TIDMARG
RNS Number : 1897Y
Argos Resources Ltd
03 May 2023
This announcement contains inside information
ARGOS RESOURCES LIMITED
("Argos", the "Group" or "the Company")
Proposed Sale of North Falkland Basin Interests to JHI
Associates Inc
Proposed Cancellation of Admission to Trading on AIM
and
Notice of General Meeting
On 15(th) December 2022, Argos Resources Limited (AIM: ARG.L),
the Falkland Islands based exploration company focused on the North
Falkland Basin , announced that the Company and JHI Associates Inc.
("JHI"), a private company incorporated in Ontario, Canada, had
entered into an agreement pursuant to which it is proposed that JHI
will acquire Argos' PL001 Production Licence interests in the North
Falkland Basin (the "Disposal").
The Board is pleased to report that the Company has now entered
into the Licence Acquisition Agreement (LAA) pursuant to which the
Licence (and related assets) will be transferred from Argos
Exploration Limited (AEL), the Company's 100% owned subsidiary in
which the Licence is held, to the purchaser subject to, inter alia,
the approval of the Company's shareholders. As consideration for
the Licence, the Company is to be issued with 8,467,820 JHI Common
Shares credited as fully paid and GBP303,500 in cash (of which a
non-refundable payment of GBP151,750 has already been made).
As the Licence is the Company's principal asset, upon completion
of the Disposal the Company will be regarded as an AIM Rule 15 cash
shell, having ceased to own, control or conduct all or
substantially all, of its existing trading business, activities or
assets. The Disposal is therefore conditional on the consent of
Shareholders at a general meeting of the Company.
Assuming completion of the LAA, the Company's sole asset would
be its holding of JHI Common Shares. The Directors have concluded
that in this scenario it is in the best interests of the Company
and its Shareholders to seek Shareholder approval for cancellation
of the admission of the Ordinary Shares to trading on AIM.
Shareholder approval for the Disposal and Cancellation will be
sought at a general meeting of the Company to be held at The
Chamber of Commerce, West Hillside, Stanley, Falkland Islands at 5
pm (Falkland Islands time) on 26 May 2023.
In the event that Shareholder approval for the Disposal and
Cancellation are obtained, it is the intention of the Board that
the Company should then be wound up by way of a members voluntary
liquidation. The Company has agreed with certain creditors of the
Company to settle those liabilities in JHI Common Shares (up to
approximately 475,000 JHI Common Shares). Thereafter, approximately
8 million JHI Common Shares are expected to be available for
distribution to Shareholders pro rata to their holding in the
Company at that time.
A copy of the Circular containing more information regarding the
Disposal, Cancellation and Notice of General Meeting will be posted
to Shareholders on 4 May 2023 and will be available on the
Company's website www.argosresources.com shortly.
A summary of the key information contained in the Circular,
including a timetable of events, is set out below.
For further information:
Argos Resources Ltd (+500 22685)
www.argosresources.com
Ian Thomson, Chairman
John Hogan, Managing Director
Cenkos Securities plc, Nomad & Broker (+44 131 220 6939)
Derrick Lee
Neil McDonald
Proposed disposal of the Licence, cancellation of admission of
Ordinary Shares to trading on AIM, and Notice of General
Meeting
1. Introduction
On 15 December 2022 the Company announced that it had reached
preliminary agreement with JHI for JHI to acquire the Group's sole
principal asset - offshore production licence PL001 in the North
Falkland Basin and related data.
Today, we are pleased to report that the Company has now entered
into the Licence Acquisition Agreement (LAA) for the Buyer to
acquire the Licence (and related assets) from AEL for a
consideration of 8,467,820 JHI Common Shares to be issued to the
Company credited as fully paid and GBP303,500 in cash (of which a
non-refundable payment of GBP151,750 has already been made).
