Strategic Acquisition to Transform Falcon Oil & Gas Ltd.
A Major Development for Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd.
Tamboran to acquire Falcon Oil & Gas Ltd. to create a vast Beetaloo Basin business
Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) has recently announced a pivotal agreement with Tamboran Resources Corporation (NYSE: TBN, ASX: TBN). This strategic move will unite their operations and span approximately 2.9 million net prospective acres in the Beetaloo depocenter.
Transaction Highlights
The agreement marks a significant step for both companies in the oil and gas sector. By merging, they will create a larger entity with a pro forma market capitalization exceeding US$500 million. Under the terms of this agreement, Tamboran will acquire Falcon along with its subsidiaries, offering 6,537,503 shares of Tamboran Common Stock and US$23.7 million in cash consideration.
Significant Shareholder Implications
Following the completion of the transaction, Falcon intends to distribute Tamboran shares to its eligible shareholders at an exchange ratio of approximately 0.00687 shares for each Falcon common share. This means current Falcon shareholders are expected to retain around 26.8% of the combined business, significantly increasing their stake in a larger, more resource-rich company.
Valuation Insights
This transaction values Falcon’s subsidiaries at C$239 million, representing a 19.7% premium over its latest trading price. Such a premium highlights the growing confidence in the assets associated with the Beetaloo Basin, especially amidst fluctuating market conditions.
Strategic Benefits of the Acquisition
The merger aims to bolster Tamboran’s operational foothold within the Phase 2 Development Area, increasing their working interest to 80.62%. This strategic alignment will also enhance collaboration with Daly Waters Energy, LP, paving the way for more efficient and effective management of their expansive acreage.
Leadership Insights
Philip O'Quigley, Chief Executive Officer of Falcon, expressed enthusiasm about this merger, emphasizing that it will place Falcon’s interests directly in alignment with Tamboran's operational strategies. He stated, "This transaction brings Falcon’s shareholders’ interests in the Beetaloo directly to the centre of operations... removing any uncertainty around Falcon’s participation in the farmout of the Phase 2 Development Area."
Moreover, Richard Stoneburner, Chairman and Interim CEO of Tamboran, acknowledged the strategic sensibility of this consolidation, indicating it fortifies their presence across the Beetaloo depocenter after previous checkerboarding processes.
Completion Timeline and Future Plans
The transaction is anticipated to close in the first quarter of 2026, contingent upon satisfying all closing conditions. This includes securing approval from shareholders of both companies, which is a standard procedure in such significant dealings.
Post-merger, the entire board of Falcon will step down, transitioning leadership to Tamboran, ensuring stability and continuity as the merger unfolds.
About the Companies Involved
Falcon Oil & Gas Ltd. is an international exploration company with a focus on unconventional oil and gas assets, particularly in Australia. Headquartered in Dublin, Ireland, its subsidiary, Falcon Oil & Gas Australia Limited, plays a vital role in its operations.
Tamboran Resources Corporation is recognized as the largest acreage holder in the Beetaloo Sub-basin, with a diversified portfolio encompassing significant interests in various projects, demonstrating their commitment to sustainable and responsible development in the region.
Frequently Asked Questions
What is the significance of the acquisition between Falcon and Tamboran?
The acquisition creates a large-scale operation in the Beetaloo Basin, enhancing market capitalization and resources while benefiting stakeholders integrated into a stronger entity.
How will Falcon shareholders benefit from this transaction?
Falcon shareholders will receive shares in Tamboran, ensuring they maintain a significant stake in the newly formed company, which is expected to thrive in the Beetaloo Basin.
When is the transaction expected to close?
The deal is projected to finalize by the first quarter of 2026, subject to necessary approvals and completion criteria.
Who will lead the combined company after the acquisition?
Management of Tamboran will continue to run the combined company, with Dick Stoneburner as Chairman and Interim CEO.
What were the past financial performances of Falcon’s subsidiaries?
The subsidiaries have reported a loss of US$2.2 million over the last year and hold total assets of US$60.7 million, reflecting the challenges faced prior to the merger.
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