Canadian-based Questerre Energy has reached an agreement with Whitehorn Resources to make a strategic investment in US-based oil-shale company Red Leaf Resources.
Under the agreement, Questerre will acquire 103,751 common shares of Red Leaf, which amounts to about 25% of Red Leaf’s outstanding common shares.
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The acquisition is valued at $60 per common share, paid concurrently with the applicable closing and a contingent payment of $12.50 per common share, subject to the fulfilment of certain conditions.
On completion of the acquisition, Questerre Energy will hold about 30% of the common share capital of Red Leaf.
Questerre president & CEO Michael Binnion said: “This investment gives us a minority control block in Red Leaf.
“They now have over $100m in cash and are committed to their business plan of commercialising EcoShale technology and supporting their licence holders to develop their projects.
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By GlobalDataThe company has reported that the first tranche of the acquisition for 82,015 common shares closed earlier this week.
Expected to close later this month, the second tranche of the acquisition includes the option to acquire Whitehorn.
It also features the Red Leaf Common Shares held by Whitehorn and its assets include a Memorandum of Understanding (MOU) with the Ministry of Energy and Mineral Resources in Jordan.
The MOU has been recently extended until 2019 and grants Whitehorn the exclusive right to explore for oil shale on 282km² in the Wadi Abu Al Hamam area that is situated to the north-west of Questerre’s acreage.
About 30 core holes have been drilled on this acreage with yields of between 15 and 25 gallons per tonne.
