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Friday, 21 December 2012
Longreach Oil & Gas and APIC complete merger
Longreach Oil & Gas (CVE:LOI) and APIC Petroleum Corp (CVE:API) have completed their merger agreement, and announced the new board of directors going forward.
Under the terms, former shareholders of APIC are entitled to one share of Longreach for every 5.3846 APIC shares.
It is expected that the ordinary shares of APIC will be delisted from the TSX Venture Exchange today.
"We are delighted to formally complete the business combination with APIC and announce the ensuing Board for Longreach," said new Longreach CEO, Andrew Benitz.
Dennis A. Sharp, former chairman and CEO of APIC, has been appointed executive chairman of Longreach, while Andrew Benitz, former COO of Longreach, was appointed chief of Longreach.
Thomas Vukovich, former director of APIC, has been appointed to the Longreach board.
Bryan Benitz has resigned as CEO and chairman of Longreach, but will remain as vice chairman and non-executive director of the company, while Dr. Mahmoud Zizi has resigned as director and been appointed as an advisor to the new board.
"I would like to thank Dr. Zizi for his contributions to Longreach to date as an integral member of the team in the initial stages of development of our company and I am very pleased that he will continue to work with us in the capacity of advisor to the board," said new CEO Benitz.
"I welcome Thomas Vukovich to our board, who brings considerable commercial and investment experience to the team."
Last month, Longreach confirmed it will have three new blue-chip investors on its share register following the merger with APIC, which will bring in $30mln of new funds.
They are the bank Dundee (15.2%), West Face Capital (10.6%) and Blakeney (10.3%).
The cash will fund two wells on the SidiMoktar gas licence in Morocco with the Koba and Kamar prospects providing the first drill opportunities.
The former will be drilled into the upper Triassic sandstone known as T9-10, and puncturing the top of the lower lying Triassic T6 sandstone.
This will allow the group to determine the drill programme for the Kamar prospect, which will target T6 sandstone at an up-dip location.
The first well is expected to be spudded “late first quarter, early second” of next year. The wells are expected to take 60 days each and have a dry hole cost estimate of $10 million.
However, before the drill rig gets going, Longreach will acquire more 2D seismic that will further de-risk Koba and Kamar and convert other promising leads into drillable prospects.
In its third quarter results, the Morocco-focused explorer revealed it had ended September with C$6.2mln in cash (and C$5mln of working capital).
"The combination of Longreach and APIC creates a company with solid funding, significant planned operational activity and attractive assets in an area of the world that has good prospectivity and an attractive and supportive fiscal regime," said executive chairman Sharp.
"With our board and senior management now in place, our next objective will be the realization of our business strategy and the creation of shareholder value."