Pelican Acquisition Corporation, a Cayman Islands exempted company formed as a special purpose acquisition company, today announced that it has entered into a non-binding letter of intent (“LOI”) with Greenland Exploration Limited (“Greenland Exploration” or “GEL”) to pursue a potential business combination.
Greenland Exploration is a Texas-based special purpose vehicle focused on developing strategic interests in North American energy assets. Greenland Exploration has an agreement that will allow it to invest up to $70 million in the Jameson Land Basin, where it’s partner March GL Company has rights through a drill in program to over 2 million acres on the island of Greenland. According to March GL Company, over $200 million has been invested to date by major oil companies (including ARCO) to develop oil reserves in the Jameson Land Basin. A 2007 estimate from the U.S. Geological Survey suggests that Greenland contains approximately 31.4 billion barrels of oil equivalent, including oil, gas and natural gas liquids. Taking this fact into consideration, coupled with recent US prerogatives to designate Greenland as a strategic defensive location, Pelican believes the proposed transaction with GEL could present an extraordinarily unique and attractive opportunity for its shareholders.
Under the preliminary, non-binding terms, the parties are exploring a potential share-for-share exchange in which Pelican would acquire 100% of the issued and outstanding equity of GEL. While the structure remains subject to further negotiation and due diligence, the LOI contemplates an exchange ratio of one Pelican share for each GEL common share which would result in the issuance of 21.5 million shares of Pelican. In addition, March GL Company may receive certain equity exchange rights based on a notional valuation of $200 million, assuming a $10.00 per share value for Pelican, subject to final structuring and definitive documentation.
“This letter of intent represents an exciting first step in our strategy to bring valuable energy assets to the public markets,” said Robert Labbe, Chief Executive Officer of Pelican. “We believe Greenland Exploration’s potential access to strategic reserves in an underexplored region makes it a promising partner for long-term growth.”
“We are very pleased to enter into this LOI with Pelican as we pursue a public market strategy to develop one of the world’s most significant untapped hydrocarbon basins,” said Larry G. Swets, Jr., Chief Executive Officer of Greenland Exploration. “We look forward to working closely with Pelican to evaluate this opportunity.”
The LOI provides for a 30-day exclusive negotiation period, during which the parties will work in good faith toward executing a definitive agreement. The transaction remains subject to, among other things, execution of definitive agreements, completion of due diligence, approval of the boards and shareholders of the respective parties (if applicable), and regulatory and other customary conditions.
As part of the contemplated deal structure, Pelican’s sponsor would forfeit founder shares such that post-transaction, its founder equity would equal 25% of the shares issued in its IPO. The current structure under discussion does not include a minimum cash condition from Pelican’s trust account for the transaction to close.
ThinkEquity is acting as advisor to Greenland Exploration and EarlyBirdCapital is acting as advisor to Pelican on the transaction.
Discover the latest trends and insights—explore the Business Insights Journal for up-to-date strategies and industry breakthroughs!
