At the end of 2012, Eden Energy Discoveries Ltd. (TASE: EDN) paid $10.5 million for 8.7% of the share capital of Genesis Energy, which owns the rights to the Pelagic marine gas exploration licenses, in other words at a company value of $121 million for Genesis Energy. Even earlier, it was reported that Genesis Energy, through which billionaire Teddy Sagi holds five exploration licenses (42.5%), had hired the Canaccord investment house to raise $90-120 million on the London Stock Exchange.
Two years have passed, and Eden Energy is now reporting the acquisition of 85.9% of Genesis Energy for a mere $50, 000. One of the conditions for the deal is that when it is completed, Genesis will have a total of $50, 000 in cash. The seller in the deal is Teddy Sagi, who holds his share through Norisha, a private company under his control. His partners in the Ishai license, the first license through which the Pelagic partners carried out an unsuccessful drilling, have first refusal rights.
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Eden Energy will purchase shares amounting to 85.9% of Genesis Energy from Norisha, as well as all of Norisha’s owners’ loans in Genesis Energy. When the deal is completed, Eden Energy will own 94.6% of Genesis Energy, and all of the directors in Genesis Energy, except for those appointed by Eden Energy, will leave their positions. At the same time, all the agreements between Genesis Energy and Norisha and all the other companies controlled by Sagi will be canceled. When the deal is completed, Genesis Energy will have no debts to Norisha or other service providers.
Data attached to the announcement by Eden Energy show that as of the end of September, Genesis Energy’s total assets amounted to $1.2 million, while its liabilities totaled $38.8 millionj.
Eden Energy is on the TASE Maintenance List, and its market cap is only $512, 000.
The Ishai drilling relied on a probability of success estimated at 76% by Ryder Scott, which assessed the gas potential of the Aphrodite formation in the license area at 3.7 TCF.
In early 2013, however, a resources report made following the result of drilling showed that it contained only negligible quantities of natural gas. The announcement meant that the more than $100 million invested by Sagi and Benny Steinmetz, his partner in the Israel Opportunity explorations, had been lost. Incidentally, Sagi and Steinmetz acquired the Pelagic licenses from Prentis Tomlinson, a licenses speculator, for $17 million.
Published by Globes Israel business news – www.globes-online.com