Drillsearch makes $118m bid for oil and gas explorer Acer Energy...

Drillsearch makes $118m bid for oil and gas explorer Acer Energy

by: Ross Kelly
From: Dow Jones Newswires
October 05, 201212:00AM


DRILLSEARCH Energy yesterday made a $118 million bid for oil and gas explorer Acer Energy, the latest in a string of mergers between small energy companies vying to tap rising regional demand.

Drillsearch is offering 25.5c per Acer share, representing a 31 per cent premium to the stock's last trade of 19.5c.

Acer's largest shareholder, Singapore-based Republic Investment Management, has already sold a 19.9 per cent interest in Acer to Drillsearch and plans to sell its remaining 18.8 per cent holding into the offer.

Acer, which was formally known as Innamincka Petroleum, owns permits in the Cooper Basin energy hub, which straddles the borders of South Australia and Queensland. It also has exposure to onshore assets in NSW and holds an offshore permit in Bass Strait.

Australia is a net importer of liquid fuels and Acer has oil assets in the Cooper Basin's Western Flank, which has been brought to prominence by Beach Energy.

The Cooper Basin contains conventional gas assets that are dwindling following decades of development, but the region also has a vast untapped shale gas resource that could become commercially viable if domestic gas prices rise -- as they are expected to, due to increasing demand for cleaner fuels.

However, shale gas mining, or "fracking", is opposed by environmental groups concerned about the damage to rock structures.

Meanwhile, Central Petroleum this week formed a $150m joint venture with Santos Ltd to explore for gas in the Northern Territory. And in other recent deals, BG Group took a stake in some of Drillsearch's shale gas prospects, Beach bought fellow Cooper Basin producers Adelaide Energy and Impress Energy, while Cooper Energy acquired Somerton Energy.

Dow Jones Newswires