Composite Energy Limited, the Scottish-based specialist in the extraction of natural gas from coal seams, announces that Australian Stock Exchange listed Dart Energy Limited ('Dart'), has invested US $7 million in exchange for a 10% stake in the Company. Dart, which recently demerged from Arrow Energy, is currently focused on the development of Coal Bed Methane ("CBM") in Australia, Indonesia, China, India and Vietnam. The investment in Composite provides Dart with exposure to opportunities in the Coal Bed Methane and Shale Gas sectors across the United Kingdom and Europe and is part of their wider strategy to create a global CBM Company.
Dart has also been granted two options (a) to make a further investment in the Company and (b) to make an offer to acquire the Company at an agreed price. These options expire in January 2011 and June respectively.
Commenting on the deal, Keith Lough, Composite Energy's Chief Executive Officer, said:
"Dart is a highly experienced Coal Bed Methane operator and one of the few companies in the world to have taken coal bed methane from exploration through to production. We are delighted to welcome Dart not only as an investor in Composite but as we continue to build our CBM and Shale Gas extraction business in the UK and Europe we also expect to benefit from the technical experience of the Dart team.
"The funds received from Dart will be utilised in drilling CBM and Shale Gas wells in PEDL133 in Scotland, securing further licences and supporting drilling activities in a number of European countries.
"The investment and involvement of Dart complements our 2008 deal with BG Group whereby Composite and BG Group each have a 50% interest in licences awarded in the 13th UK Onshore Licensing Round. Ten of the twenty commitment wells under those wells have been drilled so far and the results are being evaluated. Composite is designated Operator of the licences and all the wells were successfully drilled by our wholly-owned drilling subsidiary, Geometric Drilling Limited."
Simon Potter, CEO and Managing Director of Dart Energy, said:
"Our stated strategy is to grow our business into Europe and the work Composite has already done in laying the foundations for a strong UK and European CBM business provides us with ready access to high quality assets and a strong commercial and technical team. We look forward to developing our relationship further with Composite in delivering our European aspirations."
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