Vintage Energy Ltd Stock Market Press Releases and Company Profile
Galilee Energy and Vintage Energy Merger Heads of Agreement
Galilee Energy and Vintage Energy Merger Heads of Agreement

Melbourne, Aug 15, 2024 AEST (ABN Newswire) - Vintage Energy Ltd (googlechartASX: VEN) (Vintage) and Galilee Energy Limited (googlechartASX: GLL) (Galilee) announce they have entered into a binding Heads of Agreement (HoA) under which Vintage will, subject to the satisfaction of various conditions, acquire all of the fully paid ordinary shares in Galilee by way of a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (Scheme).

- Vintage Energy ("Vintage") and Galilee Energy ("Galilee") have signed a Heads of Agreement with key terms for a merger via a scheme of arrangement

- Proposed merger to be effected by Vintage acquisition of 100% of Galilee via an all-scrip deal

- Merger creates a better equipped company for gas supply to eastern Australia in the near and long term

- Combined group to have existing appraisal gas production, 2P reserves of ~50 PJ and long-term sales contracts plus the large unconventional ~2,500 PJ 2C Glenaras gas resource

- Stronger balance sheet created by merger supports advancement of projects currently supplying gas

- Merged acreage portfolio encompasses most onshore sedimentary basins currently, or expected to, supply gas to eastern Australia

- The Galilee board unanimously recommends the proposal, in the absence of a superior proposal and subject to being satisfied with its due diligence enquiries and an independent expert concluding (and continuing to conclude) that the scheme of arrangement is in the best interests of Galilee shareholders

- The Vintage board unanimously supports the proposal, subject to Vintage being satisfied with its due diligence enquiries and in the absence of a superior proposal involving Vintage

- Galilee raising A$2.66 million via a fully underwritten placement and entitlement offer

The proposal will create a merged group better resourced to generate value from the favorable long-term outlook for onshore gas and oil in eastern Australia through greater financial strength, an expanded resource base and an enhanced portfolio.

In particular, the merger would marry Vintage's existing Cooper Basin gas supply and 2P gas reserves with the long-term potential of Galilee's substantial contingent resource exceeding 2,500 PJ, armed with a stronger balance sheet and superior cost structure. The increased cash resources created by the merger are expected to yield near-term benefits through a strong and focused progression of the Odin and Vali gas projects as a priority, both of which are currently supplying gas under longterm contracts.

The boards of the two companies have directed the preparation of a Scheme Implementation Deed to be expedited, together with other relevant material for agreement between the parties and Galilee shareholder consideration and approval.

Galilee Executive Chairman, Ray Shorrocks said:

"There is a huge opportunity emerging in Australia's east coast gas market. This merger is aimed at enabling the combined companies and their shareholders to take full advantage of this looming gas shortfall and the impact that will have on gas prices, margins and free cashflow generation.

"It will also provide long-term growth potential and access to funding".

Vintage Chairman, Reg Nelson said:

"The merger will create a company with much greater exposure to east coast gas supply in the near and long term and a stronger balance sheet.

"For Vintage shareholders, it means their company will be better equipped to grow production and revenue from the appraisal of the Odin and Vali gas fields. In addition, our long-term prospects will be enhanced through addition of Galilee's substantial gas resources.

There is clear complementarity in the Vintage and Galilee acreage holdings. Their combination will result in a portfolio encompassing nearly all of the onshore sedimentary basins currently supplying, or expected to supply, gas to eastern Australia such as the Cooper, Bowen, Surat, Otway and Bonaparte Basins.

"We are looking forward to working with the Galilee team to take the Heads of Agreement to a scheme of arrangement for shareholder action at the earliest opportunity."

Proposed transaction

The HoA provides that Vintage will acquire 100% of Galilee shares on issue post the capital raising announced by Galilee today. Under the Scheme, Galilee shareholders will receive two fully paid ordinary shares in Vintage for every one fully paid ordinary Galilee share held on the Scheme record date.

