AOW courts more guests to takeover party

Published at Mar 8, 2016, in Energy

American Patriot Oil & Gas (ASX:AOW) is now in discussions with “a number of other interested parties” about a potential takeover bid.

The small-cap ASX oil company told its shareholders today that Running Foxes Petroleum (RFP), which had lobbed in a $35 million takeover bid last month, is now formally kicking the tyres of the company with a due diligence process.

At the time, AOW told shareholders to take no action on the bid while it considered the offer and got the opinion of major investors.

It re-iterated this advice this morning, but revealed it was sounding out other players in the market on possibly conjuring a competing bid for the company.

“In addition to the ongoing discussions with RFP, AOW is also in discussions with a number of other interested parties and will keep shareholders fully informed on the progress of these discussions,” it said.

The takeover bid is a cash bid, valued at 22c per share, and is subject to RFP gaining 90% of the shares in AOW.

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

More on AOW

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.

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.

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