• Strike Energy to offer 0.485 Strike Energy shares for every 1 UIL Energy ordinary share held
• Premium for UIL Energy shareholders of 43.4% based on the 30-day VWAP for each of Strike Energy and UIL Energy1
• Significant benefits for both sets of shareholders as part of the Merged Group
• The Board of Directors of UIL Energy unanimously recommend that UIL Energy shareholders accept the Offer, in the absence of a superior proposal and subject to satisfaction of the capital raising condition and the independent expert concluding that the offer is reasonable
• The Board of Directors of UIL Energy, who collectively hold approximately 25% of UIL Energy’s ordinary shares, intend to accept the Offer, in the absence of a superior proposal and subject to satisfaction of the capital raising condition and the independent expert concluding that the offer is reasonable
• Logical consolidation of the complementary UIL Energy and Strike Energy portfolios will provide the platform to create a meaningful Perth Basin operator

Strike Energy Limited and UIL Energy Limited have entered into a binding Takeover Implementation Deed (TID) pursuant to which Strike Energy (or its wholly owned subsidiary) will make a conditional off-market takeover offer to acquire all of the issued shares of UIL Energy at an offer price of 0.485 Strike Energy shares for each UIL Energy ordinary share.

The combination of Strike Energy and UIL Energy (Merged Group) presents a compelling opportunity to build a material domestic gas business with significant holdings in the Cooper and Perth Basins.

The Board of Directors of UIL Energy (UIL Energy Directors) unanimously recommend that UIL Energy shareholders accept the Offer:

• in the absence of a superior proposal; and
• subject to satisfaction of the capital raising condition and an independent expert concluding that the Offer is reasonable.

The UIL Energy Directors intend to accept the Offer in respect of all shares they own or control, and exercise all ‘in-the-money’ options they own or control for the purposes of accepting the Offer in respect of the issued shares, by the later of 21 days after the Offer is opened for acceptance and 5 days after despatch of the UIL Energy target’s statement, each:

• in the absence of a superior proposal; and
• subject to satisfaction of the capital raising condition and an independent expert concluding that the Offer is reasonable.

Commenting on the Offer, John Poynton, Chairman of Strike Energy said, 
“It is an exciting time for Strike Energy to be building a meaningful Perth Basin operated business. The additional exploration potential in the extensions of the Kingia-High Cliff sands sequence is set to be high graded through our near term high-impact drilling at West Erregulla, and has the potential to release further large scale gas opportunities. The Perth Basin continues to show signs of a heavily underexplored hydrocarbon system and the addition of UIL Energy’s acreage will result in Strike being set to influence the Western Australian domestic gas market over the coming decades.

This transaction plays to Strike’s strengths of being a low cost and high-impact on-shore exploration and appraisal operator, which makes it an extremely attractive opportunity for both UIL Energy and Strike Energy shareholders alike.

The Merged Group will be well capitalised to execute on the Perth Basin strategy whilst continuing to progress the Southern Cooper Basin Gas Project, which is approaching a key milestone in proving commercial success.

The addition of the UIL Energy portfolio provides further diversity and scale benefits, and is a natural fit with our strategy of targeting potentially transformational gas supplies for both the Western and Eastern Australian domestic gas markets.

I look forward to welcoming existing UIL Energy shareholders to the Strike Energy register as part of the proposed transaction, and encourage all UIL Energy shareholders to read the Bidder’s Statement, which will be available shortly, for further information.”

Simon Hickey, Chairman of UIL Energy said, 
“This is a compelling offer for UIL Energy shareholders to participate in a combination of Strike Energy and UIL Energy with significant positions in both the Perth Basin and Cooper Basin, and the potential to supply gas to both the West Coast and East Coast markets.

Both Strike Energy’s interest in the West Erregulla block and our portfolio enhances the likelihood of a merged entity becoming a substantial operator in the Perth Basin. The West Erregulla prospect, expected to be drilled in early 2019, along with Strike Energy’s current Jaw’s project, provides UIL Energy shareholders with exposure to highly prospective and significant projects.

In the absence of a superior proposal and subject to the independent expert concluding the Offers are reasonable, I, along with the UIL Energy Board of Directors, recommend all UIL Energy shareholders accept the Offer from Strike Energy, as I intend to do in relation to my own shares.”

TRANSACTION RATIONALE

The combination of Strike Energy and UIL Energy presents a compelling opportunity to build a material domestic gas business in the Perth Basin, to complement Strike Energy’s extensive holding in the Cooper Basin.

The combination of the two portfolios creates a robust platform to further explore, appraise and ultimately develop the Perth Basin assets. The addition of UIL Energy’s northern permits (EPA 82, EPA 98 and EPA 99), which Strike Energy management believe to be an extension of the Kingia-High Cliff sands sequence, provide additional upside to Strike Energy’s West Erregulla prospect in EP 469 (Strike Energy 50% and Operator; Warrego Energy Pty Ltd 50%) due to be drilled in Q1 2019.

The addition of the UIL Energy assets also diversifies Strike Energy’s portfolio across multiple plays in the Perth Basin and the Merged Group will have a significant holding in the basin covering ~3,000km².

The Merged Group will also benefit from a number of synergies and cost savings. These would primarily be sourced from the increase in operational efficiencies and the elimination of duplicated corporate, administrative and technical costs.