief executive Brad Lingo could be a pre-cursor to a merger with Cooper basin-rival Beach Energy.

Analyst Nik Burns points out that if the two companies merged, Lingo would likely lose his job, as Drillsearch is the smaller entity.

"We have said recently that, in our view, a merger between BPT (Beach) and DLS (Drillsearch) was increasingly likely; (the) announcement could mean this happens sooner rather than later," Burns said in a research note to client.

"If today's announcement is a precursor to a potential merger, we expect DLS shareholders would likely have preferred Mr Lingo to be at the helm to voice his support for any transaction."

Kerry Stokes' Seven Group holds 19.9 per cent of both companies and has been widely seen as a potential catalyst for a merger.

Drillsearch chief operating officer Walter Simpson has been appointed as acting chief executive while the company searches for a successor.