TIDMSLE TIDMAUL
RNS Number : 8533Q
San Leon Energy PLC
12 November 2012
Not for release, publication or distribution, in whole or in
part, directly or indirectly, in, into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction.
FOR IMMEDIATE RELEASE 12 November 2012
Recommended Merger
of
San Leon Energy plc
and
Aurelian Oil & Gas plc
to be effected by means of a Scheme of Arrangement under Part 26
of the Companies Act 2006
Summary
-- The Boards of San Leon and Aurelian are pleased to announce
that they have reached agreement on the terms of a recommended
merger pursuant to which San Leon will acquire the entire issued
and to be issued share capital of Aurelian.
-- The Boards of San Leon and Aurelian believe that the asset
portfolios of the two companies are highly complementary and that
the Merger represents a compelling strategic and cultural fit which
will provide significant benefits to shareholders in the Enlarged
Company.
-- Under the terms of the Merger, Aurelian Shareholders will be entitled to receive:
1.3 New San Leon Shares for each Aurelian Share
-- Following the Merger becoming effective, based on the Merger
Ratio of 1.3 New San Leon Shares for every Aurelian Share held:
o existing Aurelian Shareholders will hold approximately 34 per
cent. of the Enlarged Company; and
o existing San Leon Shareholders will hold approximately 66 per
cent. of the Enlarged Company.
-- Based on San Leon's closing middle market price of 9.59 pence
per San Leon Share on 9 November 2012, being the Business Day
immediately prior to the date of this announcement, the Merger
values each Aurelian Share at approximately 12.47 pence and the
whole of the issued share capital of Aurelian at approximately
GBP61.6 million and represents a premium of:
o 13.3 per cent. over the closing middle market price of 11.00
pence per Aurelian Share on 9 November 2012 (being the Business Day
immediately prior to the date of this announcement); and
o 23.3 per cent. over the volume weighted average price of 10.11
pence per Aurelian Share in the one month period to 9 November 2012
(being the Business Day immediately prior to the date of this
announcement).
-- The Boards of San Leon and Aurelian believe that the Enlarged
Company has the potential to become a leading exploration and
production company across Europe and North Africa.
-- Both San Leon and Aurelian hold significant acreage positions
in Poland, and the Merger will make the Enlarged Group the largest
foreign acreage holder in that country. The merger of the asset
base and experienced management teams are expected to enable the
Enlarged Group to optimise the portfolio and expedite the path to
production.
-- The Boards of San Leon and Aurelian believe the Enlarged
Group offers near term cash flow potential in Poland, while it will
also possess high impact growth potential in a well-balanced
conventional and unconventional exploration portfolio, particularly
in Poland, Morocco and Albania.
-- Following implementation of the Merger, the Enlarged Company
will be led by a management team comprising Oisin Fanning as
Executive Chairman, Paul Sullivan as Managing Director and John
Buggenhagen as Exploration Director. The Board of the Enlarged
Company will also include John Conlin (the current Chairman of
Aurelian), John Matthews (the acting Finance Director of Aurelian),
Piotr Rozwadowski (a current Non-Executive Director of Aurelian),
Ray King (the current Company Secretary of San Leon), Con Casey (a
current Non-Executive Director of San Leon), Daniel Martin (a
current Non-Executive Director of San Leon) and Dr. Jeremy Boak (a
current Non-Executive Director of San Leon). Upon the Scheme
becoming Effective each of Rowen Bainbridge, John Smallwood, David
Prior, Dariusz Mioduski and David Walker have agreed to step down
as Directors of Aurelian.
-- It is intended that the Merger will be implemented by means
of a scheme of arrangement of Aurelian under Part 26 of the
Companies Act.
-- The Merger is conditional on, among other things, certain
approvals by Aurelian Shareholders and the sanction of the Scheme
by the Court.
-- It is currently expected that the Scheme Circular will be
published later this month and that, subject to the satisfaction,
or where relevant waiver, of all relevant Conditions, the Scheme
will become Effective and the Merger completed in early 2013.
-- The Aurelian Board intends unanimously to recommend that
Aurelian Shareholders vote in favour of the resolutions to be
proposed at the Court Meeting and the General Meeting which are to
be convened to approve the Merger, as they have irrevocably
undertaken to do in respect of their own personal interests
totalling 3,617,595 Aurelian Shares, representing approximately
0.73 per cent of the Aurelian Shares (as further described in
Appendix III).
-- San Leon has received irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting and the resolutions to
effect the Merger at the General Meeting from Kulczyk Investments
S.A.,Toscafund Asset Management LLP and Lord Sainsbury in respect
of an aggregate total of 207,866,958 Aurelian Shares, representing
approximately 42.06 per cent. of the issued ordinary share capital
of Aurelian. In addition, a letter of intent has been received from
Cheyne Capital Management (UK) LLP in relation to 23,598,420
Aurelian Shares representing approximately 4.77 per cent. of the
issued ordinary share capital of Aurelian confirming its current
intention to use its reasonable endeavours to persuade the owner of
23,598,420 Aurelian Shares, in relation to which it holds contracts
for difference, to vote in favour of the Merger.
-- In aggregate, therefore, irrevocable undertakings and letters
of intent to vote in favour of the Scheme at the Court Meeting and
the resolutions to effect the Merger at the General Meeting have
been received in respect of a total of 235,082,973 Aurelian Shares,
representing approximately 47.56 per cent. of the ordinary share
capital of Aurelian in issue.
-- The Aurelian Board has been advised by Greenhill and Oriel.
The Aurelian Board, which has been so advised by Greenhill (as the
independent adviser for the purposes of the Takeover Code),
considers the terms of the Merger to be fair and reasonable. In
providing its advice to the Aurelian Board, Greenhill has taken
into account the commercial assessments of the Board.
-- The San Leon Board has been advised by Fox-Davies Capital.
Commenting on the Merger, John Conlin, Chairman of Aurelian
said:
"I am delighted to have reached this agreement with the San Leon
Board. We followed a rigorous process to find the right way forward
to unlock the value in the Aurelian portfolio. The Aurelian Board
believes the proposed merger provides Aurelian with the right
combination of technical and deal-making capability and exploration
upside and maintains exposure for our shareholders in the material
unconventional resources play in Poland."
Rowen Bainbridge, Chief Executive of Aurelian stated:
"The proposed merger between Aurelian and San Leon creates a
leading upstream position in Poland with complementary play types,
capabilities and relationships covering both conventional and
un-conventional resources. The integration of Aurelian and San
Leon's Permian Basin assets and the combined conventional
exploration portfolio elsewhere in Europe and North Africa offer a
high impact forward program over the next 12 to 18 months. I
believe the value proposition in the deal for shareholders is
compelling."
Commenting on the Merger, Oisin Fanning, Executive Chairman of
San Leon said:
"A merger with Aurelian makes perfect sense for the shareholders
of both companies. The combination of cash resources and the Polish
asset base alone creates an obvious and exciting opportunity to
realise substantial growth. Both management teams have built up a
tremendous amount of experience and we can now employ that to
pursue a best-of-portfolio near term value creation strategy. The
combined entity offers shareholders material conventional and
unconventional plays in stable and highly import-dependent
countries."
This summary should be read in conjunction with the full text of
the following announcement including the Appendices. The Conditions
and certain further terms of the Merger are set out in Appendix I
to this announcement. Appendix II contains details of the sources
and bases of certain information contained in this announcement.
Appendix III contains details of the irrevocable undertakings given
to San Leon. Appendix V contains the definitions of certain terms
used in this announcement and Appendix VI contains a glossary of
acronyms and technical terms used in this announcement.
A conference call for analysts and professional investors will
be held at 8.30am today. Dial in details can be obtained from
College Hill - telephone +44 (0)20 7457 2020.
Enquiries:
San Leon Energy plc +353 1291 6292
020 36173913
Oisin Fanning
John Buggenhagen
Fox-Davies Capital Limited (financial adviser
and joint broker to San Leon) 020 3463 5000
Susan Walker
Daniel Fox-Davies
Westhouse Securities Limited (nominated adviser
to San Leon) 020 7601 6100
Richard Johnson
Antonio Bossi
College Hill (public relations adviser to
San Leon) 020 7457 2020
Rupert Trefgarne
Alexandra Roper
Plunkett PR (public relations adviser to San
Leon in Republic of Ireland) +353 1 2844414
Sharon Plunkett
Aurelian Oil and Gas plc
Rowen Bainbridge, CEO 020 7629 7986
Greenhill & Co. International LLP (joint financial
and Rule 3 adviser to Aurelian) 020 7198 7400
Mark Bentley
Anastasia Fadeeva
Oriel Securities Limited (joint financial
adviser and broker to Aurelian) 020 7710 7600
David Arch
James Brodie
RFC Ambrian Limited (nominated adviser to
Aurelian) 020 3440 6800
Richard Morrison
College Hill (public relations adviser to
Aurelian) 020 7457 2020
Matthew Tyler
Catherine Wickman
Further information
This announcement is not intended to and does not constitute, or
form part of, any offer to sell or subscribe for or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Merger or
otherwise, nor shall there be any sale, issuance or transfer of
securities of Aurelian and/or San Leon in any jurisdiction in
contravention of applicable law. This announcement does not
constitute a prospectus or a prospectus equivalent document.
Any vote in respect of the Merger should only be made on the
basis of the information contained in the Scheme Circular, which
will contain the full terms and conditions of the Merger (including
details of how to vote). Aurelian Shareholders are advised to read
the Scheme Circular carefully once they have been dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by Aurelian Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from Aurelian may be provided to San
Leon during the Offer Period as required under Section 4 of
Appendix 4 of the Code.
Fox-Davies Capital Limited which is authorised and regulated in
the United Kingdom by the FSA, is acting for San Leon as financial
adviser in relation to the Merger and is not acting for any other
person in relation to such Merger. Fox-Davies Capital Limited will
not be responsible to anyone other than San Leon for providing the
protections afforded to clients of Fox-Davies Capital Limited or
for providing advice in relation to this announcement or any other
matter referred to herein.
Greenhill & Co. International LLP which is authorised and
regulated in the United Kingdom by the FSA, is acting exclusively
for Aurelian and no-one else in connection with the Merger and will
not be responsible to anyone other than Aurelian for providing the
protections afforded to clients of Greenhill & Co.
International LLP nor for providing advice in relation to the
Merger or any other matter referred to herein.
Oriel Securities Limited which is authorised and regulated in
the United Kingdom by the FSA, is acting exclusively for Aurelian
and no-one else in connection with the Merger and will not be
responsible to anyone other than Aurelian for providing the
protections afforded to clients of Oriel Securities Limited nor for
providing advice in relation to the Merger or any other matter
referred to herein.
Overseas jurisdictions
The availability of New San Leon Shares in, and the release,
publication or distribution of this announcement in or into,
jurisdictions other than the United Kingdom may be restricted by
law and therefore persons into whose possession this announcement
comes who are not resident in the United Kingdom should inform
themselves about, and observe, any applicable restrictions.
