3Legs Resources plc Notice of EGM and Shareholder Circular (9537A)

TIDM3LEG

RNS Number : 9537A

3Legs Resources plc

27 March 2013

For Immediate Release

27 March 2013

3Legs Resources plc

3Legs Resources plc ("3Legs" or the "Company") announces details of an Extraordinary General Meeting and the posting of a Circular to Shareholders

The Board unanimously recommends Shareholders to vote AGAINST all proposed resolutions

Following the request from Singer Nominees Limited, as nominee for Damille Investments II Limited ("Damille"), to convene an extraordinary general meeting (the "Extraordinary General Meeting" or the "EGM") to propose resolutions (the "EGM Resolutions") for the removal of four of the six existing Directors, the appointment of two representatives of Damille as Directors and the adoption of a new investment objective for the Company, namely, to manage the realisation of the Company's existing assets and to restrict new investments by the Company, the Company yesterday posted to Shareholders a Notice of Extraordinary General Meeting and a Circular containing the 3Legs' Board of Directors' recommendation to vote against the EGM Resolutions and its reasons for such recommendation.

The Board unanimously recommends that Shareholders vote AGAINST all of the EGM Resolutions for the following reasons:

The Board firmly believes that there is significant value to be unlocked in the Company's Baltic Basin concessions. The Board is focussed on two key areas:

   1)        Maximising the potential and value of the Baltic Basin concessions

a. Pursuing the planned drilling and testing programme over the next year, investing alongside our co-venture partner ConocoPhillips, one of the world's largest publicly quoted oil and gas companies;

b. Retaining sufficient technical and operating capability to enable us to make informed decisions to properly manage our interest in the Baltic Basin concessions;

c. Maintaining the local and industry relationships necessary to successfully progress a Polish shale venture.

2) Minimising the Company's costs; our current cash balance is a key asset and will be deployed prudently

   a.    Cessation of pursuing new ventures; and

b. Reduction of cash G&A costs by approximately 50%, so that our focus is purely on unlocking the upside potential of our Baltic Basin concessions.

The Board believes this strategy offers Shareholders the greatest chance of realising the upside potential from the Baltic Basin concessions whilst preserving cash. Following the planned drilling programme (estimated cost GBP11 million), the Company will review its Polish operations and, in light of the results, consider all options, including a return to Shareholders of the remaining cash (currently projected to be approximately GBP26 million as at 30 June 2014).

Furthermore, if shareholders choose to vote for the EGM Resolutions proposed by Damille, the Board:

1) Has concerns over whether Damille's representatives have any interest in retaining the Baltic Basin concessions. The Board believes that:

a. Damille does not have the desire to understand and unlock the value from the Baltic Basin concessions; and

b. Damille will focus on winding down operations of the Company and returning cash to shareholders, as it has done before in a number of similar situations.

2) Does not believe that the Damille representatives have the experience required to unlock the potential of the Baltic Basin concessions. The Board:

   a.    Has seen no evidence that Damille's representatives have any shale gas experience; and

b. Does not believe that Damille's representatives have the relationships required to pursue oil and gas operations in Poland.

Damille and its supporters are seeking to change the strategic direction of the Company without paying any control premium to do so.

The Board has received expressions of support from Shareholders representing approximately 48.5 per cent. of the Company's issued share capital indicating that they intend to vote AGAINST the EGM Resolutions. These Shareholders include institutions (BlackRock, J P Morgan Natural Resource Funds, Jupiter Asset Management and M&G); Directors; management; and founders of the Company (including Caithness Limited, as trustee for Robert Jeffcock). Robert Jeffcock initially identified the potential of the Baltic Basin and was the driving force behind the founding of the Company.

The Extraordinary General Meeting will be held at Mount Murray Hotel, Mount Murray Road, Santon, Isle of Man, IM4 2HT on 19th April 2013 at 12.30 p.m. (or as soon thereafter as the Annual General Meeting has concluded).

The Circular and Notice of Extraordinary General Meeting are also available to view on the Company's website (www.3legsresources.com).

For further information contact:

 
 3Legs Resources plc           Tel:    +44 1624 811 611 
 Kamlesh Parmar, CEO 
 Alexander Fraser, CFO 
 
 Jefferies Hoare Govett        Tel:    +44 207 029 8000 
 Simon Hardy 
 Jamie Buckland 
 Jason Grossman 
 
 Northland Capital Partners    Tel:    +44 207 796 8800 
 Louis Castro 
 Matthew Johnson 
 
 College Hill                  Tel:    +44 207 457 2020 
 Matthew Tyler 
 Catherine Wickman

This information is provided by RNS

The company news service from the London Stock Exchange

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