TIDMBLOE
RNS Number : 6524I
Block Energy PLC
13 August 2021
13 August 2021
Block Energy plc
("Block" or the "Company")
Posting of Notice of General Meeting
Further to the Company's announcement on 26 July 2021 concerning
the request by Forest Nominees Limited (on behalf of G.P. (Jersey)
Limited) for the Company to convene a further general meeting,
Block Energy plc, the development and production company focused on
Georgia, announces that the Notice of a General Meeting and Form of
Proxy will be posted to shareholders later today and are available
in the Investors section of the Company's website at
www.blockenergy.co.uk/investors/circulars-presentations-and-reports/.
An extract from the letter from the Chairman in the Circular is
set out below:
" Notice of requisitioned General Meeting
On 24 July 2021, the Board of Block Energy PLC received a
further Requisition Notice from Forest Nominees Limited (on behalf
of G.P. (Jersey) Limited) ("GP Jersey"), requesting the Board to
convene a General Meeting of Block Energy plc (the "Company") for
the purpose of considering a resolution to commission an
independent forensic investigation into the affairs of the Company
(full text of the scope of this proposed resolution is set out
below).
As a matter of company law, and, in particular, in accordance
with and subject to the provisions of section 303 of the Companies
Act 2006, the Board is required to convene a General Meeting
following the receipt of valid requisition notices from
Shareholders holding at least 5% of the Company's issued share
capital.
As at the date of the Requisition Notice, Forest Nominees
Limited disclosed that it was the holder of 31,308,000 ordinary
shares in the Company, representing approximately 5.00% of the
total voting rights of all members of the Company as at the date of
the Requisition Notice. It is a requirement (under section 304 of
the Companies Act 2006) that the Board calls a General Meeting
within 21 days of the date of the Requisition Notice. The formal
Notice of the General Meeting is set out on pages 9 and 10 of this
document.
The Requisition Notice includes the following resolution to be
considered and, if thought fit, approved at the General Meeting as
an ordinary resolution ("Resolution"):
That the board of the directors of the Company (the "Board")
commission an independent forensic investigation into the affairs
of the Company which will:
1. review all material transactions and arrangements entered
into in the three years preceding the date of this resolution to
which the Company or any of its subsidiaries or affiliates was
directly or indirectly a party and to report on the terms of such
transactions and arrangements and the ongoing implementation of
such transactions and their commercial benefit to the Company;
2. carry out a detailed analysis of the Company's general
operational performance from a technical and commercial standpoint
with a focus on:
a. gas sales arrangements and spot sales of hydrocarbons;
b. general approach to contracting of equipment, contractors and
staff and their suitability to deliver the Company's drilling
strategy;
c. the Company's ongoing financial requirements and use of the
proceeds of the December 2021 [sic] placing; and
d. the Company's current ability to finance the well programme
for which the proceeds of the placing were raised; and
3. review the Company's corporate governance structures and
approach to compliance with the regulatory framework to which the
Company and Board are subject and to identify any systemic failures
in corporate governance in the preceding three years by the
Company's leadership including but not limited to:
a. any failures to disclose information to the market in a timely fashion;
b. any inappropriate trading of shares by Directors during close periods or otherwise;
c. the circumstances surrounding the resignation of Dato
Sandroshvilli [sic] and Chris Brown in short succession from the
Board on or around 22 July 2021,
d. Board dynamics and composition and the Board's compliance
with the requirements of the QCA Corporate Governance Code which
the Company has adopted,
and to report on any perceived non-compliance and/or
shortcomings and to make recommendations as to how effective
corporate governance practices can be adopted by the Company going
forward.
For the purpose of carrying out such independent forensic
investigation the Board shall retain one of the following firms:
Deloitte, PwC, Ernst & Young [sic] and/or KPMG. The purpose of
such forensic investigation is to determine if the transactions or
arrangements entered into by the Company and the policies and
systems adopted by the Board were carried out or implemented in the
best interests of the Company and to the benefit of its
shareholders or otherwise. The priority is ensuring the future
success of the Company and to ensure that the Company understands
and does not repeat past mistakes. The independent forensic
investigator shall provide a written report detailing its findings.
The Board shall promptly make available to the shareholders an
un-redacted copy of the independent forensic investigator's
report.
