(Alliance News) - Baron Oil PLC has agreed a merger with Singapore exploration & production firm SundaGas Pte Ltd, it said on Thursday.
The transaction is considered a reverse takeover under AIM rules, so shares in Baron Oil have been suspended from trading in London.
Baron is to issue two of its own shares for every one SundaGas share held by SundaGas's shareholders, creating a new company in which Baron shareholders will own 33% and SundaGas's the rest. The combined company will be called SundaGas PLC.
Baron Executive Chair Malcolm Butler said: "The SundaGas team brings impressive management and technical expertise in south-east Asia and it makes sense for us to combine forces with them. The Chuditch production sharing contract has the potential to contain a substantial gas accumulation and is an asset of significant value.
"This proposed transaction will be transformational for our shareholders and we look forward to reporting back on progress in due course."
SundaGas has two main assets: the Chuditch production sharing contract off the coast of Timor-Leste, and the Telen block of the coast of Indonesia.
Baron has interests in two UK North Sea blocks, Wick and Colter, as well as an exploration asset in Peru and an existing partnership with SundaGas in which the two have been looking at new licences.
By George Collard; georgecollard@alliancenews.com
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Baron Oil (BOIL)