AGL Energy Limited Annual Report 2012 109 2011 On 14 July 2010, AGL Energy Limited (AGL) and Mosaic Oil NL (Mosaic) entered into a Scheme Implementation Deed, under which AGL  proposed to acquire all of the issued shares in Mosaic by way of a Scheme of Arrangement (Scheme). Under the Scheme, Mosaic  shareholders could elect to receive either $0.15 cash per Mosaic share or 1.01 AGL shares for every 100 Mosaic shares. The Scheme was implemented on 20 October 2010, on which date AGL acquired 100% of the voting shares in Mosaic and obtained control.  The consideration paid was $142.6 million, and comprised an issue of equity instruments and cash. The fair value of shares issued was  determined using the published price at the date of exchange. 6,984,172 ordinary shares in AGL were issued on 20 October 2010 at a  closing price of $16.61. Mosaic’s principal activities are the production of, and development and exploration for, oil and gas. Mosaic’s main producing assets are  located in the Surat-Bowen Basin in south-east Queensland. Mosaic operates fields and discoveries in 10 petroleum leases, owns and  operates the Silver Springs processing facility, and now owns 100% of the Wallumbilla LPG plant and associated pipeline. Mosaic holds  varying interests in exploration permits in the Surat-Bowen Basin, Cooper-Eromanga Basin south-west Queensland and New Zealand’s  Taranaki Basin. Mosaic also has a 33.3% interest in an oil storage tank and unloading facility at Lytton in Brisbane. AGL carried out a comprehensive review of Mosaic’s businesses and assets to determine which were core and non-core to AGL’s integrated  energy strategy going forward. AGL has disposed of Mosaic’s interest in the exploration permit in the Carnarvon Basin offshore Western  Australia and is in the process of selling Mosaic’s interests in the exploration permits in New Zealand’s Taranaki Basin. AGL has now completed the development of a gas storage facility at Mosaic’s depleted Silver Springs/Renlim gas fields in the Surat Basin. Acquisition-related costs amounting to $3.5 million were excluded from the consideration paid and were recognised as an expense in the  2011 financial year, within the ‘other expenses’ line item in the income statement. The fair value of the identifiable assets acquired and liabilities assumed at the date of acquisition were as follows: Assets acquired and liabilities assumed Mosaic  provisional fair  value on  acquisition  $m  Fair value  adjustment  $m  Mosaic adjusted  fair value on  acquisition  $m  Current assets Cash and cash equivalents 21.5  –  21.5  Trade and other receivables 5.9  –  5.9  Inventories 2.9  –  2.9  Other assets 0.6  –  0.6  Total current assets 30.9  –  30.9  Non-current assets Exploration and evaluation assets 19.8  –  19.8  Oil and gas assets 104.5  (20.0) 84.5  Property, plant and equipment 8.4  –  8.4  Deferred tax assets 23.9  (9.7) 14.2  Other assets 0.3  –  0.3  Total non-current assets 156.9  (29.7) 127.2  Total assets 187.8  (29.7) 158.1  Liabilities Trade and other payables 2.8  –  2.8  Provisions 2.3  2.3  Total current liabilities 5.1  –  5.1  Non-current liabilities Borrowings 0.3  –  0.3  Provisions 8.0  –  8.0  Deferred tax liabilities 31.4  (29.7) 1.7  Other liabilities 0.4  –  0.4  Total non-current liabilities 40.1  (29.7) 10.4  Total liabilities 45.2  (29.7) 15.5  Fair value of identifiable net assets acquired 142.6  –  142.6  Goodwill arising on acquisition –  –  –  Purchase consideration 142.6  –  142.6  Purchase consideration Fair value of shares issued 116.0  –  116.0  Cash paid 26.6  –  26.6  Total consideration 142.6  –  142.6 Acquisition of Mosaic Oil NL