High Peak Royalties Limited (ASX:HPR) entered into a sale and purchase agreement to acquire Planet Gas USA Inc. from Planet Gas Limited (ASX:PGS) for $2.8 million on October 15, 2018. Under the terms of consideration, High Peak Royalties will pay $1 in cash and will assume $2.75 million debt of Planet Gas USA, currently owed to Macquarie Bank Limited. The transaction includes 3% royalties on over 2000 producing wells in Kansas, Pennsylvania and the State of New York.

The transaction will be funded from the current cash reserves. On October 17, 2018, High Peak received commitments from sophisticated and professional investors to subscribe for up to 25 million new fully paid ordinary shares to raise AUD 1.25 million ($0.89 million). Proceeds from the placement may be used to pay down of a portion of the debt assigned to High Peak as part of its acquisition of Planet Gas USA Inc. The remaining funds will be used to strengthen the Company's balance sheet.

The transaction is subject to the approval of the shareholders of Planet Gas Limited, due diligence, finalizing approvals and documents with Macquarie Bank. The shareholders of Planet Gas Limited approved the deal on December 6, 2018.