Aurelian Shareholders who are in any doubt regarding such matters
should consult an appropriate independent adviser in the relevant
jurisdiction without delay. Any failure to comply with such
restrictions may constitute a violation of the securities laws of
any such jurisdiction.
This announcement has been prepared for the purposes of
complying with English law, the Takeover Code and the AIM Rules and
the information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside the United
Kingdom.
Notes to US investors
Shareholders in the United States should note that the
acquisition of Aurelian by San Leon relates to the shares of a
"foreign private issuer" as defined under Rule 3b-4 under the US
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and is proposed to be made by means of a scheme of arrangement
provided for under, and governed by, English law. Neither the proxy
solicitation nor the tender offer rules under the Exchange Act will
apply to the Scheme. Moreover, the Scheme will be subject to the
disclosure requirements and practices applicable in the UK to
schemes of arrangement, which differ from the disclosure
requirements of the US proxy solicitation rules and tender offer
rules. Financial information included in this announcement has been
or will be prepared in accordance with accounting standards
applicable in the UK and may not be comparable to financial
information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting
principles in the United States.
Aurelian is organised under the laws of England and San Leon is
organised under the laws of Ireland. To the extent that Aurelian's
and San Leon's officers and directors are residents of countries
other than the United States it may not be possible to effect
service of process on Aurelian, San Leon, or their respective
officers or directors in a non-US court for violations of US
securities laws. It may be difficult to compel Aurelian, San Leon,
their respective affiliates, and/or the respective officers or
directors of each, to subject themselves to the jurisdiction and
judgment of any US court.
The New San Leon Shares to be issued pursuant to the Scheme have
not been and will not be registered under the US Securities Act of
1933, as amended (the "US Securities Act") or under the relevant
securities laws of any state or territory or other jurisdiction of
the United States. Accordingly, the New San Leon Shares may not be
offered, sold, resold, delivered, distributed or otherwise
transferred, directly or indirectly, in or into the United States,
or to or for the account or benefit of any US Person, absent
registration under the US Securities Act or an exemption therefrom.
The New San Leon Shares are expected to be offered in the United
States, if at all, in reliance upon the exemption from the
registration requirements of the US Securities Act provided by
Section 3(a)(10) thereof. None of the securities referred to in
this document have been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission
in the United States or any other US regulatory authority, nor have
such authorities passed upon or determined the adequacy or accuracy
of this document. Any representation to the contrary is a criminal
offence in the United States. This document does not constitute an
offer to sell, or the solicitation of any offer to buy, any New San
Leon Shares in any jurisdiction in which such an offer or
solicitation would be unlawful.
The New San Leon Shares to be issued pursuant to the Scheme have
not been and will not be registered under the relevant securities
laws of Japan and the relevant clearances have not been, and will
not be, obtained from the securities commission of any province of
Canada or Australia. Accordingly, the New San Leon Shares are not
being, and may not be, offered, sold, resold, delivered or
distributed, directly or indirectly in or into Canada, Australia or
Japan or any other jurisdiction if to do so would constitute a
violation of relevant laws of, or require registration thereof in,
such jurisdiction (except pursuant to an exemption, if available,
from any applicable registration requirements or otherwise in
compliance with all applicable laws). No prospectus in relation to
the New San Leon Shares has been, or will be, lodged with, or
registered by, the Australian Securities and Investments
Commission.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of Aurelian
or of any paper offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is
likely to be, solely in cash) must make an Opening Position
Disclosure following the commencement of the Offer Period and, if
later, following the announcement in which any paper offeror is
first identified. An Opening Position Disclosure must contain
details of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i)
Aurelian and (ii) any paper offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10th Business Day
following the commencement of the Offer Period and, if appropriate,
by no later than 3.30 pm (London time) on the 10th Business Day
following the announcement in which any paper offeror is first
identified. Relevant persons who deal in the relevant securities of
Aurelian or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of Aurelian or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of
Aurelian or of any paper offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) Aurelian and (ii) any paper offeror, save
to the extent that these details have previously been disclosed
under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b)
applies must be made by no later than 3.30 pm (London time) on the
Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of Aurelian or a paper offeror,
they will be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must also be made by Aurelian and
by any offeror and Dealing Disclosures must also be made by
Aurelian, by any offeror and by any persons acting in concert with
any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the Offer Period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
This announcement contains certain forward-looking statements,
including statements regarding the San Leon's and Aurelian's plans,
objectives and expected performance. Such statements relate to
events and depend on circumstances that will occur in the future
and are subject to risks, uncertainties and assumptions. There are
a number of factors which could cause actual results and
developments to differ materially from those expressed or implied
by such forward looking statements, including, among others the
enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences;
fluctuations in demand and pricing in the Energy industry;
fluctuations in exchange controls; changes in government policy and
taxations; industrial disputes; war and terrorism. These
forward-looking statements speak only as at the date of this
document.
Qualified Persons
The technical information and opinions contained in this
announcement relating to Aurelian have been reviewed by Dr John
Smallwood BA (Cantab), MA, PhD (Cantab), FGS, C.Geol, Aurelian's
Exploration Director who has 18 years of post-graduate experience
in geoscience research, oil exploration and production. He has
reviewed and consented to the inclusion herein of such technical
information and opinions.
The technical information and opinions contained in this
announcement relating to San Leon have been reviewed by Dr John
Buggenhagen who has over 15 years experience in the oil and gas
industry. Dr Buggenhagen has a Ph. D. And M.Sc. in Geophysics from
the University of Wyoming and a B.Sc. in Geophysics from the
University of Arizona. He is currently the Director of Exploration
for San Leon and based in San Leon's Warsaw office in Poland and
has reviewed and consented to the inclusion herein of such
technical information and opinions.
Rule 2.10 requirement
In accordance with Rule 2.10 of the Code, San Leon confirms that
as at the date of this announcement, it has in issue and admitted
to trading on AIM, 1,144,004,250 ordinary shares of EUR0.05 each
(excluding any ordinary shares held in treasury). The International
Securities Identification Number ("ISIN") of the San Leon Shares is
IE00B3CLK236.
Publication of this announcement
A copy of this announcement will be available subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions on www.sanleonenergy.com and www.aurelianoil.com.
The contents of San Leon's website and Aurelian's website are
not incorporated into and do not form part of this
announcement.
Not for release, publication or distribution, in whole or in
part, directly or indirectly, in, into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction.
FOR IMMEDIATE RELEASE 12 November 2012
Recommended Merger
of
San Leon Energy plc
and
Aurelian Oil & Gas plc
SCHEME OF ARRANGEMENT OF Aurelian IN CONNECTION WITH ITS
RECOMMENDED MERGER WITH San Leon
1. Introduction
The Boards of Aurelian and San Leon are pleased to announce that
they have reached agreement on the terms of a recommended
merger.
The Boards of San Leon and Aurelian believe that the asset
portfolios of the two companies are highly complementary and the
Merger represents a compelling strategic and cultural fit which
will provide significant benefits to shareholders in the Enlarged
Company.
2. Summary of terms
Under the terms of the Merger, Aurelian Shareholders will be
entitled to receive:
1.3 New San Leon Shares for each Aurelian Share
Based on San Leon's closing middle market price of 9.59 pence
per San Leon Share on 9 November 2012, being the Business Day
immediately prior to the date of this announcement, the Merger
values each Aurelian Share at approximately 12.47 pence and the
whole of the issued share capital of Aurelian at approximately
GBP61.6 million and represents a premium of:
o 13.3 per cent. over the closing middle market price of 11.00
pence per Aurelian Share on 9 November 2012 (being the Business Day
immediately prior to the date of this announcement);
o 23.3 per cent. over the volume weighted average price of 10.11
pence per Aurelian Share in the one month period to 9 November 2012
(being the Business Day immediately prior to the date of this
announcement).
It is intended that the Merger will be implemented by means of a
court-sanctioned scheme of arrangement of Aurelian under Part 26 of
the Companies Act pursuant to which San Leon will acquire the
entire issued and to be issued share capital of Aurelian. The
Scheme requires approval by Aurelian Shareholders at the Court
Meeting and the General Meeting to be held immediately after the
Court Meeting. Further details of the Court-sanctioned scheme of
arrangement and the requisite Aurelian Shareholder approvals are
contained in paragraph 11 below.
Following the Merger becoming effective, based on the Merger
Ratio of 1.3 New San Leon Shares for every Aurelian Share held:
o existing Aurelian Shareholders will hold approximately 34 per
cent. of the Enlarged Company; and
o existing San Leon Shareholders will hold approximately 66 per
cent. of the Enlarged Company.
The New San Leon Shares will be issued credited as fully paid
and will rank in full for all dividends and other distributions
declared, made or paid by reference to a record date falling after
the date on which the Scheme becomes Effective and otherwise will
rank pari passu in all respects with the San Leon Shares in issue
at the time the New San Leon Shares are issued.
Fractions of New San Leon Shares will not be allotted to
Aurelian Shareholders but the entitlements of Aurelian Shareholders
will be rounded up or down (with 0.5 being rounded up) to the
nearest whole number of New San Leon Shares.
3. Background to and reasons for the Merger
The Boards of San Leon and Aurelian believe that the Enlarged
Company has the potential to become a leading exploration and
production company across Europe and North Africa. The two
companies have separately built extensive portfolios, particularly
in Poland, and the proposed Board of the Enlarged Company believes
that the Enlarged Group has the potential to deliver strong
shareholder value through the exploration and development of key
assets.
The Enlarged Group will unite the complementary asset portfolios
under a management structure with a strong technical background and
a track record of successfully commercialising its assets.
The Boards of San Leon and Aurelian believe the Enlarged Group
offers near term cash flow potential in Poland, through San Leon's
Nowa Sol oil targets in the Main Dolomite trend in the Southern
Permian Basin, and Aurelian's Siekierki gas project on its Poznan
concessions. The Boards also believe the Enlarged Group will
possess high impact growth potential in a well-balanced
conventional and unconventional exploration portfolio, particularly
in Poland, Morocco and Albania.
Following completion of the Merger, the Enlarged Company will
have one of the largest independent upstream asset positions in
Poland, covering more than 7 million gross acres (4.9 million acres
net to the Enlarged Group). It will also benefit from significant
exploration interests in Albania, Morocco and Spain while further
interests in Romania, Slovakia, Bulgaria, Germany, France, Ireland
and Italy complete a diversified range of opportunities. The
enlarged portfolio will comprise significant contingent and
prospective exploration and appraisal assets, both conventional and
unconventional.
Aurelian's portfolio, existing cash resources and utility
company relationships will enhance the early production focus of
San Leon in Poland's Permian Basin. Aurelian's partnership with
PGNiG provides a solid basis for the commercialisation of
hydrocarbon assets.
