Life's a Beach for Goldman and UBS in Drillsearch camp Jul 7...

Life's a Beach for Goldman and UBS in Drillsearch camp

• Jul 7 2015 at 12:15 AM
• Updated Jul 7 2015 at 12:15 AM
• Sarah Thompson , Anthony Macdonald , Jake Mitchell

Drillsearch has brought UBS and Goldman Sachs into its camp, ahead of potential consolidation in South Australia's Cooper Basin.

Drillsearch has drafted UBS and Goldman Sachs into its camp, ahead of potential consolidation in South Australia's Cooper Basin.

Street Talk understands the Drillsearch board decided it was worthwhile having both investment banks on board, given some form of corporate activity in the oil and gas region appears inevitable.

Kerry Stokes' Seven Group owns 19.9 per cent of Drillsearch and its closest Cooper-rival Beach Energy. It appears the television, mining services and energy conglomerate plans to drive a merger of the two mid-sized oil and gas players, which would unlock significant synergies.

But sources close to Drillsearch said there were no corporate deals being worked on currently.

So in the meantime, UBS and Goldman are keeping themselves busy working on valuations for Drillsearch's assets and company strategy.

Drillsearch announced the sudden departure of former chief executive Brad Lingo last week. Chairman Jim McKerlie said at the time the company was reviewing its strategy of solely focusing on the Cooper and therefore needed a new boss as it looked to projects in "multiple jurisdictions."

UBS analyst Nik Burns and his team said in a research note to clients the departure could prove a precursor to a Beach merger. Burns pointed out that if the two companies merged, Lingo would likely lose his job, as Drillsearch is the smaller entity.

If Seven was to push for a merger, it would evoke memories of a merger between the Canadian-based Anatolia Minerals Development and Australian group Avoca Resources in 2010 to form the ASX- and Toronto-listed Alacer Gold Corp.

Pala Investments was the largest shareholder in Avoca and Anatolia before the deal and supported the merger, creating a $US2 billion ($2.6 billion) gold miner at the time.