TIDMUOG
RNS Number : 1232W
United Oil & Gas PLC
09 December 2019
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA,
JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD VIOLATE THE RELEVANT SECURITIES LAWS OF SUCH
JURISDICTION.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN UNITED OIL & GAS PLC OR ANY
OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE
FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON,
IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF UNITED OIL
& GAS PLC.
IN ADDITION, MARKET SOUNDINGS, AS DEFINED IN MAR, WERE TAKEN IN
RESPECT OF THE PROPOSED PLACING AND SUBSCRIPTION WITH THE RESULT
THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION, AS
PERMITTED BY MAR. THAT INSIDE INFORMATION IS SET OUT IN THIS
ANNOUNCEMENT AND HAS BEEN DISCLOSED AS SOON AS POSSIBLE IN
ACCORDANCE WITH PARAGRAPH 7 OF ARTICLE 17 OF MAR. THEREFORE, THOSE
PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE
NO LONGER IN POSSESSION OF INSIDE INFORMATION RELATING TO THE
COMPANY AND ITS SECURITIES.
United Oil & Gas PLC / Index: AIM / Epic: UOG / Sector: Oil
& Gas
9 December 2019
United Oil & Gas PLC ('United' or 'UOG' or 'the
Company')
Publication of Admission Document, Restoration of Trading,
Conditional Fundraise, Update on Rockhopper Acquisition and Notice
of General Meeting
Highlights
-- Publication of Admission Document relating to proposed
acquisition by United of Rockhopper Egypt Pty Ltd ("Rockhopper
Egypt") for consideration of US$16 million with an effective date
of 1(st) January 2019
-- Rockhopper Egypt holds a 22% non-operated interest in the
producing Abu Sennan concession; which on completion will
deliver:
o c. 1,100 boepd net low-cost production with 2.66 million boe
net working interest 2P Reserves at mid-2019 to United plus infill
and exploration upside
o exposure to ongoing low risk development and appraisal well
programme focused on scaling up production and adding reserves -
gross production levels have increased to c. 5,000 boepd from 4,000
boepd at the start of 2019
-- Temporary suspension of trading in the Company's Ordinary
Shares expected to be lifted at 7.30 a.m. today, 9 December
2019
-- Conditional issue of equity to raise US$6.25 million
(approximately GBP4.8 million) gross by the issue of 159,036,167
new Ordinary Shares in United at a price of 3 pence per Ordinary
Share as part of funding package for the acquisition which also
includes:
o a prepayment financing structure of up to US$ 8million
provided by the BP Group
o the issue of 114,503,817 million new ordinary shares (US$4.5
million) to Rockhopper Exploration PLC, which are subject to
certain lock-up and orderly market disposal provisions for up to a
period of 12 months from completion.
-- Admission Document posted on Friday, 6(th) December 2019 to
Shareholders convening a General Meeting to be held at 10.00 a.m.
(UK time) on 23 December 2019 at 200 Strand, London WC2R 1DJ to
approve Rockhopper Acquisition
United Oil & Gas PLC (AIM: "UOG"), the AIM traded oil and
gas exploration and development company, is pleased to announce the
publication of its circular comprising an admission document (the
"Admission Document") relating to the proposed acquisition of
Rockhopper Egypt Pty Ltd ("Rockhopper Egypt") (the "Rockhopper
Acquisition") and to the re-admission of the Company's ordinary
shares ("Ordinary Shares") to trading on the AIM market
("Admission"). The Admission Document can be viewed at
www.uogplc.com. Following publication of the Admission Document,
the temporary suspension of trading in the Company's Ordinary
Shares is expected to be lifted at 7.30 a.m. today, 9 December
2019.
On 23 July 2019, the Company announced that it had entered into
a binding conditional sale and purchase agreement with Rockhopper
Exploration plc ("Rockhopper PLC") to acquire the entire issued
share capital of Rockhopper Egypt, which owns a 22 per cent.
non-operated working interest in the Abu Sennan Concession and
associated development leases in Egypt, with an effective date of 1
January 2019 and trading in the Ordinary Shares was suspended on
that day. The consideration for the Rockhopper Acquisition is US$16
million (approximately GBP12.2 million) in accordance with the
terms of the Rockhopper Acquisition Agreement. A deposit of US$0.3
million has been paid on signing and the balance of US$15.7 million
is to be satisfied in cash and Consideration Shares at Completion
conditional on, inter alia, Shareholder approval at the General
Meeting and upon EGPC and the Minister of Petroleum and Mineral
Resources of Egypt providing the deed of assignment to the
Rockhopper Acquisition and Admission.
