88 Energy Limited (ASX: 88E; AIM: 88E) ("88 Energy"),  has made an off-market takeover offer to acquire the entire share capital, including listed options on issue, in XCD Energy Limited (ASX: XCD) ("XCD Energy") to be satisfied through the issue of: 

  • 1.67 new 88 Energy shares for every XCD Energy share held ("Share Offer"); and 

  • 0.5 new 88 Energy shares for every XCD Energy listed option held ("Option Offer"), 

XCD Energy is an ASX-listed public company, with a focus on exploration in the USA with a 100% working interest in 195,373 acres on the highly prospective North Slope of Alaska. 

For XCD shareholders, the share offer values XCD Energy at 1.0 cent each1, representing: 

  • 100% premium to the closing price of XCD Energy shares on ASX on 24 April 2020 of 0.5 cents; 

  • 120% premium to the 10-day VWAP of XCD Energy shares2 

  • 102% premium to 30-day VWAP of XCD Energy shares2 

  • 36% premium to 60-day VWAP of XCD Energy shares2 

  • Equal to XCD Energy's placement in October 2019 

If the transaction is completed, XCD security holders will hold up to 15% of the combined group.

Takeover Rationale 

The merger creates an Alaskan- focused oil explorer with a diversified portfolio of 3 key project areas across Project Icewine, Yukon Leases and Project Peregrine at various stages of project maturity. 

It also expands the management and technical team ‘with proven operational capability and a track record for delivering on project objectives’ together with access to an extensive network of global and Alaskan relationships - both business and technical.

Pre-Bid Acceptance Deeds 

88 Energy has entered a pre-bid acceptance deeds with major XCD Energy shareholders and listed option holders in respect of 18.5% of the XCD Energy shares and 6.8% of the XCD Energy listed options on issue.  

Pursuant to these deeds, the Shareholders have undertaken to accept the Proposed Offers, in the absence of a superior proposal. 

Shares in 88 Energy have suffered recently falling from 1.01p as of the 6 April to close last at 0.24p. 

88 Energy Managing Director, Mr David Wall, said the strategic merit for the combination is clear: "In a combined company, XCD Energy shareholders and listed option holders will be able to leverage from 88 Energy's geological and operational expertise, specific to the North Slope of Alaska, where we have drilled four wells as Operator and acquired several 2D and 3D seismic surveys over the last five years.  

This includes extensive technical knowledge of the regionally successful Brookian oil plays, in which 88 Energy retains significant upside exposure via its highly prospective portfolio of exploration/appraisal projects covering ~250,000 net acres (480,000 gross) co-located on the North Slope."