Dart Energy Plans Listing of International Assets
Dart Energy Limited plans to undertake a substantial restructuring, including a proposed listing of its international portfolio of coal bed methane assets on the Singapore Stock Exchange, to provide a platform for future growth and to unlock shareholder value.
Dart says the move follows recent, unsolicited expressions of interest in the company’s international asset portfolio and a detailed strategic review that concluded that the company is currently trading at a material discount to both its Australian and international peers and in particular, its international asset portfolio is not appropriately valued by Dart’s current shareholder base.
Accordingly, the board has approved several recommendations, namely:
- A separate international listing of a minority interest in all of Dart’s international assets, with the newly listed entity to be named “Dart Energy International”;
- A management restructure and creation of a separate board for the international business; and
- The possible introduction of strategic partners at either an asset or corporate level for Dart’s Australian assets.
Commenting on the proposed changes, Dart Chairman, Mr Nick Davies, said:
"The proposed changes are about unlocking value and providing greater see-through transparency on the value of both Dart’s Australian assets and our international portfolio, which currently comprises around 80% of our currently budgeted expenditure over the next 18 months. Our extensive international portfolio is the envy of many and we want to ensure its full development through building a new international shareholder base and the possible introduction of strategic partners at a company or asset level. A separately listed international vehicle can help expedite this."
Intention to seek a minority listing of the international assets
Dart intends to seek a separate, minority listing of all of its international assets on the Singapore Stock Exchange (“SGX”) by the end of Q1 2012. This includes all of Dart’s assets in the high-growth Asian markets of China, India, Indonesia and Vietnam, as well as all of Dart’s assets in Europe.
Dart will continue to hold a majority stake in the new international vehicle. The exact level of minority interest to be floated via an Initial Public Offering (IPO) is still to be determined, due in part to ongoing potential strategic partner and asset discussions.
The listing of the international assets on the SGX is expected to bring significant benefits, including:
-A new international investor base with greater knowledge and appreciation of Dart's key international markets;
-A separate vehicle and independent funding base from which to pursue future growth and acquisitions;
-A clearer measure of value of the international assets, and translation of that value through into the share price of the Australian company;
-Increased management and investor focus on the international assets.
The proposed IPO and listing would also raise any additional capital the board deems necessary to meet the future funding requirements of the international business on a standalone basis.
The new business will operate under the name “Dart Energy International”, and prior to listing, appropriate governance arrangements, including a separate board, will be put in place between the Australian and international entities.
Dart may simultaneously consider an ownership restructure of the international assets, subject to valuation, via introduction of strategic partners at the asset or regional level, or a corporate partner across all international assets as part of the SGX listing. This follows various enquiries from potential strategic partners.
Since its listing on the ASX, Dart has achieved a number of significant milestones across its international portfolio, including:
-Expansion of the international portfolio of assets from 7 tenements in 4 countries to 30 tenements in 7 countries;
-Substantial maturation of its resource base, with a current independently certified resource and reserve position of 16.3 TCF gas-in-place, 7.5 TCF of prospective resource, 100 BCF of 3P reserves and 43 BCF of 2P reserve (all net to Dart);
-Commencement of an aggressive 18 month exploration, appraisal and early-development campaign across the international portfolio;
-Production of first gas from pilot testing at Sangatta West, Indonesia;
-Approval from Ministry of Commerce for a Production Sharing Contract at Dajing, People’s Republic of China (PRC), and commencement of exploration drilling operations;
- Increase of working interest in Liulin project in PRC, and gas sales agreement;
- Entering into a JV with Electrosteel for exploitation of gas resources associated with its coal mine licence area in Parbatpur, India;
-Completion of the acquisition of Composite Energy, achieved initial reserves certification at PEDL 133, and signing of the company’s first gas sales agreement for CBM in the UK with SSE Energy;
-Addition of new licences in Indonesia, India, Poland and Belgium, and continued new business development activity;
-Establishment of a shale gas footprint in Scotland and in Poland; and
-Expansion of the international personnel base to approximately 140 people, located in 7 offices.
The company will make further announcements in relation to the intended listing on the SGX at the appropriate time and is targeting completion of the listing process by end of first quarter 2012.
Source: Dart Energy