A proposal by oil and gas explorer Beach Petroleum Ltd
(ASX:BPT) to acquire a majority holding in junior explorer Essential Petroleum Resources Ltd
(ASX:EPR) has been given support from the Essential board and the company’s major shareholder.
The proposal will see the debt owed to Beach Petroleum by Essential converted to shares representing a 51 per cent of the company’s voting shares on issue.
Essential will also transfer a 50 per cent interest in exploration licence PEP168 to Beach.
Essential says a $660,000 debt owed to Japan’s Mitsui is to be paid with proceeds from a capital raising of a minimum $2 million.
The two companies are preparing legally binding documents and have commenced the process for the calling of a general meeting.
Beach Petroleum’s 2008 net profit was $63.73 million, down on the year before.
