A merger and back-door listing between two of L&M Group's subsidiary companies - listed L&M Petroleum and L&M Coal Seam Gas Ltd - now appears likely in the New Year, but without the need to raise $A30 million ($NZ37.5 million), as indicated earlier in the year.
L&M Petroleum listed in January 2007, raising $20 million, and at August this year had $8.3 million to continue through the year.
L&M Group chairman Geoff Loudon, who was unavailable for comment yesterday, in late-August announced L&M Petroleum's parent, L&M Group, wanted to raise up to $A30 million, in a back-door listing through an existing company or new initial public offering.
It is intended to underpin an aggressive more than year-long drilling programme targeting coal seam gas in Otago and Southland, having already spent about $13 million to date.
Anonymous sources close to the merger said the proposal was still going through regulatory consideration and a decision was expected in the New Year.
With expectations of regulatory clearance, it would allow an L&M Petroleum shareholder vote on the proposal to go ahead, before listing the merged entities on the New Zealand and Australian stock exchanges, possibly by January or February, under a new L&M banner.
The new listing was understood not to include raising $A30 million and "only a fraction" of that amount would be required, as existing funds from L&M Petroleum would be used.
In announcements to the New Zealand stock exchange this week the 42.7% share of L&M Petroleum held by Weaver Holdings International Ltd was transferred to the three shareholders (Tangent International Ltd, Campania Holding Inc and Mr Loudon); who are shareholders in the ultimate holding company, Auriferous Mining Ltd.
Weaver had 75 million shares and nine million L&M options for sale, selling equal tranches of 25 million shares and three million options each to Tangent, Campania and Mr Loudon, with each transaction valued at $A3 million.
The three entities each own 30% of Auriferous, with the 10% balance held by small private investors.
L&M Petroleum has six petroleum exploration permits covering more than 5000sq km in four basins, including three onshore, in the western Southland Basin near Waiau and Blackmont, the Westland Basin on the West Coast and Hohonu and Taranaki, plus an offshore permit for the Solander Basin, south of Southland.
The company says the estimated resource potential is of up to 1 trillion cubic feet of gas and 300 million barrels of oil, equating to about 170 petajoules of energy.
