ANTARES ENERGY LIMITED
A.C.N. 009 230 835
For personal use only
Ground Floor
63 Hay Street
Subiaco WA 6008
ASX/NEWS RELEASE
PO Box 690
West Perth WA 6872
www.antaresenergy.com
27 October 2014
ANTARES ENERGY SELLS SOUTHERN STAR TO
BREIBURN ENERGY PARTNERS LP FOR 50,000,000 USD
AND 4,300,000 BREITBURN COMMON UNITS
The Directors of Antares Energy Limited (ASX:AZZ) are very pleased to advise that on Friday 24th
October 2014, Antares signed a Purchase and Sale Agreement as well as closed the sale of
Southern Star to Breitburn Energy Partners LP (NASDAQ:BBEP) for 50,000,000 USD and
4,300,000 Breitburn common units.
James Cruickshank, Antares’ CEO said, “We are very pleased to have executed another step in
our Permian Portfolio Strategy. Our Strategy of creating, developing, producing and realizing
value from our project assets, resulting in the redeployment of capital onto our remaining Dawson
County Permian project assets, has taken a very large step forward. We are very fortunate to
have been granted the opportunity to receive part payment for our Southern Star project asset in
4,300,000 Breitburn common units and look forward to working with Breitburn in the future.”
A Summary Of The Key Highlights Of The Transaction Include:
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~ 4,600 gross (~ 3,700 net) acres in Howard County
October production estimate of ~600 boepd
100% operated; ~ 80% average working interest
Acreage includes infrastructure to support horizontal drilling
The transaction has an effective date of 1st October 2014
About Breitburn Energy Partners LP
Breitburn Energy Partners LP is a publicly-traded independent oil and gas master limited
partnership focused on the acquisition, exploitation, development and production of oil and gas
properties throughout the United States. Breitburn’s producing and non-producing crude oil and
natural gas reserves are located in Michigan, Oklahoma, Texas, Wyoming, California, Florida,
Indiana and Kentucky. See www.breitburn.com for more information.
For personal use only
Private Placement
Breitburn’s common units to be issued as partial consideration in connection with this acquisition will
be issued in a private placement and will not be registered under the Securities Act of 1933, as
amended (the “Securities Act”), or applicable state securities laws and may not be offered or sold
in the United States absent registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state securities laws. The number of common
units being issued as partial consideration in connection with this acquisition will not be adjusted to
account for changes in the unit price or for purchase price adjustments.
Strategic Update
Antares since a change of CEO and Board of Directors starting on 1st July 2008 has taken a
Portfolio Management approach to the management of its project assets with a singular focus of
creating as much shareholder value as possible throughout its ownership life of the project assets.
This was demonstrated during the development of Yellow Rose and Blue Bonnet our two project
assets within our Eagle Ford Portfolio resulting in the sale of both projects to Chesapeake Energy
on 15th December 2010 for 200,000,000 USD netting 156,200,000 USD and creating a Net
Profit After Tax in excess of 75,000,000 AUD. Additionally this Eagle Ford Portfolio yielded a
further 10,000,000 USD in a subsequent sale of remaining non-core interests to BHP Billiton.
In 2011 our strategic objective was to create a Permian Portfolio consisting of three project assets.
This object was achieved with the creation of Southern Star (Howard County), Northern Star and
Big Star (Dawson County).
In 2012 our strategic objectives were to achieve Southern Star, Held By Production and to achieve
a daily production rate of 2,500 boepd. Both these objectives were achieved with Southern Star
Held By Production and then expanded to the North, whilst 2,500 boepd daily production was
achieved and then exceed with a rate of 2,722 boepd.
In 2013 our strategic object was to achieve commercial success in our Northern Star project asset.
This was achieved with Cozart 19 No. 1 which has been Antares’ most successful well and most
importantly has evidenced the sustainability of our Northern Star project asset.
In 2014 our strategic object was to realize the value which had been created in Southern Star and
to redeploy this capital onto our Dawson County project assets being Northern Star and Big Star.
This has now been achieved as of Friday 24th October 2014 with the signing of a Purchase and
Sale agreement as well as the closing of the transaction.
In 2015 our Permian Portfolio Management approach continues with the redeployment of capital
from the Southern Star sale onto our Dawson County project assets. This process has begun
already with the singular focus of creating as much shareholder value as possible and is
inconclusive of development, joint venture and sale considerations.
For personal use only
What Has Been Achieved In This Transaction?
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Receipt of 50,000,000 USD being (1 AUD = .88 USD) ~ 57,000,000 AUD.
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Receipt of 4,300,000 BBEP Common Units (12 month VWAP ~ 19.50 USD)
~ 84,000,000 USD (1 AUD = .88 USD) ~ 95,000,000 AUD.
