ZOE.L Share News (ZOE)

Highlands Natural Resources, which floated on London's main market as a cash shell in March, is close to making its first acquisition and has bought a majority share of a 're-fracking' technology company.The company has agreed to buy a 75% stake in US-based Diversion Technologies for 1.9m of Highlands' shares and 30m warrants at 25p.Colorado-based Diversion has patents pending for a new diverter well stimulation technology for use in refracking, that is the fracking of existing wells to maximise recovery at much lower cost than drilling new wells. Similar technology is being developed by Halliburton and Schlumberger.Highlands, which is led by Robert Price, co-founder of US-based Palomar Natural Resources and a former advisory board member of AIM-listed San Leon Energy, also said its discussions regarding the acquisition of a first production asset in the US oil and gas sector were "advanced".Price, who also announced the apppointment of Halliburton's marketing director of completion technology Clay Terry to Highlands' advisory board, said he was working hard to complete the production acquisition as soon as practicable but was delighted to have entered the "potentially transformational" deal to acquire the Diversion Technologies pending patents and rights to any future patents."Considering the potential upside available if the technology proves successful, and the low capex required to roll out this type of business, which has a royalty-based revenue structure, we believe this is an opportunity too good to miss."Cenkos oil and gas analyst Ashley Kelty said the company's exposure to this new technology "looks very exciting (it's been a big focus in the US of late) and the deal structure makes it low risk".