Completion of the LAA is scheduled to take place on or around 31
May 2023, with a long stop date of 28 June 2023, subject to:
-- Falkland Islands Government consent to the transfer of the Licence by AEL to the Buyer; and
-- Shareholder consent as referred to below.
The JHI Common Shares to be issued to the Company would
represent some 9.68% of the enlarged issued capital of JHI as at
the date of the Circular and are expected to represent between
approximately 7.21% and 6.01% of JHI's enlarged share capital on a
fully diluted basis depending on the outcome of the Plan of
Arrangement JHI is currently undertaking.
JHI is a private limited company incorporated in Ontario,
Canada. JHI's principal asset is a 17.5% interest in the Canje
Block, offshore Guyana, which is operated by Esso Exploration &
Production Guyana Ltd (35%), a subsidiary of ExxonMobil Corp. JHI's
partners in the Canje Block are TotalEnergies E&P Guyana BV
(35%) and Mid-Atlantic Oil & Gas Inc (12.5%).
The Canje Block is a large and significant licence area adjacent
and immediately east of multiple ExxonMobil discoveries in the
Stabroek block. Covering approximately 4,800 square kilometres, the
Canje Block is located approximately 180 to 300 kilometres offshore
Guyana in water depths ranging from 1,700 to 3,000 metres. Over
7,000 square kilometres of 3D seismic data has been shot over the
Canje Block, from which over three dozen prospects have been mapped
in four proven plays in the Lower Tertiary and Upper Cretaceous
confined channels, Lower Cretaceous carbonate structures and, with
the recent drilling of Sapote-1 well and Stabroek discoveries
including Fangtooth SE-1, the block now offers the opportunity of
yet deeper prospectivity.
As of 31 December 2022, JHI's unaudited consolidated financial
statements indicated gross assets of approximately USD24,375,839,
of which approximately USD18,919,157 is cash or cash equivalents,
with no debt. The Company understands that JHI's sole purpose is
its participation in the Canje Block and that it has no other
significant assets or interests.
Further information on JHI can be found at
www.jhiassociates.com. ([1])
Since the Licence is the Company's principal asset, the Disposal
will result in a fundamental change in the business of the Company
for the purpose of Rule 15 of the AIM Rules and it is therefore
conditional upon the approval of Shareholders, amongst other
matters. Shareholder approval for the Disposal will be sought at a
general meeting of the Company to be held at The Chamber of
Commerce, West Hillside, Stanley, Falkland Islands at 5 pm
(Falkland Islands time) on 26 May 2023. The notice convening that
General Meeting is set out at the end of the Circular. The actions
that Shareholders should take to vote on the Disposal Resolution
and the recommendations of the Board are set out below.
Assuming completion of the LAA, the Company's sole asset would
be its holding of JHI Common Shares. The Directors have concluded
that in this scenario it is in the best interests of the Company
and its Shareholders to seek Shareholder approval for cancellation
of the admission of the Ordinary Shares to trading on AIM, for the
reasons set out in the Circular. In accordance with Rule 41 of the
AIM Rules, the Company has notified the London Stock Exchange of
the date of the proposed Cancellation which is expected to be on 6
June 2023.
Accordingly, the Company is also seeking Shareholders' approval
for the Cancellation which is conditional upon the consent of not
less than 75 per cent. of the votes cast by Shareholders (whether
present in person or by proxy) at the General Meeting. If the
Cancellation Resolution is passed at the General Meeting, and
assuming completion of the LAA on or around 31 May 2023, it is
anticipated that the Cancellation will become effective at 7 a.m.
on 6 June 2023.
If the Cancellation proceeds, Shareholders who wish to buy or
sell the Company's Ordinary Shares on AIM must do so prior to the
Cancellation date, which is expected to be 6 June 2023 (with the
last date for trading being 5 June 2023).
Assuming completion of the LAA and the Cancellation, the Board
has concluded that it would be in Shareholders best interests for
the Company to be wound up and for the JHI Common Shares to be
distributed proportionately to the Company's shareholders on the
register of members at the relevant time. Shareholders will be
written to separately on this in due course to provide further
details and to seek Shareholder approval at a further general
meeting of the Company for the Company to be wound up and a
liquidator appointed.