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Receipt of a monthly distribution 4,300,000 x .1675 = 720,250 USD (1 AUD = .88 USD)
~ 818,465 AUD annualized being ~ 10,000,000 AUD.
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Macquarie Bank Term Debt Facility paid back to 0.00 USD.
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Macquarie Bank Term Debt Facility 3 year Term expires 15th December 2014 and is
currently being rolled over for a 5 year Term with 200,000,000 USD reinstated due to
Antares maintaining Perfect Capital Management, Perfect Debt Servicing and Perfect
Compliance Management throughout the first 3 year Term.
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Antares is Debt Free for the first time in 3 years.
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Antares has maintained a Perfect Payment History and Perfect Capital Management of its
AZZG Convertible Notes over 12 years. Antares is extremely confident this track record
will be maintained.
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Antares has maintained a Perfect Audit History and is extremely confident this track record
will be maintained.
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Antares will now have ~ 100,000,000 AUD of cash or cash equivalent and not less than
200,000,000 USD to pursue the singular focus of creating as much shareholder value as
possible from its Dawson County project assets being Northern Star and Big Star. Antares
expects that a future sale of all Dawson County project assets would result in the transfer
of ~ 25,000 net acres.
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Antares having Bought Back and cancelled 45,307,277 AZZ shares at an average price of
41 cents will now pursue another 10% Buy Back valid for a 12 month period being up to
25,500,000 AZZ shares.
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Antares’ Eagle Ford Portfolio sales resulted in no net taxation leakage of shareholder
value and this Permian Portfolio sale has been structured so as to result in no net taxation
leakage of shareholder value.
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Antares completed this transaction ‘in house’ and thus there were no intermediaries involved
and no intermediaries fees resulting in a very considerable saving of shareholder’s value
as demonstrated in the below fees guide:
- ~ 150,000,000 AUD x 1.00% = 1,500,000 AUD
- ~ 150,000,000 AUD x 2.00% = 3,000,000 AUD
- ~ 150,000,000 AUD x 3.00% = 4,500,000 AUD
- ~ 150,000,000 AUD x 4.00% = 6,000,000 AUD
- ~ 150,000,000 AUD x 5.00% = 7,500,000 AUD
ASX Announcements
For personal use only
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7th July 2014 “ANTARES HAS RECEIVED A 300,000,000 USD LETTER OF INTENT FOR THE
SALE OF ALL PERMIAN ASSETS”.
Antares as of the 25th October 2014 has written and spoken to the other party advising
them of the signing of a Purchase and Sale Agreement as well as the closing of the
transaction on the 24th October 2014 and thus Antares’ withdrawal from this process.
The other party expressed their refocus upon our Dawson County project assets.
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21st July 2014 “UPDATE ON CONFIDENTIAL UNSOLICITED TAKEOVER BID”.
Antares as of the 25th October 2014 has written and spoken to the other party advising
them of the signing of a Purchase and Sale Agreement as well as the closing of the
transaction on the 24th October 2014 and thus Antares’ withdrawal from this process.
The other party expressed their refocus upon our Dawson County project assets.
Summary
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26th June 2013 “300,000,000 USD EXECUTED LETTER OF INTENT FOR THE SALE OF ALL
PERMIAN ASSETS”
Antares released the above ASX Announcement upon the execution of an unsolicited Letter
of Intent to then negotiate in good faith a Purchase and Sale Agreement.
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26th August 2013 “300,000,000 USD EXECUTED PURCHASE AND SALE AGREEMENT FOR
THE SALE OF ALL PERMIAN ASSETS”
Antares released the above ASX Announcement upon the execution of a Purchase and Sale
Agreement with the closing of the transaction expected on the 15th January 2014.
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19th December 2013 “NOTICE OF GENERAL MEETING AND SALE UPDATE”
Antares released the above ASX Announcement to advise of a Notice of General Meeting
of shareholders to be held on the 22nd January 2014 with three resolutions as well as to
advise the Sale closing date had been revised to the 28th February 2014.
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22nd January 2014 “RESULTS OF GENERAL MEETING”
Antares released the above ASX Announcement to advise that all resolutions had been
passed unanimously by the requisite majority on a show of hands.
For personal use only
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5th February 2014 “STRATEGIC UPDATE”
Antares released the above ASX Announcement to advise that Cozart 19 No 1, Antares’
most successful well, had evidenced the sustainability of Northern Star production and that
subsequent operations had resulted in the Board of Directors’ conclusion that the existing
Northern Star operational success is repeatable. Additionally Antares had considerable
funding opportunities available to it including its AZZG Convertible Notes and its
Macquarie Bank Term Debt Facility. Finally Antares advised that it had withdrawn from the
sales process as the Board of Directors believed that greater shareholder value could be
created through the further development of its Permian Portfolio. It is believed this
transaction evidences that belief.
