The Board of Texon Petroleum Ltd (ASX:TXN) is pleased to announce, in conjunction with its proposed merger with Sundance Energy Australia Limited, that, subject to all necessary approvals and to the completion of the proposed demerger of the non Eagle Ford shale assets, it has contracted to buy from Wandoo Energy, LLC (a company associated with Texon Director David Mason) its working interest in jointly owned Eagle Ford shale assets in McMullen County, Texas, as of 1 October 2012, for the following consideration:
- US1,200,000 cash payable in four equal quarterly instalments, the first payable three months after completion of the demerger; and
- 11,200,000 shares in the holding company of the demerged group (referred to in the Company's 13/11/12 release and presentations as Talon Petroleum Limited)
which is subject to adjustment downwards (to US1,000,000 and 10,000,000 shares in Talon Petroleum) if binding agreements with certain landowners are not entered into within 12 months.
This transaction with Wandoo, involving the removal of the carried working interest on Texon's EFS acreage, was a key component of the proposed merger terms with Sundance.