Energy XXI Acquisition Corp., a Bermuda corporation, is another SPAC that went public overseas. The underwriter for the deal was Sunrise Securities, which has participated in a number of blank check offerings in the U.S. Energy XXI, which was formed for the purpose of acquiring an energy company, went public on October 20, 2005 and raised gross proceeds totaling $300 million.
The Company successfully completed the Offering of $300,000,000. The first day of trading was 20 October 2005. However, not all conditions of the Offering were fully met until 31, October 2005. Therefore, the effective closing date of the Offering for accounting purposes has been established as October 31, 2005. The Offering consisted of the sale of 50,000,000 units ("Units"). Each Unit consisted of one share of the Company's common shares, $.001 par value, and two redeemable common share purchase warrants ("Warrants"). Each Warrant will entitle the holder to purchase from the Company one common share at an exercise price of $5.00…
On February 21, 2006, Energy XXI Acquisition signed an agreement to acquire Texas-based Marlin Energy Offshore:
On 21 February, 2006, the Company entered into a definitive agreement to acquire 100% of the membership interests in Marlin Energy Offshore, L.L.C. and Marlin Texas GP, L.L.C. and the limited partnership interests in Marlin Texas, L.P. collectively the ("Marlin Entities") for a total consideration of approximately $421 million (subject to adjustment at completion). The transaction is effective as of January 1, 2006 and is expected to close early in the second quarter of 2006. Completion of the acquisition, which constitutes a reverse takeover under the Alternative Investment Market ("AIM") Rules, is contingent upon shareholders' approval, financing and re-admission of the Energy XXI ordinary shares and warrants to trading on AIM. Simultaneous with signing the agreement, the Company placed a $500,000 earnest money deposit in escrow.
The Marlin Entities have interests in various oil and gas properties located on the Outer Continental Shelf in shallow waters of the U.S. Gulf of Mexico ("GOM") and onshore the U.S. Gulf Coast. Energy XXI, through the Marlin entities, will operate approximately 70% of the net proved reserves.
The acquisition will be funded with a portion of the cash proceeds from the placing conducted in October 2005 at the time of Energy XXI's admission and trading on AIM. The net placing proceeds, approximating $278 million, are held in a Bermuda Trust and release of such funds is conditioned on majority shareholder approval of the acquisition. Additionally, the Company has executed commitments letters with The Royal Bank of Scotland and BNP Paribas to arrange for $375 million of financing facilities of which an estimated $210 million is anticipated to be available at closing. The financing will be subject to customary conditions including finalizing commitments and subsequently entering into definitive agreements.
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The shares, which trade under the symbol EGY on the London Stock Exchange, closed at $5.45 on Friday.
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