Shares in the geothermal explorer bounced 2¢, or 11 per cent, on Tuesday after the company said it had reached an agreement to buy a geothermal exploration company for $14.8 million in scrip.

Panax said the merger with the unlisted Osiris Energy would "substantially enhance the likelihood of success" in the development of its flagship limestone coast geothermal project in South Australia's Otway Basin.