The purpose of this letter is to explain the impact that the
actions of GP Jersey will have on the Company, why the Board
strongly recommends that you should VOTE AGAINST the Resolution,
and the action you need to take to vote.
G.P. (Jersey) Limited, as the beneficial owner of the 31,308,000
ordinary shares held by Forest Nominees Limited has not provided a
statement to be circulated with this Notice ("Statement") outlining
its position or explaining why the Resolution has been proposed.
Nevertheless, in the event that any such Statement is received, the
Company will comply with its obligation to circulate such Statement
in accordance with the Companies Act 2006. Any such Statement and
its contents will be reproduced as received and the Board will take
no steps to verify its accuracy and will not in any way endorse the
Statement or the statements or views contained in it.
Why Shareholders should vote AGAINST the Resolution:
Shareholders are strongly urged to vote against the Resolution
proposed in the latest Requisition Notice from GP Jersey for the
following reasons:
Ø Block Energy's operational and governance framework is, in the
context of the Company's size and status as an AIM-quoted company,
of an appropriate standard and adherence to this framework has been
wrongly been called into question by GP Jersey.
Ø Time, effort and money should not be diverted from the
Company's focus on creating further value for its Shareholders,
particularly at this critical time in the current, potentially
Company-transforming drilling campaign.
As was highlighted in the circular dated 30 July 2021 sent to
Shareholders ahead of the general meeting held on 11 August 2021,
at which the previous resolutions proposed by GP Jersey were
defeated, the current Board and management team have a track record
of delivering value since the Company's listing. This includes net
asset value having increased by over 200% from $9.2 million as of
30 June 2018 to $29.7 million as of 31 December 2020, and 2P
reserves having increased by more than 40-fold over the same
period, despite the impact of Covid-19. Furthermore, the Company
has a clear strategy to unlock the full potential of the Company's
significant asset portfolio in Georgia.
It is the opinion of the Board that the Requisition Notice was
served with the intention of creating as much of a nuisance as
possible for the Company. In particular, the Requisition Notice was
received the day after the Company had posted its notice of a
general meeting dated 23 July 2021 in respect of the first
requisition notice received from GP Jersey. As Shareholders will be
aware, that general meeting was held on 11 August 2021 and the two
resolutions proposed by GP Jersey were rejected by Shareholders as
shown in the table below:
Resolution For % For Against % Against
1. THAT Philip Dimmock be
removed from office as director
of the Company with immediate
effect. 140,566,909 36.84% 240,980,994 63.16%
------------ ------- ------------ ----------
2. THAT Charles Valceschini
be appointed as non-executive
Chairman of the Company with
immediate effect. 139,944,209 37.79% 230,388,805 62.21%
------------ ------- ------------ ----------
It is the view of the Board that the Resolution proposed in the
Requisition Notice might be another attempt by GP Jersey, together
with others (the "Shareholder Group"), to prepare for further
personal attacks against certain members of the Board. The Board is
of the view that the Resolution proposed is vexatious and
accordingly that there is no obligation on the Board to call the
General Meeting by virtue of section 303(5)(c) of the Companies Act
2006. The reasons for this are as follows:
1. The Company has, pursuant to the circular posted on 30 July
2021 (the "Circular"), explained the position of the Company's
directors on the statements by GP Jersey. In particular, and as
specified in the Circular, the Company's Nominated Adviser, Spark
Advisory Partners Limited, guides and advises the Company on its
responsibilities to ensure compliance with the AIM regulatory
regime and, each year, BDO audits the Company's accounts. The
material transactions referred to in item number 1 of the
Resolution have already been audited by the Company's auditor, BDO
LLP. The matters referred to in item number 2 of the Resolution are
kept under continuous review by the Board. The matters referred to
in item number 3 of the Resolution are continuously monitored by
the Company's Nominated Adviser, Spark Advisory Partners Limited.
As such, the forensic investigation proposed in the Requisition
Notice is not required and serves no proper purpose.
