Nido to merge their UK North Sea E&P assets

Perth-based Nido Petroleum Ltd has signed an agreement with Grove Energy Ltd and Virgo Energy Ltd to merge their UK North Sea oil and gas assets.
The combined assets will be held under a new company Virgo Energy which will be based in London and is planned to be listed on the Alternative Investment Market of the London Stock Exchange.

Nido will have a 25 per cent shareholding in the new company and said it would now be able to focus on its Philippines assets.

The full announcement is below:

Grove, Nido and Virgo to merge UK North Sea E&P assets

The Boards of Grove Energy Limited (Grove), Nido Petroleum Limited (Nido)
and Virgo Energy Limited (Virgo), are pleased to announce the signing of a
Heads of Agreement (HOA) to merge their UK North Sea E&P (energy and petroleum) assets and the
planned listing of a new company holding the combined assets on the
Alternative Investment Market (AIM) of the London Stock Exchange.
The new company holding the merged assets will be called Virgo Energy and
it will be headquartered in London.
Virgo Energy will be a medium sized, independent E&P company focussed on
the UK E&P sector of the North Sea. The three seed shareholders ¬ Grove,
Nido and Virgo are seeking to list the company on the London AIM and
raise sufficient equity funds to enable it to pursue an aggressive exploration
and development program. A target timeframe of first half 2006 has been set
for listing the company on London AIM.
Virgo Energy will initially hold interests in 24 exploration blocks, comprising
four in the Northern North Sea, five in the Central North Sea and 15 in the
Southern North Sea. The combined area of these blocks is 5,420 gross sq.
km. and 2,207 net sq. km. Of the 24 exploration blocks, nine will be
contributed by Virgo, seven by Grove and eight by Nido.
Virgo, Grove and Nido are seeking to appoint an independent Chairman and
CEO to the new company's Board. In addition, Virgo will appoint two Board
members whilst Grove and Nido will each appoint one. On a pre-IPO basis,
Virgo will hold a 47.5% interest in the new company, Grove will hold 27.5%
and Nido 25%.
Grove is listed on the TSX-V and on the London AIM and is focussed on E&P
activities in the Europe and Mediterranean basins. Further details regarding
Grove may be obtained on the company's website:
www.groveenergy.com
.
Nido is an Australian based E&P company, listed on the Australian Stock
Exchange. Nido's core areas are in the Philippines and the North Sea.
Further details regarding Nido may be obtained on the company's website:
www.nido.com.au
.
Virgo is a private, UK based, E&P company. The Virgo assets to be
transferred into the merged entity comprise the company's entire portfolio of
E&P assets. Further details regarding Virgo may be obtained on the
company's website:
www.virgoenergy.com
.
Commenting on the deal, David Whitby, Nido's Managing Director, said "This
strategic move is an exciting venture that will provide immediate benefits to
our shareholders. Not only will Nido, through Virgo Energy, have access to a
much broader based exploration portfolio in the UK, Virgo Energy will have
firm plans to start drilling in 2006. Furthermore, Virgo Energy will source an
independent team of highly experienced technical staff that will allow Nido to
fully concentrate its efforts in Australia and the Philippines on monetizing the
assets in the Philippines where Nido has recently applied for more exploration
acreage."