Calima sells ownership in Canadian subsidiary Blackspur Oil Corp for $83.3m

Definitive agreements have been executed for the sale of Calima Energy’s 100% ownership of Blackspur Oil Corp to Astara Energy
The company believes the sale will provide shareholders with inherent value from the Alberta assets
It will also free up capital to be returned to shareholders in excess of the current market capitalisation

Special Report: Calima Energy has entered into a binding definitive agreement with Astara Energy Corp for the sale of its ownership in wholly owned subsidiary, Blackspur Oil Corp.

Canadian focused oil and gas producer, Calima Energy (ASX:CE1) has agreed to sell 100% of its ownership in wholly owned subsidiary, Blackspur Oil Corp for a cash consideration of $83.3m to emerging private oil and gas junior, Astara Energy Corp.

Blackspur Oil Corp merged with Calima in May 2021 and owns the Brooks and Thorsby oil and gas production assets in Alberta, southeast of Calgary and near the city of Edmonton, respectively.

Calima’s board of directors has recommended the Blackspur sale as the market capitalisation of the company has not reflected the inherent value of Blackspur.

‘Excellent opportunity for shareholders’

“For some time, the share price of Calima has not accurately reflected the value of Calima’s oil and gas assets vis a vis our Canadian peers,” CE1 chairman Glenn Whiddon says.

“We believe the Blackspur sale presents an excellent opportunity for Calima shareholders to benefit from this differential.

“It is the board’s objective to return the maximum amount of these proceeds to shareholders.”

Calima’s objective is to distribute no less than 85% of the funds received from the Blackspur sale to Calima shareholders in the most tax effective form.

The company says it will seek an ATO ruling on this matter in a timely fashion.

Funds to drive future exploration

Funds will be spent towards the company’s future exploration programs and to pay for ongoing operational and administrative costs.

A Notice of Meeting will be issued shortly, which is subject to obtaining shareholder approval pursuant to Listing Rule 11.2 at an Extraordinary General Meeting expected to be held on 15 February 2024.

The sale is expected to close 10 days post the meeting, however, no later than 30 March 2024.

During 2023, CE1 returned $10m in previous distributions to shareholders.

This article was developed in collaboration with Calima Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.