Raven Energy Limited (ASX:REL) entered into a letter of Intent to acquire Xgas LLC from Xstate Resources Limited (ASX:XST) for $0.68 million on May 7, 2018. Under the terms of the agreement Xstate has agreed to divest its interests in the Dempsey project for upfront cash consideration of $0.5 million payable as follows i) a non refundable deposit of $0.035 million payable within five business days of execution of LOI and ii) the balance of $0.4 million payable on completion of the acquisition plus a deferred payment of $0.3 million in cash or Raven shares within 90 days of closing subject to a 12 month voluntary escrow period. As of May 10, 2018, Raven paid $35,000 non refundable deposit to Xstate. As on August 17, 2018, Raved paid a further of $20,000 non refundable deposit to XState. Xstate will be issued with approximately 139 million shares of Raven Energy at $0.0018 per share. Under the revised sales terms the remaining cash component of $0.4 million and share consideration of $0.81 million (AUD 0.25 million) will be payable by Raven to Xstate no later than October 31, 2018.

The acquisition is subject to due diligence and certain other conditions. The transaction is expected to close on July 15, 2018. However, in the event that the Acquisition does not complete by July 15, 2018, Raven has the option to extend completion by 45 days to August 31, 2018 for an additional non-refundable deposit of $0.35 million which is deductible from the final cash payment. As of July 13, 2018, Raven elected to exercise its option and extend the closing of acquisition to August 31, 2018 by paying $35,000. Proceeds from the sale will be utilized to fund Xstate's participation in the Alvares appraisal well, in which Xstate holds a 21% working interest.