Shareholders should be aware that following the Cancellation
there will be limited opportunities to trade in JHI Common Shares
as JHI is a private company whose shares are not listed on any
stock exchange. Furthermore, any transfer of JHI Common Shares will
be subject to the approval of the board of directors of JHI in
accordance with JHI's constitutional documents.
JHI's management has confirmed to the Board of ARL that it is
their intention to complete a liquidity event concerning JHI within
5 years of Completion, however there is no guarantee that a
liquidity event will take place within this period, or at all.
The purpose of the Circular is to provide Shareholders with the
background to, reasons for and details of the Disposal and
Cancellation and to explain why the Directors consider the Disposal
and Cancellation to be in the best interests of the Shareholders as
a whole.
2. Background to and reasons for Disposal
2.1 Background
The Company has had an interest in the Licence since 1997. In
2015 the Company assigned its interest in the Licence to Noble
Energy Falklands Limited and Edison International Spa
(Noble/Edison), for a participating interest in future income
streams from the Licence. Following a change in strategy by
Noble/Edison, Noble/Edison decided they wanted to exit their
investments in the Falkland Islands and assigned the Licence back
to AEL and the parties agreed to terminate the participation
agreement. The Company secured a 2-year extension to the Licence in
December 2022 (the Licence now continues until 31 December 2024).
However, during this extended period the Company is required to
carry out a work program for which it is not funded and there is no
certainty, in the Board's view, that capital to fund the work
program will be available to the Company. JHI has the cash reserves
to fund this work program and is enthusiastic as to the identified
prospects in the Licence area. It is the Board's view that
Shareholders' interests are best served by transferring the
Company's interest in the Licence to JHI in return for an equity
interest in JHI (and some cash) which would provide Shareholders
with an ongoing interest in the outcome of future work carried out
on the Licence, with upside potential through exposure to JHI's
interest in the Canje Block.
If the Resolutions are not passed, the Disposal will not
proceed. If the Board is unable to secure alternative funding to
cover the costs of the work program required under the Licence to
be completed by 31 December 2024 the Licence would be forfeited. In
light of this, if the Disposal was not to go ahead and alternative
funding could not be secured quickly, there is a risk that the
Board would feel obliged to wind up the Company.
2.2 Summary terms of the Disposal
Pursuant to the LAA, AEL will transfer its interest in the
Licence (and certain other assets) to the Buyer in return for a
cash payment of GBP305,500 (of which GBP151,750 has already been
paid as a non-refundable deposit) and the issue to ARL of 8,467,820
new common shares of no par value in the capital of JHI to be
issued credited as fully paid to ARL, subject to:
-- Falkland Islands Government consent to the transfer of the Licence to the Buyer; and
-- The Shareholders passing the Disposal Resolution at the General Meeting.
The JHI Common Shares to be issued to the Company would
represent some 9.68% of the enlarged issued capital of JHI as at
the date of the Circular. JHI are currently undertaking a Plan of
Arrangement , completion of which is subject to a Final Order of
the Ontario Superior Court of Justice. On (and subject to) receipt
of the Final Order the JHI Common Shares to be issued to the
Company are expected to represent up to approximately 7.21 % of the
enlarged issued capital of JHI. If the Plan of Arrangement was not
to complete, the JHI Common Shares to be issued to the Company
would still represent some 9.68% of JHI's enlarged issued capital
(or 6.01% of the enlarged capital on a fully diluted basis).
[2]
ARL is providing the Buyer with standard representations and
warranties, primarily relating to the Licence. Any warranty claims
by the Buyer may in ARL's option, be settled in JHI Common Shares
at a value of USD 0.71 per JHI Common Share.
