FORT WORTH, Texas, Dec. 16, 2015 /PRNewswire/ -- Lonestar Resources Limited (ASX:LNR) (OTCQX:LNREF) (the "Company") is pleased to announce that it is implementing a shift in its domicile from Australia to the United States and listing its shares on NASDAQ. Subject to shareholder and regulatory approvals, we expect this re-domiciliation and listing to become effective late March 2016.
The re-domiciliation of the Company will be achieved by Schemes of Arrangement ("Schemes") pursuant to which the Company's shareholders and option holders will exchange their securities in the Company for securities in Lonestar Resources US Inc., a newly incorporated Delaware company, once all approvals are secured.
Lonestar's Chief Executive Officer, Frank D. Bracken, III commented, "I am pleased to announce a definitive plan which the Lonestar Board believes can achieve significant benefits for our security holders that may include:"
- A change in domicile to the US is more appropriate considering that 100% of the Company's assets and operational management are in the US. Moreover, changing the domicile to the US simplifies merger and sale transactions that the Group may enter into in the future, from both a structuring and tax perspective.
- Listing on NASDAQ should increase the attractiveness of Lonestar to US investors who are more familiar with US unconventional oil and gas reserves, and have a deeper pool of capital to deploy to such assets.
- An improved valuation and better trading liquidity is expected for the shares of Lonestar US and should result in demand from US-based investors that do not traditionally invest in equities listed outside of the US.
- Current valuations for Eagle Ford Shale assets are materially higher for Lonestar's peers traded on US exchanges than for the Company, which trade on the Australian Securities Exchange ("ASX"). Applying these US-listed peer group multiples indicates a possible substantial lift in Lonestar's share price and market capitalization (although there can be no assurance as to the NASDAQ trading price of Lonestar US shares).
- Re-domiciling in the US and listing on NASDAQ will better align the Group's corporate structure with Lonestar's assets and management. Over the medium-term it should reduce the group's cost of capital and increase the attractiveness of the group to potential merger partners or acquirers.
As part of the re-domiciliation, Lonestar Resources US, Inc. is filing a registration statement on Form 10 with the US Securities and Exchange Commission ("SEC") before the end of 2015. Pending the SEC declaring the effectiveness of its Form 10 registration statement, Lonestar Resources US, Inc. will meet the requirements to obtain a listing on NASDAQ. Lonestar has reserved the trading symbol "LONE" with NASDAQ. Commensurate with the listing of the common stock of Lonestar Resources US on NASDAQ, the Company will cease to trade on the ASX.
FACTS ABOUT THE PLAN
A change in domicile to the US will be accomplished via Schemes of Arrangement, through which Lonestar Resources Ltd. shareholders and optionholders will exchange their shares and options for shares and options in a newly incorporated Delaware company, Lonestar Resources US Inc. Shares and options will be exchanged on the basis of one share/option in Lonestar Resources US, Inc. for every two shares/options held in Lonestar Resources, Ltd. Each security holder will retain virtually the same stake in Lonestar's assets and the implementation is expected to be accomplished on a tax-efficient basis for the Company and Australian shareholders. Key milestones in implementation include:
- A Scheme Implementation Agreement ("SIA") will be executed by Lonestar Resources, Ltd. and Lonestar US, Inc. which will be released to ASX. The SIA will contain conditions precedent to implementation of the Schemes, which will include standard matters such as Court and regulatory approvals, as well as NASDAQ approval for listing of Lonestar Resources US, Inc. shares. The option schemes will be conditional upon approval of the share scheme, but the share scheme is not conditional upon approval of the option schemes.
- Formal documentation related to the transaction will be contained in a Scheme Booklet that will be lodged with the Australian Securities and Investment Commission ("ASIC") in the coming days.
- The Board has engaged an Independent Expert to assess if the Schemes are in the best interests of shareholders. The Independent Expert Report and notices for the Scheme meetings will form part of the Scheme Booklet. Detailed information regarding the Schemes will also be included and security holders are encouraged to read the Scheme Booklet carefully. The Board intends to unanimously recommend that security holders vote FOR the Schemes relevant to them subject to (i) the Independent Expert opining that the Schemes are in the best interests of security holders and (ii) in the absence of any superior proposal.
- Shares will be exchanged on the basis of one share in Lonestar Resources US, Inc. for every two shares held in the Company and there will be no material change to shareholders' economic interest in Lonestar's assets. A Scheme Booklet will be distributed to security holders who will be asked to vote on whether to adopt the Schemes. To assist security holders, the Board has engaged an Independent Expert to opine whether the Schemes are in their best interests.
- At about the same time, Lonestar Resources US, Inc. will file a registration statement on Form 10 with the US Securities and Exchange Commission ("SEC") in order to register its common stock under the US Securities Exchange Act of 1934 in order to enable a listing on NASDAQ.
- In January 2016, Lonestar Resources US, Inc. will submit its listing application to NASDAQ and has already reserved the ticker symbol "LONE".
- A first Court Hearing for the Scheme of Implementation has been scheduled with the Federal Court of Australia for early February 2016.
- Shareholders and option holders in Lonestar are expected to be invited to vote on the Schemes of Arrangement in March 2016. An affirmative vote of 75% by value of securities voted, as well as a majority of those security holders who vote, is required to approve each share and option Scheme. Importantly, the Lonestar Board intends to unanimously recommend that security holders vote in favor of each of the Schemes, subject to the opinion of the Independent Expert and subject to there being no superior proposal.
- Subject to shareholder approval of the Scheme in relation to Lonestar shares, declaration by the SEC that Lonestar's Form 10 is effective, and approval of its listing application by NASDAQ, shares of Lonestar Resources US, Inc. are expected to begin trading on NASDAQ and Lonestar will be delisted from the ASX shortly after implementation of the scheme.
- In order to ensure an orderly market, Lonestar shareholders who do not wish to invest in Lonestar US may be offered a facility to sell their Lonestar US shares (subject to the Lonestar board being able to arrange a facility on acceptable terms).
ABOUT LONESTAR RESOURCES
Lonestar Resources is headquartered in Fort Worth, Texas and is focused on the crude oil/condensate window of the Eagle Ford Shale of south Texas. Notwithstanding weak oil prices, Lonestar is on course to achieve its original guidance for 2015 EBITDAX of $84 to $95 million and to deliver year-over-year production growth exceeding 35% in 2015, with forecasted production volumes of 6,100 to 6,300 BOE per day. Its drilling budget is designed to be broadly covered by operating cash flows, which should be well-protected, as over 50% of forecast 2016 oil volumes are hedged at an average price of US$77.13 per barrel. Further, its banking facilities provide US$101 million of available liquidity.
This announcement has been prepared for publication in Australia and may not be released in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities described in this announcement have not been registered under the US Securities Act of 1933 and may not be offered or sold in the United States absent registration or in transactions exempt from registration under the US Securities Act and applicable US state securities laws.
Cautionary & Forward Looking Statements
This Announcement includes forward-looking statements. These statements relate to Lonestar's expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like "anticipate", "believe", "intend", "estimate", "expect", "may", "plan", "project", "will", "should", "seek" and similar words or expressions containing the same or similar. These forward-looking statements reflect the Company's views and assumptions with respect to future events as of the date of this Announcement and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond Lonestar's ability to control or predict. Given these uncertainties, no one should place undue reliance on any forward-looking statements attributable to Lonestar, or any of its affiliates or persons acting on its behalf. Although every effort has been made to ensure this report sets forth a fair and accurate view, Lonestar disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Lonestar Resources Limited