Echelon Resources Limited (ASX: ECH) has announced the successful completion of its divestment from Cue Energy Resources Limited (ASX: CUE). This transaction, which saw Horizon Oil Limited (ASX: HZN) acquire Cue via an off-market takeover, finalises the settlement of a pre-bid agreement and Horizon’s subsequent takeover offer for Echelon’s remaining Cue shareholding. Echelon Resources Limited is an Australasia-focused energy commodity exploration and production company, headquartered in Wellington, New Zealand. The company manages a portfolio of wholly and partly owned onshore and offshore oil and gas assets across Australia and New Zealand.
As a direct result of this strategic move, Echelon has received both cash and scrip consideration under the takeover offer, marking its complete exit from Cue. Simultaneously, Echelon has emerged as a substantial shareholder in Horizon Oil, now holding approximately 6.64% of Horizon’s issued share capital. This manoeuvre has successfully realised significant value from Echelon’s long-term investment in Cue, while crucially maintaining exposure to the combined, larger energy business through its new stake in Horizon.
The cash proceeds generated from the divestment have been predominantly allocated towards the repayment of Echelon’s debt facility, a move that significantly strengthens the company’s balance sheet and enhances its overall financial flexibility. Chief Executive Officer Andrew Jefferies commented, “The successful completion of this transaction represents an important milestone for Echelon. It crystallises value from our investment in Cue while providing continued exposure to a larger, more diversified regional energy company through our shareholding in Horizon. The proceeds have also enabled us to reduce debt, further strengthening our balance sheet and positioning the Company well as we continue to execute our strategy.”