In keeping with the above this transaction is in the best interests of all Shareholders and
Stakeholders. This transaction is phase one of the realization of the most possible
Shareholder value from our Permian Portfolio of project assets.
This transaction does not represent any significant change to the scale or nature of Antares’
activities as it represents the transfer of only 3,700 net acres of which Antares retains an
interest in those very acres as a result of holding 4,300,000 Breitburn common units.
Furthermore Antares retains the vast balance its Permian Portfolio of project assets with the
complete retention of its current interests in both of its Dawson County Permian project
assets being Northern Star and Big Star of which a future sale would expect to result in the
transfer of ~ 25,000 net acres.
Finally, the Board of Directors would like to thank their loyal shareholders for all their much
appreciated support and hope our excitement is shared for the future of our Permian
Portfolio as in the usual course of business we continue to manage our Permian Portfolio for
the greatest possible creation and realization of Shareholder value.
UPDATED
For personal use only
ANTARES CORPORATE HISTORY
1 JULY 2008 - 11 JULY 2014
OPENING PRICE 6.8 CENTS - CLOSING PRICE 65 CENTS
855% OVER 6 YEARS : 140% PER ANNUM
NO DIRECTOR IN THE HISTORY OF ANTARES HAS EVER SOLD A SHARE
ANTARES EST 2004: THIS REPRESENTS A DECADE OF NOT SELLING A SHARE
The Directors of Antares Energy Limited (ASX:AZZ) advise of the following corporate history:
1 July 2008
‘Appointment of Managing Director and Chief Executive Officer’ – James Cruickshank
The beginning of the current Board of Directors.
At that time the company was on the brink of administration with a share price of 6.8 cents,
market capitalisation of approximately 10 million, cash at bank of approximately 2 million, debt
of greater than $21,000,000 with minimal production and Antares’ exposure to the Eagle Ford
shale was limited to 4,200 untested and unproven acres. Antares as a result of the hard work,
focus and extraordinary commitment of the Board of Directors has come a long way to be in the
best financial positon in the history of this entity.
AZZ ISSUES:
25 August 2008
‘Placement To Strategic US Oil And Gas Investor’
Issue of 24,000,000 shares at 10 cents to raise $2,400,000 being a 43% premium to the closing
price of Antares on Friday 22 August 2008.
4 August 2009
‘Placement & Share Purchase Plan’
Issue 40,000,000 shares at 25 cents to raise $10,000,000 through Patersons Securities Limited
resulting in overwhelming demand for the offer and a significant scale back of applications.
16 September 2009
‘Share Purchase Plan 100% Oversubscribed’
Issue 16,890,000 shares at 25 cents - Antares is pleased to advise that its Share Purchase Plan
closed as scheduled on Wednesday the 9th September 2009 being in excess of 100%
oversubscribed. The board of Directors in the spirit of goodwill have elected to accept all valid
applications from shareholders wanting to further invest in the company and thank shareholders for
their strong show of support.
16 December 2009
For personal use only
‘Allotment Of New Shares To International Fund’
Issue 5,000,000 shares at 40 cents to Galena Asset Management of Geneva Switzerland a
subsidiary of the Trafigura Group, one of the world’s largest commodities traders.
Issued at a 2.5% premium to the 39 cent closing price 15th December 2009.
22 February 2010
‘Placement’
The directors of Antares Energy Limited (ASX: AZZ, “Antares”) are pleased to advise
completion of a placement of 30,000,000 shares to raise $19,200,000 (Placement). The share
placement was undertaken by lead manager Patersons Securities Limited to a range of leading
institutions and sophisticated investors.
Antares sought to issue 30,000,000 shares to raise $19,200,000. Due to overwhelming
demand for the offer, Antares closed the book build process quickly allowing the issue of
30,000,000 shares to raise $19,200,000 resulting in a very significant scale back of
applications.
17 June 2010
‘Allotment Of New Shares To International Funds’
Antares Energy is proud to advise it has developed relationships with some of the highest caliber
International Funds as a result of recent meetings held in New York.
Antares has completed an Institutional Placement to a number of the most sophisticated Institutional
investors in the Eagle Ford shale, through the issue of 20,500,000 new shares at 60 cents to raise
$12,300,000 for the further development of its Eagle Ford acreage. The issue price of 60 cents
represents a 7% premium to yesterday’s closing price of 56 cents.
AZZ BUY BACK:
29 November 2010
‘On Market Share Buy Back’
Antares announces the first of an ongoing Share Buy Back program.
2010 - Antares Issues 50,500,000 shares at an average price of 62.4 cents raising $31,500,000.
2013 - Antares buys back and cancels 45,307,227 shares at an average price of 41.1 cents at a
cost of $18,606,933 resulting in 255,000,000 shares on issue.
Antares creates $9,650,439 wealth for shareholders through capital management represented
by 45,307,227 x 21.3 cents.
Antares returns $18,606,933 to shareholders through the Buy Back.
