Beach Energy in $73 million Impress Energy buyout

Adelaide-based Beach is offering 8.25c per Impress share, compared with the company's closing price on Friday of 6.8c.

The bid has the unanimous support of the Impress board, in the absence of a superior offer.

The Impress directors will also commission an independent expert's report to advise on whether the transaction is in the interests of all shareholders.

Beach will fund the buyout entirely out of cash. The company had $207.5 million in cash reserves at the end of September.

Beach said the acquisition is in line with its aim to double oil and gas production and reserves over the next two to five years.

Managing director Reg Nelson said the deal would add to Beach's assets on the Western flank of the Cooper Basin, in far north South Australia.

"Merging with Impress, which holds permits adjacent to ours in the Cooper Basin, is a logical incremental step in achieving that through both exploration and development targets," Mr Nelson said.

"Beach currently operates 19 oil fields in the Cooper and Eromanga basins with five gas discoveries awaiting development and owns an approximate 21 per cent interest in the Cooper Basin project operated by Santos, while Impress has three producing fields and four oil discoveries jointly operated by Victoria Petroleum.

Impress Chairman Mr Eddie Smith said the transaction offered a substantial premium to the historical trading price of Impress.

"As a board, we believe this proposal represents very good value for our shareholders, particularly in light of the significant new Cooper Basin funding requirements that lie ahead for Impress as a stand-alone company" said Mr Smith.

"We recommend that shareholders should vote in favour of the scheme in the absence of a superior proposal and subject to receiving a favourable independent expert's report."

There is a break fee of $730,000, payable to Beach, in case of a breach of current agreements by Impress and its directors.