Key strengths, strategy and business plan
The Enlarged Group will benefit from a number of specific key
strengths, and the management teams of San Leon and Aurelian have
reached common agreement on a strategy for the Enlarged Group.
Both San Leon and Aurelian hold significant acreage positions in
Poland, and the Merger will make the Enlarged Group the largest
foreign acreage holder in that country. The merger of the asset
base and experienced management teams are expected to enable the
Enlarged Group to optimise the portfolio and expedite the path to
production.
The Enlarged Group intends to focus on low-cost early production
alongside higher value impact exploration plays.
Reinforcement of the key strengths of both companies
San Leon and Aurelian have both expanded their oil and gas
interests in Poland over the last five years. This transaction will
merge the assets, management capabilities and professional
relationships that San Leon and Aurelian have established.
The Polish portfolio of the Enlarged Group will hold contingent
and prospective resources of significant scale. The San Leon
management estimates the combined portfolio will have unrisked net
prospective unconventional resources of 6,700 mmboe, net contingent
conventional resources of approximately 66 mmboe and unrisked net
prospective conventional resources of approximately 114 mmboe in
the country. Shallow conventional oil provides a source of near
term cash-flow potential, particularly from the main dolomite
reservoir in the Permian Basin. Further details of the resources of
Aurelian and San Leon are set out at Appendix IV.
The proposed Board of the Enlarged Company believes the
directors and management of the Enlarged Company have a strong mix
of technical and commercial skill sets supported by strong
political relationships drawn from individually successful
independent oil and gas companies. The Merger will allow the
Enlarged Group to benefit from Aurelian's existing in-country
geophysical and geological staff. The Merger is expected to result
in the Enlarged Company being significantly better placed to
develop its key strategic relationships with its partners.
Focussed on Europe's unconventional potential
The Enlarged Group will hold a strategically significant
position across Europe's burgeoning unconventional play fairways.
In Poland alone, the Enlarged Group will hold the second largest
acreage position after PGNiG, and will be strategically positioned
in Spain to capitalise on large assets that hold both conventional
and unconventional potential.
While advancing its shale gas and tight gas projects in Poland,
the Enlarged Company will also combine resources to focus on income
generative low cost early production opportunities.
Efficient business model with captive services
The Enlarged Group brings together many capabilities including
geophysical and geological teams, reservoir/petroleum engineering,
planning/permitting, seismic acquisition and processing and
drilling expertise.
The Enlarged Group plans to build on the success of San Leon's
NovaSeis subsidiary, which has allowed efficient, flexible and fast
seismic acquisition across Poland when third party service
contractors would have cost more and restrained the ability to
complete work programmes.
Efficient and modern seismic acquisition provides a competitive
advantage, particularly important in on-shore Europe, where service
quality can be challenging and costs can be high.
Farm-out high impact offshore assets
San Leon has built a high impact offshore asset base with the
potential for exceptional returns. The Enlarged Company anticipates
the farm-out of its Foum Draa and Sidi Moussa licences offshore
Morocco, to Cairn Energy plc and Genel Energy plc respectively,
will result in two exploration wells being drilled in
2013/2014.
San Leon's exploration team has completed a Pre Stack Depth
Migration of its 2011 Albania Durresi Block 3D seismic survey, and
is operating a data room to solicit interest from potential
partners through November and December 2012. The management of San
Leon estimates 1,000 mmboe of prospective resources and plan to
partner with a company that will see a well being drilled in late
2013 / early 2014.
Furthermore, San Leon has received expressions of interest in
its offshore Ireland blocks, particularly the Benbaun prospect in
the North Porcupine basin where newly interpreted 3D seismic data
estimates 180 mmbbls of prospective recoverable oil.
Transaction capabilities and portfolio management
The Enlarged Group will conduct a full combined portfolio review
where key projects will be prioritised by their near term
production potential. Disposals, further mergers or acquisitions,
and farm-ins will be a core part of the forward strategy. San Leon
has proven transaction skills, having undertaken three public
market acquisitions and executed farm-in agreements with a number
of leading industry players such as Talisman Energy Inc., Cairn
Energy plc and Genel Energy plc. The Enlarged Group will consider
farm-out opportunities which provide enhanced validation to the
assets of the Enlarged Group as well as providing an important
source of funding.
The proposed management of the Enlarged Group will implement a
strategy to maximise the value of the existing asset base. When the
Scheme becomes Effective the Enlarged Group is expected to have
approximately $50 million of cash and an optional GBP15 million
equity drawdown facility available to fund its ongoing plans. The
combination of cash, the equity facility and success in its
multiple farm-out activities are expected to fund the planned
activities set out in Table A (below)
Table A
2012 Planned Activity
San Leon Licences* Aurelian Licences**
Country Licence Activity
-------- ------------ ---------------------------
Poland Nowa Sol* Complete drilling
/ testing of Lelchow
SL-1 & Czas aw SL-1
Wells
-------- ------------ ---------------------------
Gora* Siciny-2 vertical
frac and production
test
-------- ------------ ---------------------------
Siekierki** Farm-out in progress
-------- ------------ ---------------------------
Other Continue NovaSeis
2D and 3D seismic
acquisition across
combined portfolio
-------- ------------ ---------------------------
Albania Durresi* Farm-out in progress
-------- ------------ ---------------------------
Other Continue farm-out
of high interest licences
-------- ------------ ---------------------------
2013 Planned Activity
San Leon Licences* Aurelian Licences**
Country Licence Activity
-------- ------------------------ -----------------------------
Poland Nowa Sol* Dependent on result
of Lelchow SL-1 &
Czas aw SL-1 wells,
continue drilling
further wells
-------- ------------------------ -----------------------------
Gdansk West*, Braniewo* Carried horizontal
& Szczawno* well in one of the
licences prior to
decision to proceed
to drilling a further
well on each of the
three licences. Test
existing vertical
wells
-------- ------------------------ -----------------------------
Siekierki** T3 test & EPF
Farm-out completed
-------- ------------------------ -----------------------------
Cybinka** Drill Cybinka-1 Well
-------- ------------------------ -----------------------------
Karpaty West** Up to 3 well program
on Karpaty West
-------- ------------------------ -----------------------------
Other Continue NovaSeis
operated 2D and 3D
seismic acquisition
across combined portfolio
-------- ------------------------ -----------------------------
Romania Brodina** Drilling Putna-1 Well
-------- ------------------------ -----------------------------
Albania Durresi* Complete farm-out
and drill first exploration
well
-------- ------------------------ -----------------------------
Morocco Foum Draa* Carried high impact
exploration well
-------- ------------------------ -----------------------------
Sidi Moussa* Finalise well planning
for 2014 carried high
impact exploration
well
-------- ------------------------ -----------------------------
Other Continue farm-out
of high interest licences
-------- ------------------------ -----------------------------
4. Recommendation
The Aurelian Board has been advised by Greenhill and Oriel. The
Aurelian Board, which has been so advised by Greenhill (as the
independent advisor for the purposes of the Takeover Code),
considers the terms of the Merger to be fair and reasonable. In
providing its advice, Greenhill has taken into account the
commercial assessments of the Aurelian Board.
Accordingly, the Aurelian Board intends unanimously to recommend
that Aurelian Shareholders vote in favour of the resolutions to be
proposed at the Court Meeting and the General Meeting which are to
be convened to approve the Merger, as the Aurelian Directors have
irrevocably undertaken to do in respect of their own personal
interests in Aurelian which amount in aggregate to 3,617,595
Aurelian Shares, representing approximately 0.73 per cent. of the
existing issued share capital of Aurelian (as described in Appendix
III). These irrevocable undertakings do not lapse in the event of a
higher competing offer being made for Aurelian.
The San Leon Board has been advised by Fox-Davies Capital.
5. Irrevocable undertakings and letter of intent to vote in favour of the Merger
San Leon has received irrevocable undertakings to vote in favour
of the Scheme at the Court Meeting and the resolutions to effect
the Merger at the General Meeting (or, in the event that the Merger
is implemented by way of Takeover Offer, to accept or procure the
acceptance of such offer) from Kulczyk Investments S.A., Toscafund
Asset Management LLP and Lord Sainsbury in respect of an aggregate
total of 207,866,958 Aurelian Shares representing approximately
42.06 per cent. of the issued ordinary share capital of
Aurelian.
The irrevocable undertakings given by each of Toscafund Asset
Management LLP and Kulczyk Investments S.A. will cease to be
binding in circumstances where they have provided notice to San
Leon that they intend to accept a third party proposal to acquire
the entire issued share capital of Aurelian and such proposal:
(i) represents a substantially improved proposal when compared with the Merger; and
(ii) a period of ten days has elapsed from the announcement of
such third party offer without San Leon having revised the terms of
the Merger so that the value of the revised Merger exceeds the
value of the proposal by such third party.
The irrevocable undertakings given by Lord Sainsbury will cease
to be binding in circumstances where he has provided notice to San
Leon that he intends to accept a third party proposal to acquire
the entire issued share capital of Aurelian and such proposal:
(i) represents a substantially improved proposal when compared with the Merger;
(ii) is recommended by the board of directors of Aurelian; and
(iii) a period of ten days has elapsed from the announcement of
such third party offer without San Leon having revised the terms of
the Merger so that the value of the revised Merger exceeds the
value of the proposal by such third party.
In addition, a letter of intent has been received from Cheyne
Capital Management (UK) LLP in relation to 23,598,420 Aurelian
Shares representing approximately 4.77 per cent. of the issued
ordinary share capital of Aurelian confirming its current intention
to use its reasonable endeavours to persuade the owner of
23,598,420 Aurelian Shares, in relation to which it holds contract
for difference, to vote in favour of the Merger.
In aggregate, therefore, irrevocable undertakings and letters of
intent to vote in favour of the Scheme at the Court Meeting and the
resolutions to effect the Merger at the General Meeting (or to
accept or procure the acceptance of any offer in the event that the
Merger is implemented by way of Takeover Offer) have been received
in respect of a total of 235,082,973 Aurelian Shares, representing
approximately 47.56 per cent. of the ordinary share capital of
Aurelian in issue.
Further details of these irrevocable undertakings, the
irrevocable undertakings referred to in paragraph 4 and the letter
of intent are set out in Appendix III of this announcement.
6. Management and employees
San Leon confirms that, following implementation of the Merger,
the existing contractual and statutory employment rights, including
in relation to pensions, of all Aurelian Group employees will be
fully safe guarded.
Following implementation of the Merger, the Enlarged Company
will be led by a management team comprising Oisin Fanning as
Executive Chairman, Paul Sullivan as Managing Director and John
Buggenhagen as Exploration Director. The Board of the Enlarged
Company will also include John Conlin (the current Chairman of
Aurelian), John Matthews (the acting Finance Director of Aurelian),
Piotr Rozwadowski (a current Non-Executive Director of Aurelian),
Ray King (the current Company Secretary of San Leon), Con Casey (a
current Non-Executive Director of San Leon), Daniel Martin (a
current Non-Executive Director of San Leon) and Dr. Jeremy Boak (a
current Non-Executive Director of San Leon). Upon the Scheme
becoming Effective each of Rowen Bainbridge, John Smallwood, David
Prior, Dariusz Mioduski and David Walker have agreed to step down
as Directors of Aurelian.
