Wednesday, 19 December 2012

Longreach Oil & Gas receives final order for APIC merger

Longreach Oil & Gas (CVE:LOI) confirmed Wednesday that it has received a final court order from the Royal Court of Jersey, Channel Islands regarding its merger with APIC Petroleum (CVE:API). 
Trading in shares of APIC have been halted pending closing of the deal, which is expected tomorrow. 
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).

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