Xstate downgrades Bombora deal

Perth-based Xstate Resources have dropped their target of gaining 100 per cent control of Bombora Energy in an amended heads of agreement that will see them acquire 75.9 per cent of the shares on issue for the company.

Xstate will obtain a majority stake of three working assets based in California and the company is looking toward early drilling activity in 2014.

Also based in Perth, Bombora has a 22.5 per cent working interest in 9051 acres of leases with prospective oil in San Luis Obispo County, a 10.9 per cent working interest in a well near Coalinga and nearly 6.6 per cent interest in 3000 acres of seismic and associated leases in Contra Costa County.

The acquisition of assets is a part of Xstate’s strategy of exploring material oil and gas resources in the California area and the Porter Ranch in San Luis Obispo gives the company exposure to substantial oil prospects in the oil-rich Monterey formation.

The consideration for the 75.9 per cent acquisition will now be 12,892,084 Xstate shares.

Xstate has also placed 11 million shares at 3 cents per share to raise $330,000 in working capital.

“It is heartening that Xstate was quickly able to raise $330,000 from our long term supporters,” Xstate managing director Paul Cartwright said.

“These funds place us in a financially sound position and will allow us to comfortably finalise leasing over our newly identified prospects and meet out day to day administration costs.”

In a mutual interest with Australian Oil Company, 1447 kilometres of 2D seismic has been acquired for exploration.

“Access to these data enhances AOC’s ground floor prospecting strategy of generating and leasing prospects in California,” AOC managing director Gary Jeffery said.

“Using this seismic data we expect to generate additional high value prospects which will be able to be either drilled by AOC or farmed out on attractive terms.”

Xstate shares are up 16 per cent, trading at 3.5 cents per share as of 12.30pm, WST.