JHI value the JHI Common Shares at USD 0.71 each, which equates
to USD 6,012,152 for all the JHI Common Shares to be issued to the
Company pursuant to the LAA (GBP0.582 per JHI Common Share and a
total of GBP4,928,271 using an exchange rate as of the 15 December
2022 (the date of the announcement of the proposed transaction) of
GBP1.00 : USD1.22). The value of the JHI Common Shares together
with the cash consideration equals approximately 2.23p per Ordinary
Share (a premium of approximately 27% to the closing share price of
the Ordinary Shares on 14 December 2022).
The Directors have reviewed the basis of the valuation being
applied to the JHI Common Shares for the purposes of this
transaction and consider it to be appropriate.
The Licence is subject to an annual licence fee payable to the
Falkland Islands Government of USD 78,300. AEL earns no income from
the Licence and is currently loss making.
The effect of the Disposal on the Company will be that it
becomes a dormant investment company (its sole asset being the JHI
Common Shares) and it is the intention of the Board that the
Company should then delist and be wound up by way of a members
voluntary liquidation. The Company has agreed with certain
creditors of the Company to settle those liabilities in JHI Common
Shares (up to approximately 475,000 JHI Common Shares). Thereafter,
approximately 8 million JHI Common Shares are expected to be
available for distribution to Shareholders pro rata to their
holding in the Company at that time.
2.3 Use of Proceeds
The net cash proceeds of the Disposal will be placed on deposit
and used by the Company in payment of expenses until it is
liquidated as intended (see below).
3. AIM Rule 15
In accordance with AIM Rule 15, the Disposal constitutes a
fundamental change of business of the Company. Accordingly, as set
out in AIM Rule 15, the Disposal is conditional on the consent of
shareholders at a general meeting of the Company.
Further, on Completion, the Company would cease to own, control
or conduct all, or substantially all, of its existing trading
business, activities or assets. Following Completion therefore, the
Company will become an AIM Rule 15 cash shell and as such will be
required to make an acquisition or acquisitions which constitutes a
reverse takeover under AIM Rule 14 (including seeking re-admission
as an investing company (as defined under the AIM Rules)) on or
before the date falling six months from Completion or be re-
admitted to trading on AIM as an investing company under the AIM
Rules (which requires the raising of at least GBP6 million) failing
which, the Ordinary Shares would then be suspended from trading on
AIM pursuant to AIM Rule 40. Admission to trading on AIM would be
cancelled six months from the date of suspension should the reason
for the suspension not have been rectified.
As there is no intention by the Directors to make an acquisition
or acquisitions which constitute a reverse takeover under AIM Rule
14 (including seeking re-admission as an investing company (as
defined under the AIM Rules)) on or before the date falling six
months from Completion of the Disposal or be re-admitted to trading
on AIM as an investing company under the AIM Rules (which requires
the raising of at least GBP6 million), the Directors are seeking
Shareholder approval for Cancellation, as detailed below.
4. Background to and reasons for the Cancellation
4.1 Background
The Directors have conducted a review of the benefits and
drawbacks to the Company and its Shareholders of continuing to
maintain the Company's admission to trading on AIM following
completion of the Disposal. The Directors have concluded that in
the event that the Disposal proceeds, Cancellation is in the best
interests of the Company and its Shareholders as a whole. In
reaching that conclusion, the Directors have considered the
following key factors, amongst others:
-- the significant time and cost of identifying a suitable
acquisition or acquisitions which constitute(s) a reverse takeover
under AIM Rule 14 and the appetite of the existing management to do
so;
-- the recurring costs per annum of around GBP350,000 (in
respect of, amongst other things, management time and the legal and
regulatory costs) associated with maintaining the Company's
admission to trading on AIM which, in the Directors' opinion, are
disproportionate to the benefits to the Company of remaining
admitted to trading on AIM;
-- admission of the Ordinary Shares to trading on AIM does not
necessarily offer investors the opportunity to trade in meaningful
volumes per se or with frequency within an active market. With low
trading volumes and liquidity, the Company's share price can move
up or down significantly following trades of small volumes of
Ordinary Shares; and
-- the limited ability of the Company to access capital on AIM.
