Beach Energy Limited (ASX: BPT) offered on Monday $94 million to buy out all the issued and outstanding ordinary shares of Adelaide Energy (ASX: ADE) it does not already own.

The offer of Beach, which currently owns 19.95 per cent of Adelaide Energy, is equivalent to 20 cents per share which is a 51.5 per cent premium to the one month VWAP of Adelaide shares and 42.9 per cent to last trading price on Nov. 4.

Beach promised Adelaide shareholders who would sell on an on-market offer immediately would get cash for their shares in three working days.

"The takeover offer for Adelaide Energy represents a logical next step for Beach, and will remove ongoing funding concerns relating to Adelaide Energy for the Nappamerri Trough unconventional gas work program. It will consolidate Beach's landholding in the heart of the Cooper Basis where we are focusing out efforts on what is a significant shale and basin centred gas play," Beach Managing Director Reg Nelson said in a statement.

Beach, which will buy Adelaide Energy shares sold on the market until Dec. 22, is an oil and gas exploration and production company based in Adelaide. Aside from its current holdings in Adelaide Energy, Beach has business interests in over 300 exploration and production tenements mostly in Australia, Egypt, Tanzania and the U.S.

The company's cash balance is estimated at $100 million which are the proceeds of its sales of coal seam gas assets in Queensland to Arrow Energy in 2009 and purchase of oil firm Impress Energy in 2010 for $73 million.

In addition, Beach has $150 million option financing facility.

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