Tap Oil Limited has informed it is reviewing its business and asset base in order to “respond to the recent change in market conditions in the oil and gas sector and to maximise value for all shareholders”.
Namely, the receipt of the proposal from Chatchai Yenbamroong (a Thai entrepreneur and substantial Tap shareholder) to replace three of Tap’s four existing directors with four of his nominees has provided a catalyst for Tap to offer alternative options to Yenbamroong’s proposal, which if successful would result in a change in control of the company without Tap shareholders being offered any control premium, Tap Oil said in the press release.
According to the company, together with his private Bermudan company, Northern Gulf Petroleum Holdings Limited, Yenbamroong currently has voting control over approximately 19.98% of Tap shares, having recently increased his shareholding from approximately 6% through on-market trades.
Tap Oil says that the strategic review will consider a number of divestment options for each asset, including the company’s flagship Manora Oil Development as well as the company’s non-core Australian portfolio. In this regard, Tap notes that such transactions (if successfully completed) should enable the company to reduce its debt and potentially also allow for the payment of fully franked dividends to shareholders.
In addition, the company says that the strategic review process will also consider any potential whole of company proposals that may emerge, should they provide compelling value for Tap shareholders. This follows the valuation outcomes achieved by shareholders in other ASX-listed companies with Australian and Asian oil production portfolios through change in control transactions over the last 12 months (such as Fosun’s acquisition of Roc Oil and Bangchak’s acquisition of Nido Petroleum).
Tap has appointed Miro Advisors in respect of the Australian asset portfolio divestment options, and Corrs Chambers Westgarth to assist with the strategic review process.