7. Information on the San Leon Group
San Leon is a specialist oil and gas company with an extensive
portfolio of assets across Europe and North Africa. San Leon has
built the largest unconventional acreage position in Europe and has
balanced its portfolio by obtaining conventional exploration
licences that offer near term revenue and/or the potential for high
impact value creation.
San Leon achieved this position through an innovative and
dynamic business strategy where it has used its technical and
commercial abilities to take advantage of market opportunities.
San Leon is dedicated to building long-term reserves and
creating sustainable significant shareholder value.
San Leon already manages substantial oil and gas projects in
Poland, Albania, Morocco, Spain, Ireland, France, Italy and
Germany.
8. Information on the Aurelian Group
Aurelian is a European focused exploration and appraisal company
engaged in evaluation, exploration, appraisal and development of
onshore hydrocarbon resources and the application of proven
technologies to underexplored hydrocarbon systems.
Aurelian has acquired joint venture interests in onshore
licences in Poland, Slovakia, Romania and Bulgaria. Aurelian's
licences lie in mature petroleum producing provinces in Central
Europe. Aurelian has focussed on exploration and appraisal
activities in two core areas. The first core area is in the
southern Permian Basin and the second core area is in the
Carpathian thrust belt. The two core areas are separate, and each
has its own distinctive geology, giving diversity to the play types
within the portfolio. Many of the licences have seen extensive past
activity, but nonetheless they have remaining exploration
potential. Much of the potential for the company is reflected in
licences which have as yet had little modern exploration, but which
are in existing play fairways that offer tested potential. Aurelian
holds interests in 29 hydrocarbon licences and out of these 24 are
located in Poland. More than 95 per cent. of the contingent
resource value of Aurelian is in the Siekierki tight gas field
which is found in the Poznan North and Poznan East Blocks in
Poland.
Historically, many of Aurelian's licences have seen previous
exploration and production activity, including seismic acquisition,
exploration and appraisal drilling, and in some cases commercial
production. During the Soviet era, the technologies and methods
often achieved poor results in well and structural evaluation.
Although many of the licences contain discoveries, significant
further appraisal is needed. The technologies currently applied by
Aurelian include modern 2D seismic, 3D seismic and the drilling of
MFHWs.
9. Aurelian Share Schemes
Participants in the Aurelian Share Schemes will be contacted
regarding the effect of the Merger on their rights under the
Aurelian Share Schemes and appropriate proposals will be made to
such participants in accordance with the relevant plan rules.
Further details of the terms of such proposals will be provided in
due course to participants in the Aurelian Share Schemes in
accordance with the Aurelian Employee Incentives Agreement (as
summarised in paragraph 14 below).
10. Termination of Relationship and Area of Mutual Interest
Agreement with Kulczyk Investments S.A.
On 11 November 2012, Aurelian terminated its Relationship and
Area of Mutual Interest Agreement with Kulczyk Investments S.A.
Following the completion of the Merger, San Leon intends to
negotiate a new arrangement with Kulczyk Investments S.A. in this
regard.
11. Structure of the Merger
It is intended that the Merger will be implemented by means of a
court-sanctioned scheme of arrangement of Aurelian under Part 26 of
the Companies Act (including the Reduction of Capital under section
641 of the Companies Act).
The purpose of the Scheme is to provide for San Leon to become
the owner of the entire issued and to be issued share capital of
Aurelian. In order to achieve this, the Scheme Shares will be
cancelled and the reserve arising from such cancellation will be
used to pay up in full such number of new Aurelian Shares as is
equal to the number of Scheme Shares so cancelled and to issue
those new Aurelian Shares to San Leon (and/or its nominee(s)). In
consideration for this, the Scheme Shareholders will receive New
San Leon Shares on the basis set out in paragraph 2 of this
announcement. The cancellation of those Scheme Shares and the
subsequent issue of the new Aurelian Shares to San Leon will result
in Aurelian becoming a wholly owned subsidiary of San Leon.
The Scheme requires approval by Aurelian Shareholders by the
passing of a resolution at the Court Meeting. This resolution must
be approved by a majority in number of the holders of Aurelian
Shares present and voting, either in person or by proxy,
representing not less than three-fourths in value of the Aurelian
Shares held by such holders. In addition, the implementation of the
Scheme requires approval by the passing of a special resolution at
the General Meeting to be held immediately after the Court
Meeting.
The Scheme and the associated Reduction of Capital must also be
sanctioned by the Court. All Aurelian Shareholders are entitled to
attend the Court Hearing in person or through counsel to support or
oppose the sanctioning of the Scheme. The Scheme and Reduction of
Capital will only become Effective upon delivery to the Registrar
of Companies of a copy of the Court Order and the Statement of
Capital (and, if the Court so orders, upon registration by him of
the Court Order and Statement of Capital).
The Scheme is also subject to certain Conditions and certain
further terms referred to in Appendix I of this announcement and to
be set out in the Scheme Circular.
San Leon reserves the right to switch from implementing the
Merger by means of a scheme of arrangement under Part 26 of the
Companies Act to a Takeover Offer, in accordance with paragraph 8
of Appendix 7 of the Code, with the consent of the Panel.
Once the Scheme becomes Effective, it will be binding on all
Scheme Shareholders, whether or not they voted at the Court Meeting
and the General Meeting and, if they did vote, whether or not they
voted in favour of or against the resolutions proposed at those
meetings.
12. De-listing and re-registration
It is intended that dealings in Aurelian Shares will be
suspended at the Scheme Record Time and that no transfers of
Aurelian Shares will be registered after that time.
Application will be made to the London Stock Exchange for the
cancellation of admission to trading of the Aurelian Shares to AIM
upon or shortly after the Scheme becoming Effective. When the
Scheme becomes Effective, the Scheme Shares will be cancelled. At
that point the share certificates in respect of Aurelian Shares
will cease to be valid and entitlements to Aurelian Shares held in
CREST will be cancelled.
It is intended that Aurelian will be re-registered as a private
company with effect from the Scheme becoming Effective.
13. Settlement, listing and dealing of New San Leon Shares
Once the Scheme has become Effective, New San Leon Shares will
be allotted to former Aurelian Shareholders.
It is intended that applications will be made to AIM of the
London Stock Exchange for the New San Leon Shares to be admitted to
trading on AIM. It is expected that admission of the New San Leon
Shares to AIM will become effective, and that dealings for normal
settlement in the New San Leon Shares will commence, at 8.00 a.m.
on the Business Day after the date on which the Scheme becomes
Effective.
The existing San Leon Shares are admitted to CREST. It is
expected that all of the New San Leon Shares, when issued and fully
paid, will be capable of being held and transferred by means of
CREST. It is expected that the New San Leon Shares will trade under
ISIN IE00B3CLK236.
Further details on listing, dealing and settlement will be
included in the Scheme Circular.
14. Offer-related arrangements
Aurelian and San Leon have entered into a mutual confidentiality
agreement under which:
-- each party undertook to keep confidential information
relating to the other party and not to disclose it to third parties
(other than to permitted projects) unless required by law or
regulation for a period of two years from the date of the
agreement;
-- San Leon undertook not to acquire any interest in Aurelian
Shares for a period of 12 months from the date of the agreement
without the consent of the Aurelian Board; and
-- the parties undertook, for a period expiring six months after
negotiations between the parties have terminated, not to solicit
the employees of the other party.
Aurelian and San Leon have entered into an agreement (the
"Aurelian Employee Incentives Agreement") under which:
-- holders of existing options over Aurelian Shares will
rollover their options into replacement options in San Leon Shares.
Each replacement option will be over 1.3 San Leon Shares for each
Aurelian Share, and the aggregate exercise price for each
replacement option will be equal to the aggregate exercise price
relating to the existing option;
-- holders of interests in Aurelian Shares under certain
part-ownership arrangements will waive and transfer all rights
under such arrangements to the trustee of Aurelian's employee
benefit trust (the "Trustee"). In consideration, the Trustee will
waive any obligation of the holders of these interests to make a
payment in relation to the acquisition of the interests. To the
extent that such waiver gives rise to employment tax and national
insurance liabilities (or the overseas equivalent), Aurelian will
make (on a fully grossed up basis) an additional payment so that
such liabilities are met by Aurelian on behalf of the
individuals;
-- San Leon will grant options over San Leon Shares to employees
of Aurelian relating to annual and joiner share bonuses which
Aurelian should have granted (but could not grant due to regulatory
constraints) in respect of the 2011 and 2012 financial years;
-- Aurelian will pay cash and share option bonuses to eligible
employees of Aurelian in respect of the 2012 performance year;
and
-- the Aurelian Employee Incentives Agreement is conditional on
obtaining relevant approvals (including from the Panel), prior
consent from the Trustee and the Scheme not having been withdrawn
or lapsing (save where there is an announcement that the Merger
will be implemented by different means).
15. Enlarged company dividend policy
It is not the intention of the Enlarged Company to make
distributions by way of dividend payments for the foreseeable
future following the completion of the Merger. The Boards of
Aurelian and San Leon consider that it will be in the Enlarged
Company's shareholders' best interests to reinvest the profits of
the Enlarged Group in business growth opportunities. The Board of
the Enlarged Company will regularly review and possibly adjust the
dividend policy as the Enlarged Group's asset portfolio and
financial position develop over the forthcoming years.
16. Overseas shareholders
The availability of the New San Leon Shares under the terms of
the Merger to persons not resident in the United Kingdom may be
affected by the laws and regulations of the relevant jurisdiction.
Such persons should inform themselves about and observe any
applicable requirements. Further details in relation to overseas
shareholders will be contained in the Scheme Circular.
This announcement does not constitute an offer or invitation to
purchase any securities.
17. Disclosure of interests in Aurelian Shares
On the date of this announcement, San Leon will make an Opening
Position Disclosure setting out details of its and the San Leon
Directors' interests or short positions in, or rights to subscribe
for, any relevant securities of Aurelian and San Leon.
San Leon's Opening Position Disclosure will not include details
of all interests or short positions in or rights to subscribe for,
any relevant securities of Aurelian or San Leon held by all other
persons acting in concert with San Leon. If required, San Leon will
make a further opening position disclosure as soon as possible
disclosing these details.
On the date of this announcement, Aurelian will make an Opening
Position Disclosure setting out details of its, the Aurelian
Directors', Greenhill's and Oriel's interests or short positions
in, or rights to subscribe for, any relevant securities of Aurelian
and San Leon.
Aurelian's Opening Position Disclosure will not include details
of all interests or short positions in or rights to subscribe for,
any relevant securities of Aurelian or San Leon held by all persons
acting in concert with Aurelian. If required, Aurelian will make a
further Opening Position Disclosure as soon as possible disclosing
these details.
