Ambassador Oil and Gas Limited announced to the ASX on 5 August that it had entered into a binding Heads of Agreement (HOA) with Outback Energy Hunter Pty Ltd to negotiate a farm out of a 70% share of its highly prospective PEL 570 in the South Australian Cooper basin.
As outlined in the HOA, the farm out is conditional upon Outback Energy Hunter subscribing for a maximum of $9.1 million worth of shares in Ambassador at a subscription price 25 cents, a significant premium to its recent share price, and Outback Energy Hunter finalising their financing.
The HOA provides for either Ambassador or Outback Energy Hunter the right to terminate the agreement if the conditions precedents (CP’s) are not satisfied or waived by 1 November 2013.
Drafting of the farm in and associated documentation is well advanced and Outback Energy Hunter has advised that they have made significant progress towards satisfying the key CP’s. However, whilst Outback Energy Hunter has advised that they have made progress toward the satisfaction of the CP’s, they have requested an extension to the timeframe required to satisfy the CP’s.
Ambassador continues to work with Outback Energy Hunter to ascertain the timeframe required to achieve the CP’s and to consider whether this timeframe is acceptable to Ambassador.
AQO Price at posting:
18.5¢ Sentiment: ST Buy Disclosure: Held
