History
Tipperary sold its Texas and Colorado assets to focus on Queensland's Comet Ridge gas, settled a title dispute, then was bought by Santos for $7.43 a share in 2005.
2002-2003: Selling US assets to build up Comet Ridge
In 2002 Tipperary set about concentrating on the Comet Ridge coal seam gas project in Queensland, Australia. On May 24, 2002 it sold its West Buna field interests in Texas, its only remaining domestic producing asset, to Delta Petroleum for $4.1 million cash. It then bought Delta's 5% interest in Comet Ridge for $5.25 million, made up of $4.8 million cash and 250,000 unregistered shares valued at $450,000. That lifted its capital-bearing interest to 70%. It also gained an option on interests in six other exploration permits with no proved reserves, and agreed to assume up to $600,000 of Delta's obligations. The company expected a $1.297 million loss on the sale.
On November 27, 2002 it sold Kerr-McGee 75% to 80% interests in 230,000 undeveloped acres in eastern Colorado for $4.8 million, keeping the remaining 20% to 25%. Kerr-McGee was to operate, with exploration planned for early 2003, and Tipperary expected a $1.4 million gain. The record then goes quiet until 2004.
2004: Fresh money, a settled dispute and gas buyers
On September 23, 2004 Tipperary sold 2,000,000 new unregistered shares at $4.00 each, about $8 million, to eleven unaffiliated institutional investors, diluting existing holders. The filing did not say what the money was for.
On October 30, 2004 it agreed to settle the Comet Ridge litigation with Tri-Star Petroleum. Tri-Star would transfer title to all project tenements plus its 2.25% working interest, keeping a 1.5% overriding royalty, for $5 million. That would confirm Tipperary's subsidiary as operator with majority title. The deal needed Australian government consents within 45 days, or either side could void it and resume litigation. Whether it closed was never confirmed in the record.
In December 2004 the Australian subsidiary signed two gas sales contracts: an extension with Energex from June 1, 2005 for 23 months, and a new 10-year contract with Orica from June 26, 2006. Tipperary and its subsidiaries held a 71.7% pre-royalty interest in Comet Ridge production.
2005: Slough exits and Santos takes over
On February 22, 2005 Tipperary hired Houlihan Lokey to advise on the intended exit of its major holder, Slough Estates USA. The answer came on July 1, 2005, when Santos agreed to acquire the company for $7.41 per share in cash, about $466 million including debt. On July 4 the deal was amended, raising the price for minority shareholders to $7.43 while Slough accepted $7.39 for its roughly 54% stake.
Santos completed the Slough purchase on July 13, 2005 for about $222.7 million, including Slough's 10% interest in the Australian subsidiary and its position as lender. Two Slough directors were replaced by Santos-linked ones, and Santos committed to fund working capital and approved capital spending through April 2006. There were 41,360,994 shares outstanding at July 12.
A proxy statement set a shareholder vote for October 27, 2005, needing two-thirds approval. Santos's shares, 56.2% of votes, and management's 169,786 shares were committed in favour. Directors were to receive about $6,000,000 plus indemnification.
The merger closed on October 28, 2005. Holders of about 18.9 million shares were entitled to $7.43 cash each, without interest. The stock was delisted from the AMEX and a Form 15 ended registration on November 1. All former directors and officers left; Kathleen Hogenson, who became President, and Benjamin Bates became directors. As of November 2, 2005 Tipperary was a wholly-owned subsidiary of Santos, holding about 623,000 acres of US prospects and a 75.25% capital interest in Comet Ridge.
Written from the 16 story beats below (2002 to 18 Nov 2005), which come from the company's own announcements and filings.