Eureka Energy

A$107m Recommended On-Market Takeover by Aurora Oil and Gas

July 2012

Aurora Oil and Gas, a dual ASX/TSX listed oil and gas company, announced an unsolicited, on-market cash offer for Eureka Energy on 30 April 2012. Aurora and Eureka both held non-operating interests in the Sugarloaf Area of Mutual Interest, an unconventional oil and gas licence in the Eagle Ford shale play in Texas, USA.

Aurora’s $0.45 offer valued Eureka at A$107 million, and represented a premium of 36% to Eureka’s last trading price. Eureka’s Board believed the offer undervalued the company and was timed in advance of potential value enhancing events, including the optimisation of the Sugarloaf field development, and accordingly, initially recommended that shareholders reject the offer. However, following a decline in the broader market during the course of the offer and Aurora having acquiring a material shareholding in the company, Eureka’s Board ultimately recommended that shareholders accept the offer.

Azure advised Eureka’s Board on all aspects of takeover defence, including re-negotiating the terms of Eureka’s debt facility with Macquarie Bank to preserve the option to shareholders of selling into the offer, and seeking and negotiating proposals for alternative transactions with third parties. Prior to the offer, Azure had also advised Eureka on its broader corporate strategy, financing options and provided buy-side advice in relation to a number of acquisition opportunities that Eureka was considering.