The 100% scrip scheme consideration implies a share price of $0.02 for Galilee based on the closing price of Vintage shares of $0.01 on 12 August 2024, the last day both companies traded on the ASX prior to Galilee entering a trading halt. This represents:

- a 5% premium to the last close share price of Galilee of $0.019 (as at 12 August 2024);

- a 6.6% discount based on Galilee's 10 -day VWAP to 12 August 2024 of $0.0196 compared to Vintage's 10-day VWAP to 12 August 2024 of $0.00915

- a 12% discount based on Galilee's 30-day VWAP of $0.0215 to 12 August 2024 compared to Vintage's 30-day VWAP to 12 August 2024 of $0.00946

Vintage's closing share price on the last trading day before this announcement was $0.009.

Upon implementation of the Scheme, Vintage and Galilee shareholders will hold approximately 60.2% and 39.8% of the Merged Group respectively, calculated using Galilee shares on issue post- capital raising.

Under the HoA, the merger is conditional upon Galilee completing a $2.5 million capital raising announced today. The capital raising is scheduled for completion on 20 September 2024.

The HoA also provides for an initial seven-week period for both Vintage and Galilee to conduct due diligence and finalise the terms of the Scheme Implementation Deed as part of an overall six-month exclusivity period. During the exclusivity period customary exclusivity restrictions apply, including "no shop", "no talk", "no due diligence" and "notification" obligations apply to both parties. In certain circumstances, including if a party breaches certain exclusivity restrictions, a party is liable to pay a fee of $250,000 to reimburse the other party's incurred due diligence costs. A summary of the binding exclusivity terms and cost reimbursement arrangements is attached to this announcement.

Board intention

The board of Galilee intend to unanimously recommend that Galilee shareholders vote in favour of the Scheme, (and will vote their shares in favour of the Scheme), subject to entry into an acceptable Scheme Implementation Deed, no superior proposal being received and an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of shareholders.

The board of Vintage unanimously supports the Scheme, subject to Vintage being satisfied with its due diligence enquiries and in the absence of a superior proposal involving Vintage.

Pathway to shareholder consideration and approval

A Scheme Implementation Deed will now be prepared and agreed by the parties. Documents for the scheme of arrangement together with other relevant material, will be dispatched to Galilee shareholders for shareholder consideration and approval.

The Proposed Transaction will be implemented by way of a scheme of arrangement to be proposed in the Scheme Implementation Deed pursuant to Part 5.1 of the Corporations Act 2001 (Cth) (Corporations Act) whereby Vintage is to provide two Vintage shares for every one Galilee share, for all Galilee shares on issue as at the record date of the Scheme.

Implementation of the Scheme will be subject to various conditions, including:

- The parties completing legal and financial due diligence in relation to the Proposed Transaction to their reasonable satisfaction;

- Galilee raising at least $2.5 million via an equity capital raising;

- Finalisation and execution of a Scheme Implementation Deed and any other documents required to give effect to the Proposed Transaction;

- No Galilee or Vintage Material Adverse Change or Prescribed Occurrence occurring (each as defined in the HoA); and

- All regulatory and/or third-party approvals being obtained (if required).

In addition, implementation of the Scheme will be dependent on:

- An Independent Expert's Report concluding the Scheme is in the best interests of Galilee shareholders and not withdrawing or adversely changing that conclusion;

- Galilee shareholder approval of the Scheme by the requisite majorities under the Corporations Act at a Scheme Meeting expected to be held in the coming months; and

- Court approval of the Scheme.

The Scheme Implementation Deed to be prepared will contain customary provisions and contain full details of the terms and conditions of the proposed scheme of arrangement.

Next steps

At this stage, Galilee shareholders do not need to take any action. Galilee will continue to keep shareholders, and the market informed of developments associated with the Proposed Transaction in accordance with its continuous disclosure obligations. Please refer to the Equity Raising announcement released today on the ASX for further information regarding the fully underwritten A$2.66m equity raising Galilee has undertaken.

To view the Merger Presentation, please visit:
https://www.abnnewswire.net/lnk/IAK4262X



About Vintage Energy Ltd

Vintage Energy LtdVintage Energy Ltd (ASX:VEN) has been established to acquire, explore and develop energy assets principally within, but not limited to, Australia, to take advantage of a generally favourable energy pricing outlook.

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Contact

Galilee:
Ray Shorrocks
Executive Chairman
+61 [07] 3177 9970

Vintage:
Don Murchland
Investor Relations Advisor
+61 439 300 932



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