PERTH (miningweekly.com) – Perth-based Eden Energy on Tuesday announced that it had terminated a conditional agreement with Shale Energy to sell its UK portfolio of assets, after Shale failed to complete a £7-million capital raising.

In September last year, Eden and Shale agreed to a transaction that would see Shale pay a nonrefundable A$94 300 deposit to Eden, as well as a further A$1.89-million in cash on the completion of the sale.

The unlisted UK company would also have issued Eden a number of fully paid ordinary shares amounting to some A$11.9-million, accounting for nearly 30% of the company’s issued capital.

Eden would also have been entitled to receive a further A$5.5-million worth of ordinary shares in Shale Energy in two equal tranches, on the achievement of two milestones.

However, with the transaction now falling through, Eden has turned to the parent company of its two existing UK joint venture (JV) partners, UK Onshore Gas, entering into a conditional heads of agreement (HoA) to merge their respective interests in the projects.

Under the new transaction, Eden would transfer its UK subsidiary Adamo Energy to UK Onshore Gas, in exchange for £1-million in cash, along with a 33.33% interest in the aggregate share capital of UK Onshore Gas before it undertook any capital raising.

UK Onshore Gas would then either list on the Aim or complete an off-market capital raising of no less than £10-million.

Eden would have to consent to any capital raising of takeover transactions that placed a value of less than £36-million on UK Offshore Gas, and would be allowed to appoint one director to the company’s board.

The HoA was conditional upon a formal agreement being executed before the end of April, as well as shareholder approval.

Eden holds a 50% JV interest in 17 petroleum and development licences in the UK, and holds one fully owned licence. All the licences had the potential to contain significant quantities of hydrocarbons.