LONDON (Alliance News) - Doriemus PLC on Friday said it has acquired a 2.82% stake in Greenland Gas & Oil PLC, as well as an option to buy a further 60.56% of the UK-based oil and gas exploration company focused solely on Greenland.
Doriemus has agreed to invest GBP250,000 in cash on acquiring the initial stake in Greenland Gas & Oil, and, if it exercises the option over the further shareholding, would issue 22.01 of its own shares for each Greenland Gas & Oil share held by sellers. That would require the issue of 9.08 billion Doriemus shares, equivalent to 54% of its enlarged share capital after the issue.
Such a deal would value Greenland Gas & Oil at about GBP8.3 million. The option, which was agreed with ten shareholders in Greenland Gas & Oil, can be exercised at any time up to March 31.
Exercise of the option requires approval from Greenland Gas & Oil shareholders to convert into a private limited company, as well as consent from Doriemus' shareholders, and regulatory approval from the Government of Greenland where appropriate.
The acquisition of that stake would be classed as a reverse takeover under AIM rules. Shares in Doriemus have been suspended from trading.
According to Doriemus, Greenland Gas & Oil was in June granted oil exploration and exploitation licences over 4,200 square kilometres located onshore in south-eastern Greenland in a region known as the Jameson Land Basin.
Doriemus Chairman Donald Strang said the company sees the Jameson Land Basin as being one of the most prospective yet untested complete hydrocarbon basins to emerge in recent years.
"Acquiring this asset will complement the company's existing UK oil and gas interests in the Weald Basin," Strang said in a statement.
Strang said that view of the basin was "well supported" by the "extensive and comprehensive" historical work carried out by Atlantic Richfield Company between 1975 and 1990. He said that company invested about USD100 million in "detailed multi year exploration activities" during that time. The chairman also cited more recent work by the Geological survey of Denmark and Greenland that took place between 1991 and 2013.
"Both ARCO's and Nunaoil (Greenlandic state oil company) have identified multiple, very large conventional oil targets that will form the basis of GGO's future work programme in the region," Strang said.
"Through this option we have the opportunity to secure a first mover advantage into this highly prospective region via the opening up of onshore areas in Greenland in September last year. Our ability to secure this option provides shareholders a unique opportunity to gain early stage exposure to what is a highly prospective asset in a new and exciting large-scale hydrocarbon play," Strang added.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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