Eden Energy (ASX: EDE) has executed a conditional agreement to sell its entire UK coal seam gas and shale gas portfolio to unlisted UK public company Shale Energy for £10 million (A$15.7 million).
This consists of a cash payment of £750,000 and £6 million in shares of Shale Energy, which is planning to list on the AIM market of the London Stock Exchange.
The £3.25 million balance will be payable in two equal tranches on the independently verified best estimate of recoverable gas of 500 billion cubic feet and secondly when the estimate reaches 1 trillion cubic feet.
The sale assets comprise Eden’s 50% joint venture interests in 17 Petroleum and Development Licences (PEDLs) in England and South Wales and its 100% interest in a further 3 PEDLs in South Wales.
These have unrisked P90 Resource volumes of shale gas in the Numurian Measures on 7 PEDLs in South Wales of 12.8Tcf of recoverable gas (Eden 6.35Tcf) and Best Estimate Gross Contingent Resources of coal seam gas in the 10 PEDLS in South Wales of 980Bcf of gas.
Shale Energy was incorporated to pursue shale gas opportunities and has been examining possible projects in the U.S. for the past few years.
The Heads of Terms is largely non-binding and is conditional upon a number of matters including Shale Energy completing a further capital raising of £5 million as a pre-introduction to listing on AIM.
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