The Adelaide office of Minter Ellison advised Texan company Austin Exploration Limited on its recent $10 million capital-raising initial public offering (IPO) on the Australian Stock Exchange, and its joint venture agreement with the Assam Company Limited of India. Austin Exploration has oil and gas concessions in the states of Texas and Louisiana in the US and in South Australia.
Mining this year became South Australia’s largest export earner, outperforming wine and general agriculture. “In this state we have seen a number of oil and gas explorers and mining companies float successfully, and [Austin’s IPO] reinforces that,” said Neville Martin, Minter Ellison’s Adelaide partner who led the firm’s team.
“[The $10 million] is too small to justify an IPO in the US. Added to that, several tenements in the portfolio were here in Australia, and the Australian Stock Exchange is a not insignificant player,” said Martin. “Australian investors are very experienced in oil and gas floats. In all, this was a good place to bring it all together.”
Martin travelled to Austin, Texas in February to finalise the joint venture agreement with Assam. DMS Exploration is an independent oil and gas operator with a background in technology for the interpretation of seismic data. Assam Company, a public company listed on the Bombay Stock Exchange, is better known as a producer of tea. However, in 1889 an affiliate made the world’s second ever discovery of oil, at Digboi in India.
A key feature of Austin Exploration’s strategy is to quickly establish a commercial gas production base in the US and to use the anticipated early cash flow to fund the drilling of additional wells in Texas and Louisiana, said Martin.
If successful, this strategy will also place the company in a position to accelerate its Australian programs and, through its connection with Assam Company, prepares it to pursue opportunities to acquire acreage in India.
Minter Ellison prepared the joint venture documentation and the various agreements to acquire the oil and gas concessions, and acted in connection with the IPO.
Upendra Joshi of the Mumbai office of Khaitan & Co and James Baker of Washington firm Baker Botts represented the Assam Company. “I had expected a real cultural challenge in this agreement between Texan and Indian investors,” said Martin. “However, it went very smoothly. We speak the same language and legal backgrounds are similar. The only problem was the time zones.”