Asiaons Capital, one of three penny stocks battered by a share price plunge in October, has salvaged a major deal threatened by the price collapse.

The private equity firm is proceeding with the deal to buy a stake in a Texan oil and gas firm, though on a more modest scale.

Asiasons said yesterday it has inked a non-binding deal, this time to buy a 20 per cent stake, down from a 27.5 per cent stake before, in Black Elk Energy Offshore Operations.

Acquisition of the stake in the Houston-based firm will cost US$96.4 million (S$121 million).

"This deal gives us a global stage to look at assets across the world. It's a first step to branch out of the Gulf of Mexico and the United States," Mr David Levy, deputy chief investment officer of Platinum Partners, a hedge fund and controlling shareholder of Black Elk, told The Straits Times in an exclusive interview.

Also at the interview were Black Elk Energy president and chief executive John Hoffman, deal adviser Jett Capital's Mr Stephen Silver and Asiasons managing director Jared Lim, who were here to renegotiate the deal.

The revised deal values Black Elk, with assets mainly in the Gulf of Mexico, at US$482 million, lower than the US$625 million valuation struck in the earlier deal announced in September this year.

"This is the longest three months of our lives. Jared had reasons why he needed to push (Black Elk) valuations down and we focused on the big picture of wanting to get Black Elk to the Singapore market, so we took a lower valuation," said Mr Silver.

The deal involves a cash payment of US$45 million. Asiasons will issue a two-year promissory note to Black Elk's sellers and issue 494.23 million new Asiasons shares at 13 cents per share.

Shares of Asiasons climbed two cents, or 16 per cent, to 14.3 cents on resumption of trading yesterday after being halted since Monday pending the announcement.

It may have been its biggest percentage gain in five weeks, yet it is far from the dizzying heights of $2.83 it had scaled on Oct 1, just days before it crashed.

The Oct 4 price crash led to an unprecedented two-week Singapore Exchange trading suspension. LionGold Corp and Blumont Group were also hit.

The deal's originator, Mr Silver, said the sharp plunge in Asiasons' shares may have changed the terms of the deal but little else. "We wanted to do the deal... just on different terms," he said.

Still, the deal has its fair share of sceptics, partly as Black Elk is still reeling from a financial fallout from last year's fatal explosion at one of its production platforms in the Gulf of Mexico.

"What happened over the past year is very unfortunate but we had one incident and we don't think it should colour the entire business," said Mr Levy.

Mr Hoffman, an industry veteran who founded Black Elk in 2007, said following a "rejuvenation" exercise, the firm, which suffered losses last year, is expected to return to the black for the financial year ending this month.

For Asiasons, the business case to buy into Black Elk, which produces some 14,000 barrels of oil per day, was always crystal clear.

"The easiest thing to do would have been to walk away from the deal and hope all the media speculation would go away. But we had a duty to look through the noise and assess every opportunity and we believe this is a value accretive deal," said Mr Lim.