anzon shareholders approve roc merger

From The Australian

Anzon shareholders approve ROC merger

By Rebecca Le May | September 03, 2008

ROC Oil is set to take control of Anzon Australia after getting the green light for its proposed merger from the target's largest shareholder, UK-based Anzon Energy Ltd (AEL).

Shareholders in AEL today voted at a meeting in Sydney overwhelmingly in favour of a merger with ROC, an oil and gas explorer and producer.

A scheme of arrangement must now be approved by the Federal Court, with a hearing scheduled for this Friday, for the merger to go ahead.

Assuming court approval is obtained, AEL is expected to lodge a copy of the court order with the Australian Securities & Investments Commission next Monday. ROC expects the scheme will be implemented by September 22.

AEL will become a wholly owned subsidiary of ROC, which will emerge with AEL's 53.1 per cent controlling interest in Anzon Australia.

The offer of 0.792 ROC shares plus five cents for each Anzon Australia share, values the target at about $356 million, and is due to close on October 6.

ROC acting chief executive Bruce Clement today told AAP that 99.9 per cent of AEL shareholders had voted in favour of the merger.

But Mr Clement said he had received no indications from Anzon Australia's second largest shareholder, Nexus Energy Ltd, as to whether it would accept the offer for its 19.4 per cent stake.

"There are no real big shareholders (among the remaining 30 per cent) but you can imagine that there are hedge funds in there now, taking positions in the stock because of the takeover,'' he said on the sidelines of the RIU Good Oil Conference in Fremantle.

Anzon Australia will release its target's statement on Monday and has not yet indicated whether it will recommend ROC's offer to its shareholders.

"I can't anticipate what they are going to say,'' Mr Clement said.

He said Anzon Australia had inhibited its growth with a complex ownership structure and its reliance on a 40 per cent stake in one project, the Anzon-operated Basker Manta Gummy joint venture in the Gippsland Basin off Victoria.

Nexus backed out of a proposed takeover for Anzon in May after disappointing results from the Basker 6 well.

"Being very much focused on one project means individual events have a big impact on the company,'' Mr Clement said.

"If they have an operational problem, it becomes a market issue.

"Whereas when you have a number of projects like ROC does, a single operational issue doesn't really have as big a material impact on the company.''

He said acquiring the project would bring additional oil production of 4,000 barrels per day to ROC, which currently produces 10,408 barrels of oil equivalent (BOE) per day.

The deal will more than double ROC's reserve base to 47 million to 50 million BOE and more than double production by 2010 to 20,000 BOE per day.

ROC, which has producing assets in Australia but is increasingly focused on China, values the Basker Manta Gummy project because it has exploration upside and will diversify the company's asset base.

"It's quite a prolific producing reservoir,'' Mr Clement said.

"It gives us a bigger production base, a bigger strength to do more business and grow the business in the future, but it also balances our portfolio and focuses more of our business back in Australia.''

He said ROC's valuation of Anzon Australia was based on a reserve figure for Basker Manta Gummy that was 10 per cent to 15 per cent lower than that defined by the target's independent expert.

"We do acknowledge there is significant possible reserve upside in this field.''

While Mr Clement said ROC had much on its plate, it continued to seek attractive acquisition opportunities and could consider divesting its small exposure to projects in Mauritania, but did not need to at present because its cash position was comfortable.

Anzon Australia shares closed down 1.5 cents at 94 cents while ROC shed two cents to $1.17.