Vintage Energy (ASX: VEN) and Galilee Energy (ASX: GLL) have mutually agreed to terminate the scheme implementation deed (SID) that would have led to the merger of two significant Australian onshore gas developers.
Announced to the market in October, the SID would have seen Vintage’s Cooper Basin gas fields in South Australia and Queensland aligned with Galilee’s sizeable Queensland assets.
However, the two now believe that the original proposal was no longer in the best interests of either company’s shareholders and have been unable to agree on revised terms acceptable to both parties.
Vintage chair Reg Nelson noted that a number of outside changes to the gas market had occurred since the scheme was first proposed.
“Events since the proposal’s announcement have highlighted the latent value of uncommitted gas such as is held by Vintage and Galilee to help address shortfalls in supply to east coast Australia forecast from 2026 on,” he said.
“We are focusing our efforts on realising value for Vintage shareholders for the company’s gas and acreage and investigating some emerging opportunities.”
Galilee’s directors unanimously recommended the scheme in October and announced they intended to vote all Galilee shares that they held or controlled in its favour.
Under the proposal, Vintage would have acquired 100% of the Galilee shares, with Galilee shareholders receiving two shares in Vintage for every one share in Galilee held on the record date.
Upon implementation of the scheme, existing Vintage and Galilee shareholders would have respectively held approximately 60% and 40% of the merged group.
The companies initially proposed the merger to join what they regarded as complementary portfolios of diversified oil and gas assets across each of the major onshore sedimentary basins in eastern Australia.
The merged group expected to benefit from Vintage’s revenue producing assets in the Cooper Basin along with Galilee’s highly prospective gas acreage, providing a platform to leverage the gas supply shortage in the east coast gas market.
Each company highlighted the forecasts of tightening gas markets as production from existing sources declined and the opportunity that would provide to the merged entity.
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