Global coal seam gas company Dart Energy Limited has agreed to acquire the 90% of Composite Energy Limited that it does not already own for approximately US$46.7 million. The consideration will be satisfied by way of issue of approximately 35.9 million new Dart shares to the current shareholders of Composite and the issue of approximately 5.6 million new Dart-J Class options to existing Composite optionholders (largely being Composite employees). The new Dart shares to be issued will represent approximately 6% of Dart's enlarged share capital.

This transaction represents an acceleration and replacement of the previous arrangement entered into in August 2010 whereby Dart had an option to inject US$5m into Composite in January 2011 for an additional 10% of Composite, and then an option to acquire the remaining 80% of Composite prior to June 2011 for US$56 million payable in Dart shares, or cash or a mix of both.

Dart's Chief Executive Officer, Mr Simon Potter, in announcing the transaction, said, 'The move to acquire 100% of Composite is a significant milestone for Dart.

Since becoming a 10% shareholder in Composite, we have had an opportunity to undertake a detailed review of Composite's existing assets and in particular the prospects for early commercialisation of the PEDL133 licence in Scotland. We have also been able to work alongside Composite to help them secure two high potential new licences in Poland and to further progress a number of other opportunities in their pipeline across continental Europe.

By moving to full ownership of Composite today, we are able to fully avail ourselves of the entry platform into the European CBM and shale gas industry that Composite represents by taking control of and full responsibility for the 2011 work programme.

Our immediate near-term focus at Composite in 2011 will be on deploying our technical expertise at PEDL133, where over the last few months we have designed a pilot programme along with an associated gas marketing scheme. We expect drilling to commence in the next six months, and we hope to have PEDL133 pilot gas flowing and commercialised within a year. We also expect to start drilling in Poland during 2011 and to engage in a reserves recertification and upgrade exercise across the Composite portfolio. Finally, we intend to continue looking for ways to maximise value across the entire Composite portfolio, and will actively seek to add new assets to the portfolio if strategically relevant and where we can add value through our global experience. Overall, the remaining 2011 work programme at Composite will see a total expenditure of approximately US$10 million.

We are delighted to welcome into the Dart group the Composite employee base. Composite’s staff have done a great job in creating and maintaining the current portfolio and bringing the assets to the current level of maturity and we look forward to fully integrating their skills and experience into the overall Dart business.

Our objective for Composite remains clear: to establish a basis for commercialisation of CBM resources in the UK and Europe by improving both cost performance and reservoir delivery in progressing Composite’s existing assets expeditiously to development, to build on that initial Composite platform so as to establish Dart as the CBM operator of scale in Europe and to further expand our shale gas exploitation competencies”.

Tags: Dart Energy Limited