Highlands Natural To Sell Helium Assets Into Opera Investments

It represent a significant opportunity to take advantage of a potentially significant helium resource, Highlands said. Highlands Natural Resources Plc has agreed to sell its helium assets to Opera Investments Plc (LON:OPRA) for £4mln. The deal will be structured as a reverse takeover, the consideration for the transaction will be paid in shares and Highlands will become a major shareholder in the enlarged group. Opera intends to raise £750,000 of new funding through a share placing. The helium interests, which comprise two licences in Montana referred to collectively as the Helios Two project, represent a significant opportunity to take advantage of a potentially significant helium resource, Highlands said. The company also highlighted the current global concerns around helium scarcity and noted recent helium price increases. Highlands also noted that analysis has confirmed elevated concentrations of helium which are similar to the Hugoton helium field, which is the largest natural accumulation of helium in the United States. Robert Price, Highlands chief executive, said: “This transaction reflects Highlands’ intention to generate value for shareholders from its exciting asset base in tandem with focussing on its DT Ultravert business that is looking to transform the global re-fracking business. “As a result of this transaction, Highlands would become majority shareholder in a company developing a potentially significant helium and natural gas business precisely as global concerns around helium scarcity rise. “Highlands has been able to develop the Helios Two project extremely efficiently, and now Highlands’ shareholders can benefit from value creation without any capital commitments.” Opera chairman Paul Dudley, meanwhile, said: “These heads of terms with Highlands move Opera one important step closer to acquiring a valuable development-ready asset. “Given broad concerns around helium scarcity and price increases, the Opera management team views the Helios Two assets as a highly compelling development opportunity that fits well with its existing strategy and core competencies. “This transaction has the potential to position Opera as one of the only publicly-traded investment vehicles offering shareholders dedicated exposure to helium assets.“ So far heads of terms have been signed for the proposed transaction. The deal remains conditional upon approval from Opera shareholders, as well as the appointment of new directors to the shell company’s board, a fundraising and due diligence. It is anticipated that Opera will pay Highlands a £20,000 per month fee for a year in return for expertise and management services. The proposed transaction sees Highlands receive new shares priced at 15p each. And at that level it values Opera’s pre-deal equity at around £2.5mln. It is anticipated that Opera will publish shareholder documents in relation to the deal in the summer, and a shareholder meeting will be convened thereafter. In the meantime, a competent persons report commissioned with RPS Knowledge Reservoir and that work is said to be already well advanced.

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