4.2 Cancellation process
Under the AIM Rules it is a requirement that, unless the London
Stock Exchange otherwise agrees, the Cancellation must be
conditional upon the consent of not less than 75 per cent. of votes
cast by the Shareholders at a general meeting. Accordingly, the
Company is proposing the Cancellation Resolution at the General
Meeting. In addition, the Company is required to give a notice
period of not less than 20 Business Days from the date on which
notice of the intended Cancellation is notified via a Regulatory
Information Service and is given to the London Stock Exchange.
Accordingly, on 3 May 2023, the Company notified the London Stock
Exchange of the Company's intention, subject to the Cancellation
Resolution being passed at the General Meeting, to cancel the
admission of the Ordinary Shares to trading on AIM with effect from
7 a.m. on 6 June 2023.
4.3 Principal effects of the Cancellation
The Board considers the principal effects of the Cancellation
will be:
-- there will no longer be a public market mechanism for
Shareholders to trade in the Ordinary Shares and no price will be
publicly quoted for the Ordinary Shares;
-- the Ordinary Shares will remain freely transferable subject
to there being a willing buyer;
-- it is possible that, following publication of the Circular,
the liquidity and marketability of the Ordinary Shares may be
reduced and the value of the Shares may be adversely affected,
although, as previously stated, the Directors believe that the
liquidity of the Ordinary Shares on AIM is at present very
limited;
-- in the absence of a formal market for the Ordinary Shares
following Cancellation, it may be difficult for Shareholders to
determine the market value of their investment in the Company at
any given time;
-- whilst the Company's CREST facility will remain in place
following the Cancellation, the Company's CREST facility may be
cancelled in the future and, although the Ordinary Shares will
remain transferable, they may cease to be transferable through
CREST. In the event the Ordinary Shares are no longer transferable
in CREST, Shareholders who hold Ordinary Shares in CREST at such
time will receive share certificates;
-- the AIM Rules will no longer apply to the Company and,
accordingly, Shareholders will no longer be afforded the
protections given by the AIM Rules. In particular, the Company will
not be bound to:
- make any public announcements of material events, or to announce interim or final results;
- comply with any of the corporate governance practices applicable to AIM companies;
- comply with the requirement to obtain Shareholder approval for
certain corporate actions, where applicable, including substantial
transactions, related party transactions, reverse takeovers and
fundamental changes in the Company's business; or
- comply with AIM Rule 26, obliging the Company to publish
prescribed information on its website;
-- the Company will cease to retain a nominated adviser and a broker;
-- as an unlisted and non-traded company, the Company will be
subject to less stringent accounting disclosure requirements;
-- the Company would no longer be subject to UK MAR regulating
inside information and other matters;
-- the Company will no longer publicly disclose any change in
major shareholdings in the Company under DTR;
-- as from the date of the Cancellation, stamp duty will be due
on transfers of shares and agreements to transfer shares unless a
relevant exemption or relief applies to a particular transfer as a
result of prevailing Shareholder circumstances;
-- some Shareholders might not be able to hold shares in a
private Canadian company and accordingly may wish to sell their
Ordinary Shares before the Cancellation; and
-- the Cancellation might have personal taxation consequences
for Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent adviser
immediately.
In the event that the Cancellation proceeds, it is expected that
the non-executive directors will resign as directors of the Company
shortly after the date on which the Cancellation becomes effective.
Following this, Ian Thomson (executive chairman), John Hogan
(managing director), and Andrew Irvine (finance director) intend to
remain as directors of the Company for the purposes of placing the
Company into members voluntary liquidations, further details on
which are set out in the Circular.
The considerations set out above are not exhaustive, and
Shareholders should seek their own independent advice when
assessing the likely impact of the Cancellation on them.
