Amadeus Energy has announced a merger deal with UK-based Ecofin Energy, owners of Texas-based Lonestar Resources.
The merged entity will be known as Lonestar Resources, and will be listed on the Australian Securities Exchange, subject to shareholder approval.
Under terms of the deal, Amadeus will issue up to 500 million shares to Ecofin and Lonestar senior executives as consideration for the transaction.
Amadeus shares finished up 4.2 per cent on the ASX today, trading at 24.5 cents.
Post merger, Amadeus shareholders will hold 32 per cent of the new company, with Ecofin stockholders taking the balance.
Lonestar chief executive Frank Bracken will assume the role of managing director at the new company post merger, while Craig Coleman will continue as chairman.
The company will hold a large portfolio of oil and gas assets in the US, including the highly prospective Eagle Ford and Barnett shale gas fields in Texas, as well as prospective acreage in Montana's Williston Basin.
"We are delighted to announce this exciting transaction, which combines Amadeus' low-risk conventional oil and gas portfolio and strong balance sheet, with Lonestar's high growth unconventional assets focused on the Eagle Ford shale," Amadeus chairman Craig Coleman said.
"Overall, we believe this will create a company with a significantly more compelling investment preposition, including an attractive valuation relative to ASX-listed peers and the potential for substantial future earnings growth from both existing assets and new acquisitions."