The merged entity is also expected to benefit from the broader asset portfolio in Australia and Botswana
Australian east coast focused gas company Real Energy has agreed to merge with Strata-X Energy to create a new entity, named Pure Energy.
Both the companies have signed a binding scheme implementation agreement (SIA) to pursue a nil premium merger.
Real Energy said that the combination of the two companies will represent a compelling opportunity for creating a material gas business with significant holdings in Surat and Cooper Basins, Queensland.
The merged entity is also expected to benefit from the broader asset portfolio in Australia and Botswana.
Pure Energy will hold the full ownership of Project Venus
Additionally, the company will hold the full ownership of the Project Venus, which is located within the proven Walloon CSG fairway and immediately adjacent to gas pipeline infrastructure in the Surat Basin.
The merged company is also expected to remove duplicate administrative functions and listing costs, which would deliver significant cost savings.
Upon completion of the merge, Strata-X would change its name to Pure Energy and will delist its shares from the TSX Venture Exchange.
The combined company would have a total of 11.8 TCF2 prospective gas resources, with 770 BCF of 3C and 353 BCF of 2C contingent gas resources.
Through substituting methane with coal and diesel, Pure Energy is aiming to reduce the emissions and will also investigate the feasibility of constructing a methane- to-hydrogen facility in Gladstone.
Furthermore, Real Energy said that the implementation of the merger is subject to a number of conditions that include Real Energy shareholder and court approvals.