18. Expected timetable
Further details of the Scheme will be contained in the Scheme
Circular which will be sent to Aurelian Shareholders as soon as
practicable and in any event within 28 days of this announcement
unless otherwise agreed with the Panel.
Further details on the timetable for implementation of the
Scheme will be set out in the Scheme Circular, which will also
include the notices of the Court Meeting and the General Meeting
and specify the necessary actions to be taken by Aurelian
Shareholders. It is currently expected that the Scheme Circular
will be posted prior to the end of November 2012 and that the Court
Meeting and General Meeting will be held prior to the end of the
year.
Subject to satisfaction or waiver of the relevant Conditions as
set out in Appendix I to this announcement, the Scheme is currently
expected to become Effective in early 2013.
19. Documents available on website
Copies of the following documents will shortly be available at
www.sanleonenergy.com until the Scheme has become Effective or has
lapsed or been withdrawn:
-- the irrevocable undertakings referred to in paragraph 4 above
and summarised in Appendix III of this announcement;
-- the irrevocable undertakings and letter of intent referred to
in paragraph 5 above and summarised in Appendix III of this
announcement;
-- the Mutual Confidentiality Agreement; and
-- the Aurelian Employee Incentives Agreement.
20. General
The Merger will be made subject to the Conditions and on the
terms contained in Appendix I to this announcement and on the
further terms and Conditions to be set out in the Scheme Circular.
The Scheme will be governed by English law and subject to the
applicable rules and regulations of the London Stock Exchange, the
Panel and the FSA.
The Conditions and certain further terms of the Merger are set
out in Appendix I to this announcement. Appendix II contains
details of the sources and bases of certain information contained
in this announcement. Appendix III contains further details of the
irrevocable undertakings to vote in favour of the Merger given to
San Leon. Appendix V contains the definitions of certain terms used
in this announcement and Appendix VI contains a glossary of
acronyms and technical terms used in this announcement.
A conference call for analysts and professional investors will
be held at 8.30am today. Dial in details can be obtained from
College Hill - telephone +44 (0)20 7457 2020.
Enquiries:
San Leon Energy plc +353 1291 6292
020 36173913
Oisin Fanning
John Buggenhagen
Fox-Davies Capital Limited (financial adviser
and joint broker to San Leon) 020 3463 5000
Susan Walker
Daniel Fox-Davies
Westhouse Securities Limited (nominated adviser
to San Leon) 020 7601 6100
Richard Johnson
Antonio Bossi
College Hill (public relations adviser to San
Leon) 020 7457 2020
Rupert Trefgarne
Alexandra Roper
Plunkett PR (public relations adviser to San
Leon in Republic of Ireland) +353 1 2844414
Sharon Plunkett
Aurelian Oil and Gas plc
Rowen Bainbridge, CEO 020 7629 7986
Greenhill & Co LLP (joint financial and Rule
3 adviser to Aurelian) 020 7198 7400
Mark Bentley
Anastasia Fadeeva
Oriel Securities Limited (joint financial adviser
and broker to Aurelian) 020 7710 7600
David Arch
James Brodie
RFC Ambrian Limited (nominated advisor to Aurelian) 020 3440 6800
Richard Morrison
College Hill (public relations adviser to Aurelian) 020 7457 2020
Matthew Tyler
Catherine Wickman
Further information
This announcement is not intended to and does not constitute, or
form part of, any offer to sell or subscribe for or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Merger or
otherwise, nor shall there be any sale, issuance or transfer of
securities of Aurelian and/or San Leon in any jurisdiction in
contravention of applicable law. This announcement does not
constitute a prospectus or a prospectus equivalent document.
Any vote in respect of the Merger should only be made on the
basis of the information contained in the Scheme Circular, which
will contain the full terms and conditions of the Merger (including
details of how to vote). Aurelian Shareholders are advised to read
the Scheme Circular carefully once they have been dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by Aurelian Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from Aurelian may be provided to San
Leon during the Offer Period as required under Section 4 of
Appendix 4 of the Code.
Fox-Davies Capital Limited which is authorised and regulated in
the United Kingdom by the FSA, is acting for San Leon as financial
adviser in relation to the Merger and is not acting for any other
person in relation to such Merger. Fox-Davies Capital Limited will
not be responsible to anyone other than San Leon for providing the
protections afforded to clients of Fox-Davies Capital Limited or
for providing advice in relation to this announcement or any other
matter referred to herein.
Greenhill & Co. International LLP which is authorised and
regulated in the United Kingdom by the FSA, is acting exclusively
for Aurelian and no-one else in connection with the Merger and will
not be responsible to anyone other than Aurelian for providing the
protections afforded to clients of Greenhill & Co.
International LLP nor for providing advice in relation to the
Merger or any other matter referred to herein.
Oriel Securities Limited which is authorised and regulated in
the United Kingdom by the FSA, is acting exclusively for Aurelian
and no-one else in connection with the Merger and will not be
responsible to anyone other than Aurelian for providing the
protections afforded to clients of Oriel Securities Limited nor for
providing advice in relation to the Merger or any other matter
referred to herein.
Overseas jurisdictions
The availability of New San Leon Shares in, and the release,
publication or distribution of this announcement in or into,
jurisdictions other than the United Kingdom may be restricted by
law and therefore persons into whose possession this announcement
comes who are not resident in the United Kingdom should inform
themselves about, and observe any applicable restrictions. Aurelian
Shareholders who are in any doubt regarding such matters should
consult an appropriate independent adviser in the relevant
jurisdiction without delay. Any failure to comply with such
restrictions may constitute a violation of the securities laws of
any such jurisdiction.
This announcement has been prepared for the purposes of
complying with English law, the Takeover Code and the AIM Rules and
the information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside the United
Kingdom.
Notes to US investors
Shareholders in the United States should note that the
acquisition of Aurelian by San Leon relates to the shares of a
"foreign private issuer" as defined under Rule 3b-4 under the US
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and is proposed to be made by means of a scheme of arrangement
provided for under, and governed by, English law. Neither the proxy
solicitation nor the tender offer rules under the Exchange Act will
apply to the Scheme. Moreover, the Scheme will be subject to the
disclosure requirements and practices applicable in the UK to
schemes of arrangement, which differ from the disclosure
requirements of the US proxy solicitation rules and tender offer
rules. Financial information included in this announcement has been
or will be prepared in accordance with accounting standards
applicable in the UK and may not be comparable to financial
information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting
principles in the United States.
Aurelian is organised under the laws of England and San Leon is
organised under the laws of Ireland. To the extent that Aurelian's
and San Leon's officers and directors are residents of countries
other than the United States it may not be possible to effect
service of process on Aurelian, San Leon, or their respective
officers or directors in a non-US court for violations of US
securities laws. It may be difficult to compel Aurelian, San Leon,
their respective affiliates, and/or the respective officers or
directors of each, to subject themselves to the jurisdiction and
judgment of any US court.
The New San Leon Shares to be issued pursuant to the Scheme have
not been and will not be registered under the US Securities Act of
1933, as amended (the "US Securities Act") or under the relevant
securities laws of any state or territory or other jurisdiction of
the United States. Accordingly, the New San Leon Shares may not be
offered, sold, resold, delivered, distributed or otherwise
transferred, directly or indirectly, in or into the United States,
or to or for the account or benefit of any US Person, absent
registration under the US Securities Act or an exemption therefrom.
The New San Leon Shares are expected to be offered in the United
States, if at all, in reliance upon the exemption from the
registration requirements of the US Securities Act provided by
Section 3(a)(10) thereof. None of the securities referred to in
this document have been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission
in the United States or any other US regulatory authority, nor have
such authorities passed upon or determined the adequacy or accuracy
of this document. Any representation to the contrary is a criminal
offence in the United States. This document does not constitute an
offer to sell, or the solicitation of any offer to buy, any New San
Leon Shares in any jurisdiction in which such an offer or
solicitation would be unlawful.
The New San Leon Shares to be issued pursuant to the Scheme have
not been and will not be registered under the relevant securities
laws of Japan and the relevant clearances have not been, and will
not be, obtained from the securities commission of any province of
Canada or Australia. Accordingly, the New San Leon Shares are not
being, and may not be, offered, sold, resold, delivered or
distributed, directly or indirectly in or into Canada, Australia or
Japan or any other jurisdiction if to do so would constitute a
violation of relevant laws of, or require registration thereof in,
such jurisdiction (except pursuant to an exemption, if available,
from any applicable registration requirements or otherwise in
compliance with all applicable laws). No prospectus in relation to
the New San Leon Shares has been, or will be, lodged with, or
registered by, the Australian Securities and Investments
Commission.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of Aurelian
or of any paper offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is
likely to be, solely in cash) must make an Opening Position
Disclosure following the commencement of the Offer Period and, if
later, following the announcement in which any paper offeror is
first identified. An Opening Position Disclosure must contain
details of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i)
Aurelian and (ii) any paper offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10th Business Day
following the commencement of the Offer Period and, if appropriate,
by no later than 3.30 pm (London time) on the 10th Business Day
following the announcement in which any paper offeror is first
identified. Relevant persons who deal in the relevant securities of
Aurelian or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of Aurelian or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of
Aurelian or of any paper offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) Aurelian and (ii) any paper offeror, save
to the extent that these details have previously been disclosed
under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b)
applies must be made by no later than 3.30 pm (London time) on the
Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of Aurelian or a paper offeror,
they will be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must also be made by Aurelian and
by any offeror and Dealing Disclosures must also be made by
Aurelian, by any offeror and by any persons acting in concert with
any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the Offer Period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Please be aware that addresses, electronic addresses and certain
other information provided by Aurelian Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from Aurelian may be provided to San
Leon during the Offer Period as required under Section 4 of
Appendix 4 of the Code.
This announcement contains certain forward-looking statements,
including statements regarding San Leon's and Aurelian's plans,
objectives and expected performance. Such statements relate to
events and depend on circumstances that will occur in the future
and are subject to risks, uncertainties and assumptions. There are
a number of factors which could cause actual results and
developments to differ materially from those expressed or implied
by such forward looking statements, including, among others the
enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences;
fluctuations in demand and pricing in the energy industry;
fluctuations in exchange controls; changes in government policy and
taxations; industrial disputes; war and terrorism. These
forward-looking statements speak only as at the date of this
document.
Qualified Persons
The technical information and opinions contained in this
announcement relating to Aurelian have been reviewed by Dr John
Smallwood BA (Cantab), MA, PhD (Cantab), FGS, C.Geol, Aurelian's
Exploration Director who has 18 years of post-graduate experience
in geoscience research, oil exploration and production. He has
reviewed and consented to the inclusion herein of such technical
information and opinions.
