Electric Guitar (AIM:ELEG), the London-listed cash-shell, has taken an option to acquire Broadgate Midcon LLC’s 50% by-value share of operated upstream and midstream oil and gas assets in the Western Anadarko Basin for an exercise price not expected to exceed US$6 million plus a proportional share of the transaction debt.
The opportunity sits inside a wider Vega Upstream JV purchase of the Midcon Assets agreed for a base price of approximately US$14.9 million, to be financed by an institutional credit facility of approximately US$14 million and an equity contribution of US$1 million, Electric Guitar said in an announcement.
Vega Upstream JV paid a US$500,000 deposit on 28 April that will be applied at closing anticipated on or before 31 May with an effective date of 1 February, and Electric Guitar’s Broadgate Option is exercisable at its discretion until 31 July under an exclusivity period.
The Broadgate Assets comprise a 50% by-value interest in 28 operated natural gas, NGL and oil wells in Custer County with an average working interest of 49.4% and a defined portfolio of 58 horizontal drilling locations, with recent net production of c. 3.2 million cubic feet equivalent per day (533 boe/day) and c.58% of revenue from crude oil and liquids.
They also include a natural gas gathering system transporting approximately 4.4 million cubic feet per day across roughly four square miles to the sales point for a toll of USD 0.75 per thousand cubic feet.
The board said it will continue to pursue the previously announced Dunbar opportunity alongside Broadgate and that completion of any reverse takeover remains conditional on satisfactory due diligence, regulatory approvals, final documentation and shareholder consent while the company's shares remain suspended from trading.
