Falcon Oil & Gas Ltd (AIM:FOG, TSX-V:FO) shares traded higher after it agreed to be bought out by exploration partner Tamboran Resources Corporation (ASX:TBN, NYSE:TBN, OTC:TBNRL) for £128 million (C$239.00 million), mostly in shares plus US$23.7 million in cash.
It comes as the Beetaloo project in Australia is again advancing, and after the capital 'carry' that Falcon previously secured via farm-out had been spent. The AIM-quoted firm has self-funded its participation in the project since mid-2024.
The deal also precedes a new process of potential farm-outs and financing deals to pay for the next phase of development.
Having created value in the field and at the deal table, Falcon is now merging with its partner with the AIM-quoted firm's shareholders set to hold about 28% the newly enlarged group.
For each Falcon share they hold, shareholders will receive 0.00687 Tamboran shares, with the shares-plus-cash deal pitched at a theorehtical 19.7% premium to Falcon’s last closing price.
"Falcon shareholders will benefit from the increased exposure to the critically important pilot development currently underway in the Beetaloo. In addition, this transaction will remove any uncertainty around Falcon’s participation in the farmout of the Phase 2 Development Area," said Falcon chief executive Philip O'Quigley.
Tamboran interim chief executive Richard Stoneburner described it as "a logical consolidation"
"Strategically, we believe this Transaction will strengthen our ownership over the Phase 2 Development Area, where we are currently undertaking a farmout process with RBC Capital Markets," he said.
"This will allow us to sell down a larger position to a new partner while maintaining a material working interest over acreage," Stoneburner added.
"We recognise Philip and the Falcon shareholders for their work in identifying the opportunity of the Beetaloo Basin and bringing in key historic partners including Hess Corporation and Origin Energy to help de-risk the play.”
In London, Falcon shares were up 7% changing hands at 10.51p, valuing the firm at just over £100 million. At this level, the small-cap share is up around 136% over 2025 to date.