American Patriot in takeover talks

Published at Feb 23, 2016, in Energy

Even at a time of low oil prices, junior oil and gas play American Patriot (ASX:AOW) has received a takeover offer from a joint venture partner in the US valuing it at $35 million – just under three times its current market cap.

The oil play told its shareholders today that it had received an offer from private company Running Foxes Petroleum to take over the shares of AOW for 22c each. AOW’s current share price is 14c.

Running Foxes is a joint venture partner of AOW at its Rough House oil project in Colorado, having farmed into the project this month.

For the meantime, AOW has advised its shareholders to take no action on the offer – wanting to run the offer by major shareholders first.

Still, the offer from a partner which has farmed into a project just this month is a sign that the company’s strategy is working — according to AOW CEO Alexis Clark.

“To receive an offer from Running Foxes for the entire company in an oil market that is both challenging and volatile is a testament to the quality of the assets and the business model we have created,” he said in a statement.

AOW holds a number of oil and gas leases in four states of the US, with the Northern Star project in Montana and the Rough House project in Colorado considered the leading assets.

Its overarching strategy is to work up assets to a point where it can farm them out to a bigger partner, while retaining a working interest in the asset and more often than not receiving a free carry on wells in the program.

In the case of Running Fox, it farmed into Rough House earlier this month, taking a 70% operating stake in the asset and committing for up to five wells.

Interestingly, this is not the first time AOW has received a transaction offer.

In September last year it received an offer from a private company headed up by Edward Mike Davis to buy the assets of AOW for $20 million in cash.

AOW knocked back the deal, calling it “opportunistic” and wanting to test the market for a higher offer.

tags

OIL

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X