Leyshon Resources to Spin Out Chinese Oil and Gas Assets
OREANDA-NEWS. September 23, 2013. Leyshon Resources' (ASX: LRL, AIM: LRL) shares are expected to open higher this morning after plans of a corporate restructure in order to separate its energy and mineral businesses.
LRL will demerge its interest in the Zijinshan Gas Project, held through subsidiary Pacific Asia Petroleum (PAPL), along with cash reserves of USD 35 million, into an energy focused vehicle, Leyshon Energy.
The demerger will be affected via a pro-rata, in-specie distribution of 100% of shares in Leyshon Energy to the Leyshon's current shareholders.
Leyshon Energy will apply for listing on the ASX and AIM; the separation will not be implemented until Leyshon Energy is able to satisfy the admission requirements of the ASX and/or AIM.
These restructurings allow shareholders to own an interest in two listed companies, Leyshon Energy and Leyshon Resources, at no additional cost to their original investment.
Leyshon Energy will be focused on the exploration and commercialisation of the Zijinshan project and has appointed a board with an enviable track record looking to exploit opportunities in the oil and gas sector.
Leyshon Resources will be looking to take advantage of the currently depressed asset values in the minerals sector with a view to collaboration with Chinese and other buyers.
Both companies will be well funded, with strong management teams now able to focus on their respective areas of expertise.
The Zijinshan Gas Project comprises the Zijinshan Production Sharing Contract (PSC) located on the eastern fringe of the Ordos Basin in central China, covering an area of 705 square kilometres. The PSC is with China National Petroleum Corporation, the largest oil and gas producer in China.
PAPL is the operator of the PSC and has a 100% working interest in the exploration phase of the PSC, with CNPC having the right to earn a 40% interest from development stage. The PSC is valid for 30 years and expires in 2038.
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