North Sea explorer Elixir Petroleum hopes to follow its merger with imminent producer Gawler Resources with deals in new areas.

Russell Langusch, the Australian managing director of AIM-quoted Elixir, says the Gawler acquisition, to be achieved issuing Elixir shares, will create a group with a market value of nearly £20 million, against Elixir’s depressed £8.15 million today. He says the company is poised to add ‘another leg’, maybe through another corporate deal, to take it into Eastern Europe, North Africa and elsewhere in America.

Gawler’s High Island 30 per cent-owned gas project in the Mexican Gulf is poised to start production any day now. Therefore, Langusch hopes acquiring the company will make it easier for Elixir to raise money from a stock market that now tends to shun pure exploration plays in favour of companies with producing assets.

Elixir, which has already bought 20 per cent of Gawler for £1.1 million and lent it £2 million to pursue its productive interests, hopes the merger will win shareholders’ support and court approval by late October. Langusch says the company, which secured £2.3 million at 8p and 14.5p before raising £7 million at 24p in 2005’s AIM float, still has £1.5 million in the bank and plans to finance High Island through project finance.

He envisages cash flow from the Gulf of Mexico helping Elixir develop its North Sea interests. Chief among these at present is the 56 per cent-owned Leopard project, where German electrical giant RWE has 30 per cent.

Elixir shares, which hit 46p in early 2006, fell to 8.25p in April after a dry well in the North Sea. Now 11.25p, valuing the company at £8.15 million, their appeal is speculative.