The Company will continue to communicate information about the
Company (including annual accounts) to its Shareholders, as
required by the Companies Act.
4.4 Transactions in the Ordinary Shares prior to and post the proposed Cancellation
If Shareholders wish to buy or sell Ordinary Shares on AIM they
must do so prior to the Company's Ordinary Shares being cancelled,
with the expected last day of dealing in Ordinary Shares on AIM
expected to be 5 June 2023. As noted above, in the event that
Shareholders approve the Cancellation, it is anticipated that
Cancellation will become effective on 6 June 2023.
As soon as possible following the Cancellation, it is the
Board's intention to proceed with the members voluntary liquidation
process described in the Circular.
It is not the Board's intention to implement a matched bargain
facility and there will be no formal market for Shareholders to
effect transactions in the Ordinary Shares following
Cancellation.
5. Members Voluntary Liquidation
Assuming the Resolutions are passed, Completion takes place, and
the Cancellation occurs, the Directors believe that it will be in
Shareholders' best interests for the Company to be placed into
members voluntary liquidation (MVL) and the surplus assets of the
Company (after satisfying the Company's liabilities) be distributed
to Shareholders. The Board intends to settle certain of the
Company's liabilities of up to approximately GBP276,000 in JHI
Common Shares. This will require approximately 475,000 JHI Common
Shares, leaving a balance of approximately 8 million JHI Common
Shares remaining for distribution to holders of Ordinary Shares.
The cash portion of the consideration payable by JHI for the
Licence is expected to cover the Company's remaining
liabilities.
The appointment of a liquidator and the Company entering into a
MVL process is dependent on Shareholder consent in a subsequent
general meeting of the Company, which it is proposed is held
following the Cancellation.
It is also the Company's intention to liquidate its subsidiary
AEL.
6. Non-United Kingdom Shareholders
The distribution of the Circular in certain jurisdictions may be
restricted by law. Persons into whose possession the Circular comes
should inform themselves about and observe any such
restrictions.
Shareholders who are not resident in the United Kingdom should
note that they should satisfy themselves that they have fully
observed any applicable legal requirements under the laws of their
relevant jurisdiction in relation to the Disposal and
Cancellation.
7. General Meeting
The Disposal is conditional upon, amongst other things,
Shareholder approval being obtained at the General Meeting. The
Cancellation is conditional upon Shareholder approval being
obtained at the General Meeting. At the end of the Circular is a
notice convening the General Meeting to be held at The Chamber of
Commerce, West Hillside, Stanley, Falkland Islands, at 5 p.m.
(Falkland Islands time) on 26 May 2023, at which the Resolutions
will be proposed.
8. Recommendation
The Directors consider the Disposal and the Cancellation to be
in the best interests of the Company and the Shareholders as a
whole. Accordingly, the Board unanimously recommends that you vote
in favour of the Resolutions, as the Directors intend to do in
respect of their beneficial holdings, which represent in aggregate
approximately 18.95 per cent. of the issued share capital of the
Company.
EXPECTED TIMETABLE OF EVENTS
Notice provided to the London Stock Exchange of 3 May 2023
the proposed Cancellation
Publication and posting of the Circular 4 May 2023
Latest time and date for completion of receipt 5 p.m. on 23 May
of Forms of Instruction 2023
Latest time and date for completion of receipt 9 p.m. on 24 May
of Forms of Proxy 2023
General Meeting 5 p.m. on 26 May
2023 (Falkland
Islands time)
Expected Completion of the Disposal 31 May 2023
Expected last day of dealings in Ordinary Shares 5 June 2023
on AIM
Expected date of Cancellation (1) 7 a.m. on 6 June
2023
Notes
All references to time in the Circular are to London time unless
specifically stated otherwise .
Each of the times and dates in the above timetable is subject to
change. If any of the above times and/or dates change, the revised
times and dates will be notified to Shareholders by an announcement
through a Regulatory Information Service.