The technical information and opinions contained in this
announcement relating to San Leon have been reviewed by Dr John
Buggenhagen who has over 15 years experience in the oil and gas
industry. Dr Buggenhagen has a Ph. D. And M.Sc. in Geophysics from
the University of Wyoming and a B.Sc. in Geophysics from the
University of Arizona. He is currently the Director of Exploration
for San Leon and based in San Leon's Warsaw office in Poland and
has reviewed and consented to the inclusion herein of such
technical information and opinions.
Rule 2.10 requirement
In accordance with Rule 2.10 of the Code, San Leon confirms that
as at the date of this announcement, it has in issue and admitted
to trading on AIM, 1,144,004,250 ordinary shares of EUR0.05 each
(excluding any ordinary shares held in treasury). The International
Securities Identification Number ("ISIN") of the San Leon Shares is
IE00B3CLK236.
Publication of this announcement
A copy of this announcement will be available subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions on www.sanleonenergy.com and www.aurelianoil.com.
The contents of San Leon's website and Aurelian's website are
not incorporated into and do not form part of this
announcement.
Appendix I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE MERGER
Part 1 Conditions of the Merger
1. The Scheme will be conditional on:
(a) its approval by a majority in number of the holders of
Aurelian Shares present, entitled to vote and voting at the Court
Meeting, or at any adjournment thereof, either in person or by
proxy, representing not less than three-quarters in value of the
Aurelian Shares held by such holders;
(b) the special resolution required to approve and implement the
Scheme (including, without limitation, to amend Aurelian's articles
of association) being duly passed by the requisite majority of the
Aurelian Shareholders at the General Meeting, or at any adjournment
thereof;
(c) the sanction of the Scheme and confirmation of the reduction
of capital involved therein by the Court (in both cases with or
without modifications, on terms reasonably acceptable to Aurelian
and San Leon);
(d) office copies of the Court Order (and the Statement of
Capital) being delivered for registration to the Registrar of
Companies and, if the Court so orders, the registration of the
Court Order and Statement of Capital by him; and
(e) the Scheme becoming unconditional and becoming Effective by
no later than the Long-Stop Date.
2. The Merger is also conditional on the following conditions
having been satisfied or, where applicable, waived and accordingly
the necessary actions to make the Scheme Effective will not be
taken unless such conditions have been so satisfied or waived:
(a) the London Stock Exchange having acknowledged to San Leon or
its agent (and such acknowledgement not having been withdrawn) that
the New San Leon Shares will be admitted to trading on AIM;
(b) no government or governmental, quasi-governmental,
supranational, statutory, administrative or regulatory body,
authority, court, trade agency, association, institution,
environmental body or any other person or body in any jurisdiction
(each a "Relevant Authority") having decided to take, instituted,
implemented or threatened any action, proceedings, suit,
investigation, enquiry or reference, or made, proposed or enacted
any statute, regulation, order or decision or taken any other steps
and there not continuing to be outstanding any statute, regulation,
order or decision, which would or might:
(i) make the Merger or the acquisition of any Aurelian Shares,
or control of Aurelian by San Leon void, illegal or unenforceable
or otherwise materially restrict, restrain, prohibit, delay or
interfere with the implementation thereof, or impose material
additional conditions or obligations with respect thereto, or
require material amendment thereof or otherwise challenge or
interfere therewith;
(ii) require or prevent the divestiture by any member of the
Aurelian Group or any company of which 20 per cent. or more of the
voting capital is held by any member of the Aurelian Group or any
partnership, joint venture, firm or company in which any member of
the Aurelian Group may be interested (the "wider Aurelian Group")
or by any member of the San Leon Group or any associated
undertaking or any company of which 20 per cent. or more of the
voting capital is held by the San Leon Group or any partnership,
joint venture, firm or company in which any member of the San Leon
Group may be interested (the "wider San Leon Group") of all or a
material portion of their respective businesses, assets or property
or impose any material limitation on the ability of any of them to
conduct their respective businesses or own any of their material
assets or property;
(iii) impose any limitation on or result in a delay in the
ability of any member of the wider Aurelian Group or the wider San
Leon Group to acquire or to hold or to exercise effectively any
rights of ownership of shares or loans or securities convertible
into shares in any member of the wider Aurelian Group or of the
wider San Leon Group held or owned by it or to exercise management
control over any member of the wider Aurelian Group or of the wider
San Leon Group to an extent which is material in the context of the
Aurelian Group taken as a whole or, as the case may be, the San
Leon Group taken as a whole;
(iv) require any member of the wider San Leon Group or the wider
Aurelian Group to acquire or offer to acquire any shares or other
securities in any member of the wider Aurelian Group where such
acquisition would be material in the context of the Aurelian Group
taken as a whole; or
(v) otherwise materially and adversely affect the assets,
business, profits or prospects of any member of the wider San Leon
Group or of any member of the wider Aurelian Group;
and all applicable waiting and other time periods during which
any such Relevant Authority could decide to take, institute,
implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference having expired, lapsed or been
terminated;
(c) all necessary notifications and filings having been made,
all applicable waiting periods (including any extensions thereof)
under any applicable legislation or regulations of any jurisdiction
having expired, lapsed or been terminated, in each case in respect
of the Merger and the acquisition of any Aurelian Shares, or of
control of Aurelian, by San Leon, and all authorisations, orders,
recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals ("Authorisations") necessary
or appropriate in any jurisdiction for, or in respect of, the
Merger and the proposed acquisition of any Aurelian Shares, or of
control of Aurelian, by San Leon and to carry on the business of
any member of the wider San Leon Group or of the wider Aurelian
Group having been obtained, in terms and in a form satisfactory to
San Leon, from all appropriate Relevant Authorities and from any
persons or bodies with whom any member of the wider San Leon Group
or the wider Aurelian Group has entered into contractual
arrangements and all such Authorisations remaining in full force
and effect at the time at which the Merger becomes Effective and
San Leon having no knowledge of an intention or proposal to revoke,
suspend or modify or not to renew any of the same and all necessary
statutory or regulatory obligations in any jurisdiction having been
complied with;
(d) except as publicly announced by Aurelian prior to the date
hereof (by the delivery of an announcement to a Regulatory
Information Service), there being no provision of any arrangement,
agreement, licence, permit or other instrument to which any member
of the wider Aurelian Group is a party or by or to which any such
member or any of their assets is or may be bound, entitled or be
subject to and which, in consequence of the Merger, the acquisition
or proposed acquisition of any Aurelian Shares, or control of
Aurelian, by San Leon or issuance or proposed issuance of New San
Leon Shares to Scheme Shareholders or otherwise, would or might, to
an extent which is material in the context of the Aurelian Group
taken as a whole, result in:
(i) any monies borrowed by, or other indebtedness actual or
contingent of, any such member of the wider Aurelian Group being or
becoming repayable or being capable of being declared immediately
or prior to its or their stated maturity or the ability of any such
member to borrow monies or incur any indebtedness being inhibited
or becoming capable of being withdrawn;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any member of the wider Aurelian Group or any
such security (whenever arising or having arisen) being enforced or
becoming enforceable;
(iii) any such arrangement, agreement, licence or instrument of
any member of the wider Aurelian Group being terminated or
adversely modified or any action being taken of an adverse nature
or any obligation or liability arising thereunder;
(iv) any assets of any member of the wider Aurelian Group being
disposed of or charged, or right arising under which any such asset
could be required to be disposed of or charged, other than in the
ordinary course of business;
(v) the interest or business of any member of the wider Aurelian
Group in or with any firm or body or person, or any agreements or
arrangements relating to such interest or business, being
terminated or adversely modified or affected;
(vi) any member of the wider Aurelian Group ceasing to be able
to carry on business under any name under which it presently does
so;
(vii) the creation of liabilities (actual or contingent) by any
member of the wider Aurelian Group; or
(viii) the financial or trading position of any member of the
wider Aurelian Group being prejudiced or adversely affected;
(e) except as publicly announced by Aurelian prior to the date
hereof (by the delivery of an announcement to a Regulatory
Information Service), no member of the wider Aurelian Group having,
since 31 December 2011:
(i) issued, agreed to issue or proposed the issue of additional
shares or securities of any class, or securities convertible into,
or exchangeable for or rights, warrants or options to subscribe for
or acquire, any such shares, securities or convertible securities
(save as between Aurelian and wholly-owned subsidiaries of Aurelian
and save for options granted, and for any Aurelian Shares allotted
upon exercise of options granted under the Aurelian Share Schemes
before the date hereof), or redeemed, purchased or reduced any part
of its share capital;
(ii) sold or transferred or agreed to sell or transfer any Treasury Shares;
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution other than to Aurelian or a wholly-owned subsidiary of
Aurelian;
(iv) agreed, authorised, proposed or announced its intention to
propose any merger or demerger or acquisition or disposal of assets
or shares which are material in the context of the Aurelian Group
taken as a whole (other than in the ordinary course of trading) or
to any material change in its share or loan capital;
(v) issued, authorised or proposed the issue of any debentures
or incurred any indebtedness or contingent liability which is
material in the context of the Aurelian Group taken as a whole;
(vi) acquired or disposed of or transferred, mortgaged or
encumbered any asset or any right, title or interest in any asset
(other than in the ordinary course of trading) in a manner which is
material in the context of the Aurelian Group taken as a whole;
(vii) entered into or varied or announced its intention to enter
into or vary any contract, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which is of a
long-term or unusual nature or involves or could involve an
obligation of a nature or magnitude, and in either case which is
material in the context of the Aurelian Group taken as a whole;
(viii) entered into or proposed or announced its intention to
enter into any reconstruction, amalgamation, transaction or
arrangement (otherwise than in the ordinary course of business)
which is material in the context of the Aurelian Group taken as a
whole;
(ix) taken any action nor having had any steps taken or legal
proceedings started or threatened against it for its winding-up,
dissolution, striking-off or for it to enter into any arrangement
or composition for the benefit of its creditors, or for the
appointment of a receiver, administrator, trustee or similar
officer if it or any of its assets (or any analogous proceedings or
appointment in any overseas jurisdiction);
(x) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
(xi) entered into or varied or made any offer to enter into or
vary the terms of any service agreement or arrangement with any of
the directors of Aurelian;
(xii) waived, compromised or settled any claim which is material
in the context of the wider Aurelian Group taken as a whole; or
(xiii) entered into or made an offer (which remains open for
acceptance) to enter into any agreement, arrangement or commitment
or passed any resolution with respect to any of the transactions or
events referred to in this paragraph (e);
(f) since 31 December 2011, except as publicly announced by
Aurelian prior to the date hereof (by the delivery of an
announcement to a Regulatory Information Service):
(i) there having been no adverse change in the business, assets,
financial or trading position or profits or prospects of any member
of the wider Aurelian Group which in any such case is material in
the context of the Aurelian Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been instituted, announced or
threatened by or against or remaining outstanding against any
member of the wider Aurelian Group and no enquiry or investigation
by or complaint or reference to any Relevant Authority against or
in respect of any member of the wider Aurelian Group having been
threatened, announced or instituted or remaining outstanding which
in any such case could have a material affect on that member of the
Aurelian Group; and
(iii) no contingent or other liability having arisen or been
incurred which might reasonably be expected to adversely affect any
member of the Aurelian Group in a manner which is material in the
context of the wider Aurelian Group;
(g) San Leon not having discovered that, save as publicly
announced by Aurelian prior to the date hereof (by the delivery of
an announcement to a Regulatory Information Service):
(i) the financial, business or other information concerning the
wider Aurelian Group which has been disclosed at any time by or on
behalf of any member of the wider Aurelian Group whether publicly
(by the delivery of an announcement to a Regulatory Information
Service) or to San Leon or its professional advisers, either
contains a material misrepresentation of fact or omits to state a
fact necessary to make the information contained therein not
materially misleading; or
(ii) any member of the wider Aurelian Group is subject to any
liability, contingent or otherwise, which is not disclosed in the
annual report and accounts of Aurelian for the financial year ended
31 December 2011 or in the interim report of Aurelian for the six
months to 30 June 2012 and which is material in the context of the
Aurelian Group taken as a whole;
(iii) any past or present member of the wider Aurelian Group has
not complied with all applicable legislation or regulations of any
jurisdiction or any notice or requirement of any Relevant Authority
with regard to the storage, disposal, discharge, spillage, leak or
emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health which
non-compliance would be likely to give rise to any liability
(whether actual or contingent) on the part of any member of the
wider Aurelian Group;
(iv) there has been a disposal, spillage, emission, discharge or
leak of waste or hazardous substance or any substance likely to
impair the environment or harm human health on, or from, any land
or other asset now or previously owned, occupied or made use of by
any past or present member of the wider Aurelian Group, or in which
any such member may now or previously have had an interest, which
would be likely to give rise to any liability (whether actual or
contingent) on the part of any member of the wider Aurelian
Group;
(v) there is or is likely to be any obligation or liability
(whether actual or contingent) to make good, repair, reinstate or
clean up any property now or previously owned, occupied or made use
of by any past or present member of the wider Aurelian Group or in
which any such member may now or previously have had an interest
under any environmental legislation or regulation or notice,
circular or order of any Relevant Authority in any jurisdiction;
or
(vi) circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any
product or process of manufacture, or materials used therein, now
or previously manufactured, sold or carried out by any past or
present member of the wider Aurelian Group which claim or claims
would be likely to affect adversely any member of the wider
Aurelian Group.
