ANDAMAN Resources plans to acquire a public limited company involved in the exploration and production of oil and gas in the central Asian region.

The company has not been identified as the deal is subject to due diligence and contract. Also, Andaman is talking to other companies so the deal might not be concluded. However, if the deal goes ahead, it will, in effect, be a reverse takeover as the Asian company is substantially larger than Andaman which would lose control of the enlarged grouping.

The shares of the unidentified company are tradable but not listed. It is attracted to Andaman because of the London (and Irish) share listing.

Andaman said the company has had a number of approaches from companies with opportunities in the natural resources sector, some of which merit further investigation. Although heads of agreement have been signed with the Asian company, Andaman has stressed that it is not precluded from continuing to evaluate other situations which appear to represent an opportunity to expand the company's asset base and to offer the prospect of enhancing the value of shareholders.

Andaman has also announced an open offer of 29.76 million ordinary shares of 0.2p each sterling, at 0.5p, in the ratio of one new share for every existing share held. This will raise £127,000 net of expenses. The company has insufficient working capital and the proceeds of the offer will rectify this deficiency and enable it to investigate one or more of the approaches which it has received, according to Andaman. And if the results of such investigation prove positive "the directors will be able to conclude one or more transaction".

Andaman was incorporated in Northern Ireland in 1984 with the object of exploring for minerals. The first venture involved coal mining in Dungannon, Northern Ireland. In 1986, it entered into a 50/50 joint venture with Glencar in a gold prospect in Co Mayo. Following a promising test drilling, Newcrest, a major international mining company, became involved. But in 1990 the Mayo County Council imposed a ban on prospecting. And Newcrest decided not to proceed with the project.

This is now subject to litigation initiated by Andaman and Glencar, against both Mayo County Council and Newcrest, seeking damages. The cases against the two groups are expected to be heard later this year.