2. Had GP Jersey truly wished to propose the resolution included
in the Requisition Notice for bona fide reasons, the Directors
believe they would have done so in the first s.303 notice served on
the Company on 2 July 2021. The Board has not identified any
particular material new information which arose between 2 July 2021
and 23 July 2021 and which would, in the Board's opinion, explain
GP Jersey's approach in requesting a second general meeting of the
Company. The only matter of substance was the resignations of Chris
Brown and Dato Sandroshvili, but any suggestion that these
resignations are justification for requiring a full-scale forensic
audit into the affairs of the Company over the previous 3 years
would be incorrect.
3. The Company has approached the firms specified in the
proposed resolution to obtain quotes for the forensic report which
would be required if the resolution were passed. One of these firms
has stated to the Company in writing that "Based on our experience,
we anticipate the cost of an independent forensic investigation to
meet the scope as presently envisaged could exceed GBP2 million
(excluding VAT and expenses)". In addition, due to the nature of
the request and scope of work, they would also seek an upfront
payment on account of 50% of their estimated fee (GBP1 million),
payable on the execution of an engagement letter. The expenditure
of around GBP2 million of Shareholders' funds on GP Jersey's
proposed forensic investigation would clearly not be in the best
interests of the Company and would be burdensome. The Company's
currently has $4.0 million in cash. If the Company were to be
compelled to perform the forensic investigation and incur a
liability of GBP2 million (approximately $2.8 million), even if the
current well is completed on budget, the current two-well programme
could not be completed without the Company returning to the capital
markets for additional funds.
In relation to the above, the Company has, through its
solicitors, written to GP Jersey inviting them to withdraw the
Requisition Notice. Unfortunately, GP Jersey has refused this
invitation.
Whilst the Board is confident that its position - that the
Requisition Notice is invalid pursuant to the Companies Act - is
correct, the Board wishes to avoid any costly and protracted court
process that might follow if it were to challenge the Requisition
Notice's validity through formal legal channels. The Board wishes
to continue operating in an open and transparent manner and,
accordingly, the Board has decided to call the General Meeting to
allow Shareholders to vote on the Resolution proposed, and with the
hope of drawing a line under the actions of the Shareholder Group
and allowing the Company to fully focus on its operational
priorities. If Shareholders determine that the forensic
investigation called for by GP Jersey is a better use of
Shareholder funds than the drilling programme, which is currently
ongoing, they may wish to vote in favour of the Resolution. It is
the Board's view that a forensic investigation is not merited, and
that such funds would be better spent on furthering the operations
of the Company in order to increase value for all Shareholders
rather than to advance the agenda of the Shareholder Group.
For the reasons noted above, the Board believes that the
Resolution is not in the best interests of the Shareholders as a
whole. The Board therefore strongly recommends that Shareholders
vote against the Resolution.
The General Meeting
Before the General Meeting
Please register your proxy vote by completing and signing the
Form of Proxy accompanying this Notice in accordance with the
instructions set out thereon and returning the Form of Proxy to
Share Registrars Limited, by email to
voting@shareregistrars.uk.com, by post or by hand (during normal
business hours and by appointment only) at the following address:
The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR as soon as
possible, but in any event so as to be received by no later than 48
hours (excluding non-Business Days) before the appointed time for
the General Meeting (being 10:00 a.m. on 1 September 2021). Unless
the Form of Proxy is returned by the relevant time specified in the
foregoing sentence, or in the event that the General Meeting is
adjourned, not later than 48 hours (excluding non-Business Days)
before the time fixed for the holding of the adjourned meeting,
they will be invalid .
Shareholders who hold their shares through CREST and who wish to
appoint a proxy for the General Meeting or any adjournment(s)
thereof may do so by using the CREST proxy voting service in
accordance with the procedures set out in the CREST manual. CREST
personal members or other CREST sponsored members, and those CREST
members who have appointed a voting service provider, should refer
to that CREST sponsor or voting service provider(s), who will be
able to take the appropriate action on their behalf. Proxies
submitted via CREST must be received by the Registrar by no later
than 48 hours (excluding non-Business Days) before the appointed
time for the relevant Meeting (being 10:00 a.m. on 1 September
2021).
Accordingly, your proxy vote, whether your shares are held
through CREST or otherwise, must be submitted by no later than
10:00 a.m. on 27 August 2021.
EVERY SHAREHOLDER'S VOTE IS IMPORTANT - PLEASE COMPLETE AND
RETURN YOUR FORM OF PROXY AS SOON AS POSSIBLE.
