Westmount to vote for Eco Atlantic's proposed acquisition of JHI

(Sharecast News) - Westmount Energy said on Tuesday that it intended to vote in favour of Eco Atlantic Oil & Gas's proposed acquisition of JHI Associates, in which Westmount is a longstanding shareholder.

The AIM-traded oil and gas investing company said it had received the shareholder circular from JHI relating to the transaction, which values JHI at about £62.2m, or $88.5m, based on Eco's AIM closing mid-market share price of 65p on 1 May.

Under the proposed acquisition, Eco would acquire the issued and to be issued JHI shares it did not already own using an exchange ratio of 0.7054 Eco common shares for each JHI share.

On completion, Eco would issue up to 96,307,811 new common shares, leaving JHI shareholders with up to about 21.8% of Eco's enlarged issued share capital.

Completion remained subject to several conditions, including approval by two-thirds of the votes cast by JHI shareholders at an annual and special meeting scheduled for 12 May.

Eco had reported that shareholders representing about 60% of JHI's issued share capital had already entered voting support agreements in favour of the acquisition.

Westmount said it had accumulated most of its JHI stake through a placing, grey market cash share purchases and share swaps between December 2016 and January 2021.

The company said its board welcomed the transaction, which it believed represented a significant growth opportunity for JHI, with potential synergies and cost savings across an enlarged portfolio, while improving the liquidity of Westmount's holding.

JHI is a private Ontario-registered company focused on oil exploration in the Guyana-Suriname and North Falklands basins.

It holds a 17.5% working interest in the Canje Block offshore Guyana and a 35% working interest in the PL001 licence offshore the Falklands.]

Eco is listed on AIM and the TSX Venture Exchange and has assets offshore Guyana, Namibia and South Africa, as well as a strategic partnership with Navitas Petroleum.

Westmount said the acquisition would give JHI shareholders exposure to a diversified exploration and appraisal portfolio across the South Atlantic Margin, including the Orange Basin, Guyana Basin and North Falklands Basin.

It said JHI shareholders would also gain access to pre-funded high-impact drilling opportunities in Block 3B/4B offshore South Africa, the Orinduik Block offshore Guyana and Licence PL001 offshore the Falklands.

The company also highlighted Eco's strategic partnership with Navitas, announced in December, which it said could enhance operational capacity and funding support for work programmes and new ventures through embedded option arrangements.

Westmount said Eco's recently announced farm-down to BP of a 60% participating interest and operatorship in three Walvis Basin licences offshore Namibia also offered a significant growth opportunity, providing funded work programmes while retaining material exposure and potential for carried deepwater drilling on each of the three licences.

At 1057 BST, shares in Westmount Energy were up 15.73% at 4.34p.

Reporting by Josh White for Sharecast.com.

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