(1) The Cancellation is conditional upon the LAA completing in
accordance with its terms and requires the approval of not less
than 75 per cent. of the votes cast (in person or by proxy) by
Shareholders at the General Meeting
DEFINITIONS
The following definitions apply throughout the Circular, unless
the context otherwise requires:
"AEL" Argos Exploration Limited, a wholly owned subsidiary of
the Company;
"AIM" the AIM market, being a market of that name and operated
by the London Stock Exchange;
"AIM Rules" the AIM Rules for Companies (as amended from time to
time);
"ARL" or "Company" Argos Resources Limited;
"Board" or "Directors" the board of directors of the Company;
"Business Day" a day (excluding Saturday, Sunday and public
holidays in England and Wales) on which banks are generally open
for business in London for the transaction of normal banking
business;
"Buyer" JHI Falkland, Inc., a private limited company
incorporated in Ontario, Canada having its registered office at 130
Adelaide Street West, Toronto, Ontario M5H 3P5, Canada;
"Cancellation" the proposed cancellation of admission of the
Ordinary Shares to trading on AIM subject to the passing of the
Cancellation Resolution and in accordance with Rule 41 of the AIM
Rules;
"Cancellation Resolution" Resolution 2 to be proposed to
Shareholders at the General Meeting to approve the
Cancellation;
"Canje Block" the petroleum licence area offshore Guyana in
which JHI has a 17.5% interest;
"Cenkos" Cenkos Securities plc, the Company's nominated advisor
and broker;
"Circular" the circular published by the Company containing
details of the Disposal and Cancellation;
"Companies Act " the Companies Act 1948 of the United Kingdom as
it applies to the Falkland Islands:
"Completion" completion of the Disposal in accordance with the
LAA, expected to occur on or about 31 May 2023;
"CREST" the computerised settlement system (as defined in the
CREST Regulations) operated by Euroclear UK & International
Limited which facilitates the transfer of title to share in
uncertificated form;
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 20013755);
"Disposal" the proposed sale of the Licence (and related assets)
to the Buyer pursuant to the LAA;
"Disposal Resolution" Resolution 1 to be proposed to
Shareholders at the General Meeting to approve the Disposal;
"DTR" the disclosure guidance and transparency rules made by the
FCA pursuant to section 73A of the Financial Services and Markets
Act 2000;
"FCA" the UK Financial Conduct Authority;
"Final Order" the final order of the Ontario Superior Court of
Justice (Commercial List) approving the Plan of Arrangement under
section 182(5) of the OBCA ;
"Form of Instruction" voting form to be used by Depository
Interest holders to submit votes via the custodian;
"Form of Proxy" voting form to be used by Shareholders to submit
votes;
"General Meeting" the general meeting of the Company to be held
at The Chamber of Commerce, West Hillside, Stanley, Falkland
Islands, at 5 p.m. on 26 May 2023 (Falkland Islands time);
"Group" the Company and its wholly owned subsidiary, AEL;
"JHI" JHI Associates, Inc., a private limited company
incorporated in Ontario, Canada having its registered office at 130
Adelaide Street West, Toronto, Ontario M5H 3P5, Canada;
"JHI Common Shares" common shares of no par value in the capital
of JHI to be issued to the Company as part consideration for the
Licence and related assets in accordance with the terms of the
LAA;
"LAA" the licence acquisition agreement dated 2 May 2023 between
ARL, AEL, JHI and the Buyer relating to the sale and transfer of
the Licence (and related assets) by AEL to the Buyer;
"Licence" offshore petroleum production licence PL001 in the
North Falkland Basin granted by the Falkland Islands Government and
currently held by AEL;
"Notice" the notice set out at the end of the Circular convening
the General Meeting;
"OBCA" the Business Corporations Act (Ontario);
"Ordinary Shares" ordinary shares of 2 pence each in the capital
of the Company;
" Plan of Arrangement " the arrangement being undertaken by JHI
pursuant to section 182 of the OBCA ;
"Resolutions" the resolutions to approve the Disposal and the
Cancellation to be proposed at the General Meeting;
"Shareholders" holders of Ordinary Shares;
"UK MAR" the UK version of the Market Abuse Regulations (EU) (No
596/2014) which is part of the UK law by virtue of the European
Union (Withdrawal) Act 2018 as amended by the Market Abuse
(Amendment) (EU Exit) Regulations 2019;
"USD" the lawful currency of the United States of America;
and
"GBP" the lawful currency of the United Kingdom.
