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Buccaneer reviewing strategic options
Buccaneer Energy Ltd. is on the market.
The board of directors of the Australian independent recently rejected an offer from an unnamed third party interested in acquiring all the company’s ordinary shares, but the company also said it would be willing to negotiate with the bidder on a different offer.
Buccaneer described the bidder as a “credible party which is known to the company and with whom the company has previously discussed the possibility of a business combination,” but said the offer “does not properly reflect the value of the company.”
Financial advisor hired The announcement comes several weeks after Buccaneer hired Canaccord Genuity (Australia) Ltd. to be its financial advisor for “strategic alternatives” for its assets.
“Everything’s on the table, including farm-ins, investments at the company level, a dual listing on a North American stock exchange or possibly a change of control transaction,” Buccaneer Director Dean Gallegos recently told the Wall Street Journal about the review.
Considering the recent offer and interest from other unnamed third parties, the Buccaneer board of directors said it would continue with the strategic review with Canaccord.
Buccaneer believes its market capitalization fails to represent the true value of its assets in the Cook Inlet basin. The 17.8 million barrels of oil equivalent of proven reserves at Kenai Loop, Southern Cross and Cosmopolitan have a present value of $342 million, Buccaneer said, but the company has a market capitalization of only around $66 million.
“We believe a reason for the valuation disconnect could be that we’re the only Australian company operating in that basin. … It’s difficult for investors to easily compare us with another entity,” Gallegos told the Wall Street Journal.
—Eric Lidji
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