Getting landowners to sign new leases would be a monster operation. A quick glance at the RRC well permits provides a glimpse of the complexity of the underlying land interests involved.
I don't know the US legal position but I would hope that the TXN company that holds the lease interests could grant the relevant subleases to a new company set up for the purpose, which would be the one sold.
However, if TXN pursues the suggested proposal of a tax efficient realisation of value for shareholders, then the sequence of events (if Aus tax regs can be satisfied) would be to create the new subleases in Newco, distribute the shares in Newco to shareholders and then arrange for the purchaser to buy Newco shares directly from TXN shareholders (in reality, a trustee might be set up to receive the Newco shares on behalf of TXN shareholders for sale to the purchaser).
The grant of the subleases to an Australian Newco might have US tax consequences.
I don't know that it can be done (although Newco would not have bare land interests - it would have the current EFS business because there is production from the EFS) but TXN's presentations suggest that kind of structure.
If that is not complicated enough, TXN does not have a 100% WI in all of the EFS leases.
If the structure for the disposal is that speculated, there will be significant 'due diligence' to be done and a tax clearance to be obtained. The directors might need shareholder consent.
The purchaser would also have to be satisfied that TXN would not 'steal' EFS gas & oil when it drills and fraccs the Austin Chalk. In this respect, AUT has suggested that the EFS/Austin Chalk is a continuum - where does one end and the other begin?
They may have to do something simpler.
TXN Price at posting:
47.5¢ Sentiment: Hold Disclosure: Held