Notes to Editors
Argos Resources is an oil and gas exploration company listed on
AIM and based in the Falkland Islands. The Company's principal
asset is a 100 per cent interest in Production Licence PL001
covering an area of approximately 1,126 square kilometres in the
North Falkland Basin.
A 3D seismic survey has been acquired over the entire licence
area. The quality of the seismic data acquired is excellent and has
led to the identification of 52 prospects and 40 leads within the
licence area. An independent Competent Person's Report attributes
to these prospects a total unrisked potential of 3.1 billion
barrels of prospective recoverable resource in the most likely case
and up to 10.4 billion barrels in the upside case.
The licence area is immediately adjacent to the giant Sea Lion
oil discovery which contains over 500 million barrels of
recoverable resource. A decision to proceed with the development of
the Sea Lion field is awaited.
The licence is held under the name of Argos Exploration Ltd,
which is a wholly owned subsidiary of the Company.
The Company has a strong and experienced management team with
extensive experience in both the oil and gas industry and the
Falkland Islands.
This statement has been approved by John Hogan, Managing
Director of Argos Resources, and a qualified geologist with over 40
years of experience in the petroleum industry.
Information on JHI
JHI is a private company incorporated in Ontario and
headquartered in Toronto, Canada. JHI owns a 17.5 per cent.
interest in the Canje block, offshore Guyana, operated by Esso
Exploration & Production Guyana Ltd. (35 per cent.), a
subsidiary of ExxonMobil Corp. The other partners in the block are
TotalEnergies E&P Guyana BV (35 per cent.) and Mid-Atlantic Oil
& Gas Inc. (12.5 per cent.). The Canje block covers
approximately 4,800 square kilometres and is located approximately
180 to 300 kilometres offshore Guyana in water depths ranging from
1,700 to 3,000 metres.
The Canje block is a large and significant licence adjacent and
immediately east of multiple ExxonMobil discoveries in the Stabroek
block. 6,100 square kilometres of 3D seismic data has been shot
over the Canje block, from which over three dozen prospects have
been mapped in four proven plays in the Lower Tertiary and Upper
Cretaceous confined channels, Lower Cretaceous carbonate structures
and, with the recent drilling of Sapote-1 well and Stabroek
discoveries, the block now offers the opportunity of yet deeper
prospectivity.
As of 31 December 2021, JHI's audited financial statements
indicate total gross assets of approximately US$30.7 million, of
which approximately US$27 million in cash and investments, and
total liabilities of approximately US$500,000.
[1] Whilst the Company has no reason to doubt the veracity of
this information (as at the date of this Circular), it is provided
by JHI and has not been independently verified. No representation,
warranty, assurance or undertaking is made, and no responsibility
or liability is or will be accepted, by the Company (or by its
officers, employees or agents) in relation to the adequacy,
accuracy, completeness or fairness of the information and/or
opinions available at www.jhiassociates.com.
[2] The Company has not had sight of JHI's register of
shareholders or the Plan of Arrangement, which may in any event be
subject to amendment or modification in the Final Order, and the
figures in this paragraph are based on the warranties given by JHI
in the LAA as well as the Board's understanding of the Plan of
Arrangement .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
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Policy.
END
DISUPUUPAUPWPUP
(END) Dow Jones Newswires
May 03, 2023 02:00 ET (06:00 GMT)
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