On the day of the General Meeting
The General Meeting takes place at 10:00 a.m. on 1 September
2021 at Landmark Office Space, 33 Cavendish Square, London W1G
0PW.
Action to be taken by the Shareholders
Shareholders will find enclosed with this letter a Form of Proxy
for use at the General Meeting. The Form of Proxy should be
completed and returned in accordance with the instructions printed
on it so as to arrive at Share Registrars Limited, by email to
voting@shareregistrars.uk.com, by post or by hand (during normal
business hours and by appointment only) at the following address:
The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR, United
Kingdom as soon as possible and in any event not later than 10:00
a.m. on 31 August 2021.
Shareholders who hold their shares through CREST and who wish to
appoint a proxy for the General Meeting or any adjournment(s)
thereof may do so by using the CREST proxy voting service in
accordance with the procedures set out in the CREST manual. CREST
personal members or other CREST sponsored members, and those CREST
members who have appointed a voting service provider, should refer
to that CREST sponsor or voting service provider(s), who will be
able to take the appropriate action on their behalf. Proxies
submitted via CREST must be received by the Registrar by no later
than 10:00 a.m. on 31 August 2021.
Recommendation
For the reasons noted above, the directors unanimously consider
that the Resolution is not in the best interests of the Company and
its Shareholders and, therefore, are recommending that Shareholders
VOTE AGAINST the Resolution to be proposed at the General
Meeting.
The Directors who will be voting against the Resolution in
respect of their own beneficial holdings hold 20,418,530 ordinary
shares in aggregate, representing approximately 3.26% of the issued
share capital of the Company at the date of this document.
Yours faithfully
PHILIP DIMMOCK
Chairman"
The general meeting will be held at 10:00 a.m. on 1 September
2021 at Landmark Office Space, 33 Cavendish Square, London W1G
0PW.
The result of the general meeting will be announced after its
conclusion and published on the Company's website.
**S**
For further information please visit
http://www.blockenergy.co.uk/ or contact:
Paul Haywood Block Energy plc Tel: +44 (0)20
(Chief Executive 3468 9891
Officer)
Neil Baldwin Spark Advisory Partners Tel: +44 (0)20
(Nominated Adviser) Limited 3368 3554
Peter Krens Tennyson Securities Tel: +44 (0)20
(Corporate Broker) 7186 9030
Mark Antelme Celicourt Communications Tel: +44 (0)20
Philip Dennis 8434 2643
(Financial PR Adviser)
Notes to editors
Block Energy plc is an AIM-quoted independent oil and gas
company focused on production and development in Georgia, applying
innovative technology to realise the full potential of previously
discovered fields.
Block has a 100% working interest in Georgian onshore licence
blocks IX and XI(B) . Licence block XI(B) is Georgia's most
productive block, with 2P oil and gas reserves of 64 MMboe, which
is comprised 2P oil reserves of 36 MMbbls and 2P gas reserves of 28
MMboe (Source: CPR Bayphase Limited: 1 July 2015) and historic
production of over 180 MMbbls of oil from the Middle Eocene,
peaking in the mid-1980s at 67,000 bopd.
The Company has a 100% working interest in the highly
prospective West Rustavi onshore oil and gas field with multiple
wells that have tested oil and gas from a range of geological
horizons. The field has so far produced 50 Mbbls of light sweet
crude and has 0.9 MMbbls of gross 2P oil reserves in the Middle
Eocene. It also has 38 MMbbls of gross unrisked 2C contingent
resources of oil and 608 Bcf of gross unrisked 2C contingent
resources of gas in the Middle, Upper and Lower Eocene formations
(Source: CPR Gustavson Associates: 1 January 2018).
Block also holds 100% and 90% working interests respectively in
the onshore oil producing Norio and Satskhenisi fields.
The Company offers a clear entry point for investors to gain
exposure to Georgia's growing economy and the strong regional
demand for oil and gas.
Glossary
1. bbls: barrels. A barrel is 35 imperial gallons.
2. boe: barrels of oil equivalent.
3. bopd: barrels of oil per day.
4. Mbbls: thousand barrels.
5. MMbbls: million barrels.
6. MMboe: million barrels of oil equivalent.
7. Bcf: billion cubic feet.
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END
NOGDKNBNQBKDNFD
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