Beach Energy Limited (ASX:BPT) to Consolidate Cooper Basin Assets Via Merger with Impress Energy Limited (ASX:ITC)

Adelaide, Nov 22, 2010 AEST (ABN Newswire) - Beach Energy Limited (ASX:BPT) (PINK:BEPTF) and Impress Energy Ltd (ASX:ITC) are pleased to announce they have agreed, subject to shareholder approval, to merge the two companies through a Scheme of Arrangement.

The merger further consolidates Beach's position as the largest Mid Cap player in the Cooper Basin and is in line with Beach's stated growth strategy to double production and reserves in 2-5 years.

Under the Scheme to be approved by Impress shareholders at a general meeting of the Company, Beach will acquire all of the issued shares in Impress that it does not own at 8.25 cents per share cash, valuing Impress at approximately A$73.1 million. Beach intends to fund the transaction from existing cash reserves. As at 30 September 2010, Beach had A$207.5 million in cash reserves.

The offer represents a 35.9% premium to the 1 month Volume Weighted Average Price ("VWAP") of Impress shares of 6.1 cents and a 47.3% premium to the 2 month VWAP of 5.6 cents.

The merger allows Impress shareholders to receive a significant premium for their shares. Subject to the Scheme being approved, Beach will assume the significant funding obligation required to develop Impress's Cooper Basin assets and the risks associated with the development of the Company's exploration portfolios.

For Beach, the transaction builds the Company's already strong presence in the Cooper Basin, growing its portfolio of oil and gas exploration and production assets.

Beach also proposes to use the Impress merger as a springboard to accelerate development of Cooper Basin assets in conjunction with existing partners.

Securing additional acreage in key western flank permits is a strategic imperative for Beach and this merger is expected to have positive implications for reserves, production protection and growth over the coming years.

Beach Managing Director Mr Reg Nelson said the acquisition of the Impress assets would provide a natural extension to the Company's portfolio of western flank Cooper Basin assets, in line with its strategy of consolidation in the region.

"We are aiming to double our production and reserves over the next two to five years," said Mr Nelson.

"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."

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

Impress Chairman Mr Eddie Smith said the transaction represented an outstanding opportunity for shareholders to realise the underlying value of their investment in cash at 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 standalone 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.

"The Impress Directors have also stated their intention to vote in favour of the Scheme for all of the shares they control."

Merger Implementation Agreement

A Merger Implementation Agreement (MIA) to be entered into by Beach and Impress establishes the method by which the companies agree to implement the merger.

Per the MIA, Impress will enter into a Scheme of Arrangement with its shareholders whereby:

- All Impress shares other than those held by Beach are transferred to Beach for 8.25 cents per share.

- The transaction values Impress at A$73.1 million.

- Nine Convertible Notes valued at A$50,000 each are to be acquired by Beach.

- All shareholder loans are to be repaid on the completion of the Scheme.

- The MIA is subject to Beach completing due diligence within 7 business days of the execution of the MIA.

- Impress is to use its best endeavours to ensure none of its representatives solicits, invites or encourages enquiries or negotiation from other parties and will immediately notify Beach of any approaches or enquiries.

- Impress agree to pay Beach a break fee of A$730,000, equal to 1% of the transaction value, if Beach terminates the transaction for material breach by Impress, if any Director withdraws his recommendation (other than where the Independent Expert concludes that the Scheme is not in the best interests of the Impress shareholders) and the Scheme is not implemented and a competing proposal is announced which is subsequently successful.

Key terms of the MIA are listed in more detail in Appendix A attached.

Option Agreements

In addition, entities associated with Mr Eddie Smith and fellow Impress Director Mr John Gillon have entered into option agreements with Beach under which the associated entities have granted to Beach options to acquire part of their shareholdings in Impress in certain circumstances at 8.25 cents per Impress share that would lift Beach's holding to 19.9%.

The terms of the option agreements are listed in Appendix A. (see link at the bottom of the release)

Convertible Notes

Beach also intends to acquire the nine Impress convertible notes on issue that are held by entities associated with Mr Smith. These will be acquired by Beach for consideration equal to the number of shares that the noteholders would receive on a conversion multiplied by 8.25 cents.

The convertible note acquisition will be effected through private agreements and will not form part of the Scheme.

Loan

An outstanding debt owed by Impress to Mr Smith in the amount of A$2.6 million will be repaid subject to the approval of the Scheme.

Beach's balance sheet remains strong and it has budgeted for an accelerated exploration spend in FY 2011, in line with market expectations for a more active year ahead for the Cooper Basin after heavy rains in 2010.

Adelaide Equity is acting as Corporate Adviser to Beach and Piper Alderman is acting as Legal Adviser to Beach.

Hardy Bowen is acting as Legal Adviser to Impress.

Indicative Scheme Timetable

- Scheme booklet lodged with ASIC for regulatory review: Early January 2011

- Scheme booklet dispatched to Impress shareholders: Late January 2011

- Impress scheme meeting: Late March 2011

- Court hearing to ratify Scheme: Early April 2011

- Payment to Impress shareholders: Late April 2011

* These dates are indicative and subject to change.

About Impress

Impress is an oil and gas explorer listed on the ASX. Its assets are primarily focused in the Cooper Basin where it has a 40% interest in four exploration permits, one petroleum retention license, and two production licenses. The permits are operated on behalf of a Joint Venture comprising Impress 40%, and Victoria Petroleum 60%. The permits and licences are prospective for oil and gas and host the Growler, Mirage and Ventura producing oil fields, the Wirraway, Warhawk, Tigercat and Snatcher oil discoveries, plus a comprehensive portfolio of prospects and leads covering the whole spectrum of exploration targets. Impress also has a 10% free carried interest in a number of nickel tenements in Western Australia acquired during its life as a mining company in the mid 1990s.

For the full announcement including Appendix A, please refer to the following link:

http://www.abnnewswire.net/media/en/docs/64231-ASX-BPT-180602.pdf

Contact

Mr Reg Nelson Managing Director Beach Energy Tel: +61-8-8338-2833