27 October 2014
On Market Share Buy Back
Antares announces an ongoing 10/12 Share buy Back Program.
AZZG ISSUE:
22 July 2013
For personal use only
2,980,000 AZZG x $2.00 = $5,960,000
Issued at a 45% premium to market. Strike Price 67 cents, Market Closing Price 46 cents.
7 October 2013
5,000,000 AZZG x $2.00 = $10,000,000
Issued at a 34% premium to market. Strike Price 67 cents, Market Closing Price 50 cents.
13 March 2014
2,085,000 AZZG x $2.00 = $4,170,000
Issued at a 47% premium to market. Strike Price 67 cents, Market Closing Price 45.5 cents.
2 May 2014
1,500,000 AZZG x $2.00 = $3,000,000
Issued at a 61% premium to market. Strike Price 67 cents, Market Closing Price 41.5 cents.
15 May 2014
1,415,000 AZZG x $2.00 = $2,830,000
Issued at a 40% premium to market. Strike Price 67 cents, Market Closing Price 48 cents.
24 June 2014
9,750,000 AZZG x $2.00 = $19,500,000
Issued at a 33% premium to market. Strike Price 67 cents, Market Closing Price 50.5 cents.
AZZG BUY BACK:
26 August 2008
‘Commencement of Convertible Note Buy Back’
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Lowest price paid 64 cents.
2,034,690 bought back and canceled at an average price of $1.36.
Total Consideration $2,777,948.
Notes issued 2,034,690 x $2.00 being $4,069,380.
Notes bought back and canceled 2,034,690 x $1.365 being $2,777,948.
Antares creates $1,291,432 wealth for shareholders through capital management
represented by 2,034,690 x 64 cents or $4,069,380 - $2,777,948.
No AZZG has ever been converted to AZZ, thus accretive for shareholders, not dilutive.
ASSET SALES:
29 November 2010
For personal use only
200,000,000 USD SALE OF YELLOW ROSE AND BLUEBONNET
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21.5% Premium per acre over all Eagle Ford shale transactions within 2010.
35.7% Premium per acre over all 10,000 to 40,000 acre transactions within 2010.
Transaction priced as a Cash Sale not a joint venture.
The singular focus throughout the life of these projects was to create shareholder value.
Antares’ share of sale proceeds 156,200,000 USD due to successful Joint Venture.
Antares retained an interest in the Eagle Ford with successful partner Petrohawk Energy.
The purchaser, Chesapeake Energy one of the world’s leading oil and gas companies.
Net Profit After Tax $75,379,000.
An average of 4 Directors during less than 2.5 years produced over $18,844,750 Net
Profit After Tax each or $7,537,900 Net Profit After Tax per Director, per Annum.
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Additionally a free carried Over Riding Royalty Interest in the Eagle Ford was sold for an
additional 10,000,000 USD to BHP Billiton.
27 October 2010
ANTARES ENERGY SELLS SOUTHERN STAR TO BREIBURN ENERGY PARTNERS LP FOR
50,000,000 USD AND 4,300,000 BREITBURN COMMON UNITS
DEBT FACILITY:
31 October 2011
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200,000,000 USD Term Debt Facility.
36 Month Term.
Interest rate of LIBOR + 4.00% per annum.
Maximum debt drawn down of approximately 60,000,000.
Current debt draw down 0.00 USD.
RESOLUTION HISTORY:
Antares has a 100% perfect track record, evidenced by every resolution that has ever been put to
shareholders in the history of Antares has always been approved.
For personal use only
SUMMARY:
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AZZ always issued at a premium (3 out of 3 times) by Antares directly, of up to 43%.
AZZG always issued at a premium (6 out of 6 times) of up to 61%.
AZZ buy back creates $9,650,439 wealth for shareholders.
AZZG buy back creates $1,291,432 wealth for shareholders.
AZZ & AZZG capital management program creates $10,941,871 wealth for shareholders.
Antares returns $18,606,933 to shareholders through the Buy Back.
200,000,000 USD Sale of Yellow Rose and Bluebonnet $75,379,000 Net Profit After Tax.
10,000,000 USD Additional sale, free carried Over Riding Royalty Interest in Eagle Ford.
Antares Energy sells Southern Star to Breitburn Energy Partners LP for 50,000,000 USD
and 4,300,000 Breitburn common units.
200,000,000 USD Term Debt Facility, 36 Month Term, LIBOR +4.00% per annum.
100% perfect resolution track record as all resolutions ever put to shareholders approved.
An average of 4 Directors during less than 2.5 years produced over $18,844,750 Net
Profit After Tax each or $7,537,900 Net Profit After Tax, per Director, per Annum.
For further information please contact:
James Cruickshank
Chairman & CEO
+ (61) (0) 488 222 122
or + (1) 214 762 2202
Special thanks to St. Jude