Conditions 2(b) to (g) inclusive must be fulfilled, be
determined by San Leon to be or remain satisfied or (if capable of
waiver) be waived by San Leon by 11.59 p.m. on the date immediately
preceding the Court Hearing, failing which the Scheme shall
lapse.
To the extent permitted by law and subject to the requirements
of the Panel, San Leon reserves the right to waive all or any of
Conditions 2(b) to (g), in whole or in part. San Leon shall be
under no obligation to waive or treat as fulfilled any of
Conditions 2(b) to (g), by a date earlier than the Long-Stop Date
notwithstanding that the other Conditions of the Merger may at such
earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
Save with the consent of the Panel, the Scheme will not proceed
if either the European Commission either initiates proceedings
under Article 6(1)(c) of Council Regulation (EEC) 4064/89 (the
"Regulation") or makes a referral to a competent authority of the
United Kingdom under Article 9(1) of the Regulation and there is
then a reference to the Competition Commission or there is a
reference to the Competition Commission before the date of the
Court Meeting. In such event neither Aurelian, San Leon nor any
Aurelian Shareholder will be bound by any term of the Scheme.
Part 2 Certain further terms of the Merger
1. If San Leon is required by the Panel to make an offer for
Aurelian Shares under the provisions of Rule 9 of the Code, San
Leon may make such alterations to any of the above conditions as
are necessary to comply with the provisions of that Rule.
2. The Scheme and the Merger and any dispute or claim arising
out of, or in connection with, them (whether contractual or
non-contractual in nature) will be governed by English law and will
be subject to the jurisdiction of the Courts of England.
3. Save to the extent cancelled pursuant to the Scheme, the
Aurelian Shares will be acquired under the Merger fully paid and
free from all liens, charges and encumbrances, rights of
pre-emption and any other third party rights of any nature
whatsoever and together with all rights attaching thereto,
including the right to receive and retain all dividends and other
distributions declared, paid or made after the date hereof.
4. The availability of the New San Leon Shares to persons not
resident in the United Kingdom may be affected by the laws of the
relevant jurisdictions. Persons who are not resident in the United
Kingdom should inform themselves about and observe any applicable
requirements.
5. The New San Leon Shares to be issued under the Scheme will be
issued credited as fully paid and will rank in full for all
dividends and other distributions, if any, declared, made or paid
after the date hereof and otherwise shall rank pari passu with the
issued ordinary shares in San Leon.
6. Fractions of New San Leon Shares will not be allotted or
issued to Scheme Shareholders but the entitlements of Scheme
Shareholders will be rounded up or down (with 0.5 being rounded up)
to the nearest whole number of San Leon Shares.
7. San Leon reserves the right to switch from implementing the
Merger by means of a scheme of arrangement under Part 26 of the
Companies Act to a Takeover Offer, in accordance with paragraph 8
of Appendix 7 of the Code, with the consent of the Panel.
Appendix II
sources and bases
1. The value placed by the Merger on the issued share capital of
Aurelian is based upon there being 494,253,584 Aurelian Shares in
issue on 9 November 2012, being the Business Day prior to the date
of this announcement.
2. Unless otherwise stated, the market prices of the San Leon
Shares and the Aurelian Shares have been derived from the AIM
appendix to the Daily Official List and are the closing middle
market quotations on that date.
3. The approximate percentages that existing Aurelian
Shareholders and existing San Leon Shareholders are expected to
hold in the Enlarged Company have been calculated based on:
a. there being 494,253,584 Aurelian Shares in issue;
b. Aurelian Shareholders receiving, in aggregate, 642,529,659
New San Leon Shares based on the exchange ratio of 1.3 New San Leon
Shares for each Aurelian Share held;
c. the issued share capital of San Leon comprising of:
i. 1,144,004,250 San Leon Shares in issue;
ii. a further 10,462,299 San Leon Shares currently expected to
be issued in order to satisfy future requests by holders of certain
exchangeable shares which were issued in connection with San Leon's
recent acquisition of Realm Energy International Corporation and
which are exchangeable for San Leon Shares; and
iii. a further 85,425,654 San Leon Shares, currently expected to
be issued in connection with San Leon's recent acquisition of
certain Polish assets from Hutton Energy in June 2012; and
d. no new shares being issued in respect of existing options
over San Leon Shares or Aurelian Shares.
4. Unless otherwise stated, the resources information on
Aurelian is extracted (without material adjustment) from the
Competent Person's Report dated May 2012 (the "RPS CPR") available
on Aurelian's website. The P50 prospective resources numbers taken
from this report assume success in all intervals, segments and
prospects.
5. Unless otherwise stated, the resources information on San
Leon is based upon internal review and is estimated based upon the
inventory for both conventional and unconventional prospects. The
estimates assume 100% success and that all prospects will be
drilled. Estimates are based on only those prospects or leads that
San Leon is actively evaluating.
Appendix III
IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT
Aurelian Directors
All of the Aurelian Directors who have personal interests in
Aurelian Shares have given irrevocable undertakings to vote or
procure the vote in favour of the Merger (or, if implemented by way
of Takeover Offer, accept or procure the acceptance of such offer)
as follows:
Name Number of Aurelian % of issued share capital
Shares of Aurelian
------------------ ------------------- --------------------------
John Conlin 100,000 0.02
------------------ ------------------- --------------------------
Rowen Bainbridge 439,647 0.09
------------------ ------------------- --------------------------
John Matthews 25,000 0.01
------------------ ------------------- --------------------------
David Prior 2,931,345 0.59
------------------ ------------------- --------------------------
David Walker 121,603 0.02
------------------ ------------------- --------------------------
In addition the Aurelian Directors have agreed that the
undertaking to vote in favour of the Scheme at the Court Meeting
and the resolutions at the General Meeting will extend to Aurelian
Shares issued to them before the meetings on the exercise of
certain options.
The undertakings given by the Aurelian Directors only cease to
be binding if San Leon announces, with the consent of the Panel,
that it does not intend to proceed with the Merger and no new,
revised or replacement offer is announced by San Leon in accordance
with Rule 2.7 of the Code at the same time or in circumstances
where a condition to the Scheme is invoked or it fails to become
effective by the Long-Stop Date and no new, revised or replacement
offer or Scheme has been announced in its place within 5 Business
Days of such date.
San Leon has not received irrevocable undertakings from: (1)
Radwan Investments GmbH, a wholly owned subsidiary of Radwan
Privatstiftung, an Austrian private foundation whose class of
beneficiaries includes the infant children of Dariusz Mioduski (a
current Director of Aurelian), which holds an interest in 4,914,193
Aurelian Shares representing 0.99 per cent. of the total number of
Aurelian Shares in issue; or (2) Manoj Madnani, an alternate
Director of Aurelian, who holds an interest in 145,924 Aurelian
Shares representing 0.03 per cent. of the Aurelian Shares in
issue.
Institutional Irrevocable Undertakings
Certain Aurelian Shareholders have given irrevocable
undertakings to vote or procure the vote in favour of the Merger
(or, if implemented by way of Takeover Offer, accept or procure the
acceptance of such offer) as follows:
Name Number of Aurelian % of issued share
Shares capital of Aurelian
---------------------------- ------------------- ---------------------
Toscafund Asset Management
LLP 117,830,871 23.84
---------------------------- ------------------- ---------------------
Kulczyk Investments
S.A. 68,055,728 13.77
---------------------------- ------------------- ---------------------
Lord Sainsbury 21,980,359 4.45
---------------------------- ------------------- ---------------------
The irrevocable undertakings given by each of Toscafund Asset
Management LLP and Kulczyk Investments S.A. will cease to be
binding in circumstances where they have provided notice to San
Leon that they intend to accept a third party proposal to acquire
the entire issued share capital of Aurelian and such proposal:
(i) represents a substantially improved proposal when compared with the Merger; and
(ii) a period of ten days has elapsed from the announcement of
such third party offer without San Leon having revised the terms of
the Merger so that the value of the revised Merger exceeds the
value of the proposal by such third party.
The irrevocable undertaking given by Lord Sainsbury will cease
to be binding in circumstances where he has provided notice to San
Leon that he intends to accept a third party proposal to acquire
the entire issued share capital of Aurelian and such proposal:
(i) represents a substantially improved proposal when compared with the Merger;
(ii) is recommended by the board of directors of Aurelian; and
(iii) a period of ten days has elapsed from the announcement of
such third party offer without San Leon having revised the terms of
the Merger so that the value of the revised Merger exceeds the
value of the proposal by such third party.
