Published On: January 6th, 2024
Calima Energy Limited (ASX: CE1 / OTC: CLMEF or the Company) has entered into a binding definitive agreement to sell 100% of its wholly-owned Canadian subsidiary, Blackspur Oil Corp., to Astara Energy Corp. for a cash consideration of approximately A$83.3 million.
The Board of Directors recommends the sale, citing the significant disparity between the market capitalisation of the Company and the inherent value of Blackspur. The sale is expected to close by March 30th, 2024.
Shareholders can vote on the sale at an Extraordinary General Meeting on February 15th, 2024.
Fig.1 Indicative Timetable
Mr. Glenn Whiddon, Chairman of Calima, said,
“For some time, the share price of Calima has not accurately reflected the value of Calima’s oil and gas assets vis a vis our Canadian peers. The Blackspur Sale presents an excellent opportunity for Calima shareholders to benefit from this differential. The Board’s objective is to return the maximum amount of these proceeds to shareholders. I wish to thank all stakeholders for their support over the past few years, and importantly, the management team and field staff of Calima for their focus and dedication to the Company’s assets.”
Mr Glenn Whiddon, the Chairman of Calima Energy Limited, is experienced in equity capital markets, banking, and corporate advisory, primarily focusing on the natural resources sector. Mr Glenn Whiddon has been in charge of different leadership and management positions in the business world. Mr Glenn Whiddon is a Director for multiple publicly traded Australian and international companies operating in the resources sector.
Under his guidance, Calima Energy Limited has seen substantial growth in the energy sector.
Key Highlights
- The cash sale, subject to customary adjustments for net debt, amounts to C$75 million (A$83.3 million). The post-sale net cash backing is estimated to be around 13 – 13.5 cents (A$) per share after completion adjustments
- The completion of the transaction is subject to shareholder approval and approval under the Canadian Competition Act. The Company aims to distribute at least 85% of the sale proceeds to CE1 shareholders post-completion
- Following the sale, Calima Energy Limited plans to continue as a listed Company, focusing on production from the Paradise Well in British Columbia. The company will also explore potential complementary opportunities
- Calima’s objective is to return a significant portion of the funds from the Blackspur Sale to its shareholders in a tax effect. Shareholders are set to vote on the sale at an Extraordinary General Meeting on February 15, 2024
The Blackspur Sale is expected to close approximately 10 days after shareholder approval, with a March 30th, 2024 deadline. Astara has provided a C$5 million escrow deposit to secure its obligations.
Moving Forward
Calima Energy Limited plans to retain its Paradise Well asset in British Columbia, generating approximately A$350,000 in free cash flow annually. The balance of the proceeds from the Blackspur Sale is intended for future exploration programs and operational costs. The Company also owns A$4.1 million in cash remaining with the Calima and an A$400,000 bond with BCOGC.
If the shareholders approve the sale and the transaction is completed, ASX will likely suspend the company’s securities from official quotation on July 2, 2024.
Investor’s Outlook and Financials
- Calima Energy’s sale of Blackspur Oil Corp. to Astara Energy Corp. marks a strategic move to unlock shareholder value and focus on its core assets
- Calima Energy’s share price stands at AUD 0.10 per share as of January 5th, 2024, with a 52-week range movement of AUD 0.061 – 0.150 per share
- The Company’s market capitalisation is AUD 62.5 million as of January 5th, 2024, with 625.7 million shares in issue
About Calima Energy
Calima Energy Limited (ASX: CE1 / OTCQB: CLMEF) is a Canadian Energy company that produces and explores oil and gas. Headquartered in Perth, Australia, the majority of the Company’s operations are centred in the southern and Central regions of Alberta.
Take a look at the official website for the latest news and updates.
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