Letter of Intent
A letter of intent has been received from Cheyne Capital
Management (UK) LLP in relation to the Aurelian Shares set out
below.
Name Number of Aurelian % of issued share capital
Shares of Aurelian
--------------------------- ------------------- --------------------------
Cheyne Capital Management
(UK) LLP 23,598,420 4.77
--------------------------- ------------------- --------------------------
The letter of intent states Cheyne Capital Management (UK) LLP's
current intention to use its reasonable endeavours to persuade the
owner of the 23,598,420 Aurelian Shares, in relation to which it
holds contracts for difference, to vote in favour of the
Merger.
Appendix IV
ESTIMATED RESOURCES
Estimated Contingent and Prospective Net
Resources Unrisked
---------------
mmboe
---------------- ----------------------- ---------------
Poland Conventional 180
Unconventional 6,700
Morocco Conventional 1,066
Unconventional 11,667
Albania Conventional 1,000
Ireland Conventional 1,333
Romania Conventional 7
Slovakia Conventional 6
---------------- ----------------------- ---------------
San Leon prospective resources are based upon internal review
and are estimated based upon the inventory for both conventional
and unconventional prospects. The estimates assume 100% success and
that all prospects will be drilled. Estimates are based on only
those prospects/leads that the company is actively evaluating.
Aurelian net unrisked resources are extracted from the RPS CPR
taking stochastic totals using P50 contingent and prospective
resources assuming at success in all intervals, segments and
prospects.
Appendix V
DEFINITIONS
The following definitions apply throughout this document unless
the context requires otherwise:
"AIM" the AIM market operated by the
London Stock Exchange
"AIM Rules" the rules applicable to AIM as
published by the London Stock
Exchange from time to time
"Aurelian" Aurelian Oil & Gas plc, a public
limited company incorporated
in England with registration
number 01685863 and having its
registered office at 4 Grosvenor
Place, London SW1X 7HJ, England
"Aurelian Directors" or the board of directors of Aurelian
"Aurelian Board" and "Aurelian Director" means
any one of them
"Aurelian Group" Aurelian and its subsidiary undertakings
"Aurelian Shareholders" holders of Aurelian Shares
"Aurelian Shares" ordinary shares of 5p each in
the capital of Aurelian
"Aurelian Share Schemes" the Aurelian Unapproved Company
Share Option Scheme and the Aurelian
Part Ownership arrangements
"Aurelian Employee Incentives the employee incentives agreement
Agreement" entered into between Aurelian
and San Leon on 11 November 2012
"Australia" the Commonwealth of Australia,
its states, territories and possessions
"Business Day" any day (not being a Saturday
or Sunday or public holiday)
on which banks are open for general
banking business in the City
of London
"Canada" Canada, its provinces and territories
and all areas subject to its
jurisdiction and any political
sub-division thereof
"Code" the City Code on Takeovers and
Mergers
"Companies Act" the Companies Act 2006
"Conditions" the conditions to the implementation
of the Scheme which are set out
in Part 1 of Appendix I to this
announcement and to be set out
in the Scheme Circular
"Court" Her Majesty's High Court of Justice
in England and Wales
"Court Hearing" the hearing of the Court to sanction
the Scheme
"Court Meeting" the meeting of Aurelian Shareholders
to be convened by an order of
the Court under the Companies
Act, notice of which will be
set out in the Scheme Circular,
to consider and if thought fit
approve the Scheme (with or without
amendment) including any adjournment
thereof
"Court Order" the order of the Court sanctioning
the Scheme under Part 26 of the
Companies Act and confirming
the Reduction of Capital and
confirming the Reduction of Capital
under the Companies Act
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001 (SI 2001/3755))
in respect of which Euroclear
UK & Ireland Ltd is the operator
"Daily Official List" the daily official list of the
London Stock Exchange
"Dealing Disclosure" an announcement pursuant to Rule
8 of the Code containing details
of dealings in interests in relevant
securities of a party to an offer
"Effective" the Scheme having become effective
pursuant to its terms
"Effective Date" the date on which the Merger
becomes effective
"Enlarged Company" San Leon following the Effective
Date
"Enlarged Group" the San Leon Group following
the Effective Date
"Fox-Davies Capital" Fox-Davies Capital Limited of
1 Tudor Street, London EC4Y 0AH
"FSA" means the Financial Services
Authority of the United Kingdom
"General Meeting" the general meeting of Aurelian
Shareholders to be convened in
connection with the Merger, notice
of which will be set out in the
Scheme Circular, to consider
and if thought fit approve various
matters in connection with the
implementation of the Scheme,
including any adjournment thereof
"Greenhill" Greenhill & Co. International
LLP of Lansdowne House, 57 Berkeley
Square, London W1J 6ER
"London Stock Exchange" London Stock Exchange plc
"Long-Stop Date" 30 June 2013 or such later date
(if any) as San Leon and Aurelian
may agree and (if required) the
Court and the Panel may allow
"Merger" the proposed acquisition by San
Leon of the entire issued and
to be issued share capital of
Aurelian to be implemented by
means of the Scheme
"Merger Ratio" the ratio of 1.3 New San Leon
Shares to every Aurelian Share
"Mutual Confidentiality the mutual confidentiality agreement
Agreement" summarised in paragraph 14 of
this announcement
"New San Leon Shares" the new San Leon Shares, to be
allotted in connection with the
Scheme
"Offer Period" the offer period (as defined
by the Code) relating to Aurelian
which commenced on 1 February
2012
"Opening Position Disclosure" an announcement pursuant to Rule
8 of the Code containing details
of interests or short positions
in, or rights to subscribe for,
any relevant securities of a
party to an offer
"Oriel" Oriel Securities Limited of 150
Cheapside, London EC2V 6ET
"Panel" or "Takeover Panel" the Panel on Takeovers and Mergers
"Reduction of Capital" the proposed reduction of Aurelian's
share capital pursuant to section
641 of the Companies Act provided
for in the Scheme by the cancellation
of the Scheme Shares
"Registrar of Companies" the Registrar of Companies in
England and Wales
"Regulatory Information a Regulatory Information Service
Service" that is approved by the Financial
Services Authority
"Relationship and Area of the agreement between Aurelian
Mutual Interest Agreement" and Kulczyk Investments S.A.
entered into on 22 November 2011
providing for co-operation in
the upstream sector in Poland,
including in relation to opportunities
in the oilfield services sector
"RPS CPR" the competent person's report
prepared for Aurelian by RPS
Energy Consultants Limited and
dated May 2012
"San Leon" San Leon Energy plc, a public
limited company incorporated
in the Republic of Ireland with
registration number 237825 and
having its registered office
at First Floor, Wilton Park House,
Wilton Place, Dublin 2, Republic
of Ireland
"San Leon Board" The board of directors of San
Leon
"San Leon Group" San Leon and its subsidiary undertakings
"San Leon Shares" ordinary shares of EUR0.05 each
in the capital of San Leon
"Scheme" or "Scheme of Arrangement" the Scheme of Arrangement proposed
to be made under Part 26 of the
Companies Act between Aurelian
and the holders of the Scheme
Shares to be set out in the Scheme
Circular, with or subject to
any modification, addition or
condition approved or imposed
by the Court
"Scheme Circular" the document to be sent to Aurelian
Shareholders setting out, amongst
other things, the Scheme and
notices convening the Court Meeting
and the General Meeting
"Scheme Record Time" 6.00pm on the Business Day immediately
preceding the date of the Court
Hearing
"Scheme Shareholders" holders of Scheme Shares and
a "Scheme Shareholder" shall
mean any one of those Scheme
Shareholders
"Scheme Shares" the Aurelian Shares:
(i) in issue at the date of the
Scheme Circular and which remain
in issue at the Scheme Record
Time;
(ii) (if any) issued after the
date of the Scheme Circular but
before the Voting Record Time
and which remain in issue at
the Scheme Record Time; and
(iii) (if any) issued at or after
the Voting Record Time but at
or before the Scheme Record Time
on terms that the holder thereof
shall be bound by the Scheme
or in respect of which the original
or any subsequent holders thereof
are, or have agreed in writing
to be, bound by the Scheme and,
in each case, which remain in
issue at the Scheme Record Time
excluding, in any case, any Aurelian
Shares held by or on behalf of
San Leon or the San Leon Group
at the Scheme Record Time
"Statement of Capital" the statement of capital approved
by the Court showing the information
required by the section 649 of
the Companies Act with respect
to Aurelian's share capital as
altered by the Reduction of Capital
"subsidiary" and "subsidiary have the meanings given to such
undertaking" terms in the Companies Act
"Takeover Offer" has the meaning given to it in
Part 28 of the Companies Act
"Treasury Shares" shares held as treasury shares
as defined in section 724(5)
of the Companies Act
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
"United States" or "US" the United States of America,
its territories and possessions,
any state of the United States
of America, the District of Columbia,
and all other areas subject to
its jurisdiction
"Voting Record Time" the time and date specified in
the Scheme Circular by reference
to which entitlement to vote
at the Court Meeting will be
determined, expected to be 6.00pm
on the day which is two days
before the date of the Court
Meeting or if the Court Meeting
is adjourned, 6.00pm on the day
which is two days before such
adjourned meeting
Appendix V
GLOSSARY OF ACRONYMS AND TECHNICAL TERMS
The following acronyms and terms are used in this announcement
and an explanation of their meaning is set out below.
Acronyms
"MFHW" Multiple fracture horizontal
wells
"PGNiG" PGNiG S.A. (Polish Oil & Gas
Company)
Other technical terms
"2D seismic" two dimensional seismic data
covering length and depth of
a given geographic surface
"3D Seismic" three dimensional seismic data
covering length, breadth and
depth of given geographic surface
"contingent resources" those quantities of hydrocarbons
which are estimated, on a given
date, to be potentially recoverable
from known accumulations, but
which are not currently considered
to be commercially recoverable.
Contingent resources may be
of a significant size, but still
have constraints to development.
These constraints, preventing
the booking of reserves, may
relate to lack of gas marketing
arrangements or to technical,
environmental or political barriers
"farm-in" the acquisition by a party of
one or more interests in a production
licence, from one or more existing
licencees
"farm-out" the sale of an interest or interest
in a production licence by an
existing licencee to a third
party
"hydrocarbon" organic compounds comprising
carbon and hydrogen, including
oil, condensate, gas and gas
condensate
"mmbbls" million barrels of oil
"mmboe" million barrels of oil equivalent
"play" an area in which hydrocarbon
accumulations or prospects of
a given type occur
"prospect" targeted area in which hydrocarbons
are predicted to exist in economic
volumes
"prospective resources" those quantities of hydrocarbons
which are estimated, on a given
date, to be potentially recoverable
from undiscovered accumulations
"seismic" information derived from a geophysical
method which involves generating
shock waves by the release of
energy at or near the surface
and recording the nature of
waves returning from the various
subsurface rock interfaces
This information is provided by RNS
The company news service from the London Stock Exchange
END
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