As part satisfaction of the acquisition consideration, United is
pleased to announce that it has conditionally raised US$6.25
million (approximately GBP4.8 million) gross by the issue of a
total of 159,036,167 new Ordinary Shares in the capital of the
Company at a price of 3 pence per Ordinary Share. 150,616,669 new
Ordinary Shares have been conditionally placed by the Company's
joint brokers Optiva Securities Limited ("Optiva") and Cenkos
Securities Plc ("Cenkos"), on behalf of the Company with
institutional and other investors (the "Placing"). 8,419,498 new
Ordinary Shares (the "Subscription Shares") have been conditionally
subscribed for by certain existing shareholders of the Company and
two Directors as detailed below (the "Subscription"). 114,503,817
million new ordinary shares will be issued to Rockhopper PLC as
part payment for the acquisition.
Brian Larkin, CEO, said: "The Rockhopper Egypt Acquisition is a
transformational development step for our Company. Upon completion
of this deal, United will have material production which will
generate significant cash flow for reinvestment into the business.
In addition, we look forward to announcing the completion of our
Crown divestment before the year end.
We also gain exposure to an exciting fully funded development
programme in Egypt which includes four wells in 2020. Along with
activity across our wider portfolio, including the potential for
future production from Italy and moving our Jamaican asset forward,
we expect 2020 will not be short of significant news flow across
our asset base. We are now on track to transform United into a
highly cash generative and asset backed business and I would like
to thank shareholders for their support so far, especially with
reaching this important milestone in United's journey."
Information on Rockhopper Egypt
Rockhopper Egypt holds a 22 percent. working interest in the Abu
Sennan Concession which lies in the Western Desert in Egypt. Kuwait
Energy, now owned by United Energy Group Ltd, holds 25 percent.
through its subsidiary company Kuwait Energy Egypt and is the
operator. The other partners in the Contractor Group are Global
Connect Ltd, holding a 25 per cent. interest, and Dover Investments
Ltd, holding a 28 per cent. interest. Kuwait Energy carries all of
Dover's costs related to the concession, and in return is entitled
to receive Dover's share of the cost oil plus 7.5 percent. of
Dover's share of the profit oil attributed to the Contractor
Group.
The Abu Sennan concession is governed by a Production Sharing
Contract (PSC). Seven development leases have been awarded covering
the eight fields that have been discovered and put into production.
An exploration licence covers the rest of the concession area.
The oil and gas Reserves attributable to Abu Sennan are shown
below, both as gross (100 percent.) field volumes and net to the 22
percent. interest to be acquired by UOG.
An ongoing infill drilling campaign has had considerable success
to date as gross production levels have increased from 4,000 boepd
at the start of 2019 to c. 5,000 boepd at present. Recent drilling
results from the Bahariya reservoir of the Al Jahraa Field
highlight the infill potential across the seven production
concessions.
Funding of the Rockhopper Acquisition
The Rockhopper Acquisition is funded by the issue of
Consideration Shares, the BP facility and from the net proceeds of
the Placing and Subscription.
Consideration Shares
Rockhopper PLC has agreed to take US$4.5 million as part payment
of the Consideration for the Rockhopper Acquisition. Accordingly,
on Completion the Company will issue to Rockhopper Exploration PLC
114,503,817 Consideration Shares at 3 pence representing 18.5% of
the Company's Enlarged Ordinary Share Capital on Admission.
Pursuant to the terms of the Rockhopper Acquisition Agreement
and subject to the number of Consideration Shares held by or on
behalf of Rockhopper PLC being 3 percent. or more of the entire
issued ordinary share capital of the Company on and following
Admission, Rockhopper PLC has agreed with the Company that it will
only dispose of any interest in the Consideration Shares for a
period of 12 months from Admission in accordance with an orderly
market arrangement commencing three months from Admission and
through the Company's broker, unless such disposals are with the
prior written consent of the Buyer.
For as long as Rockhopper holds 10 per cent. or more of the
entire issued share capital of the Company it is entitled to
appoint a director to the Board subject to the regulatory approval
of the Company's nominated adviser.
BP facility
BP has agreed to provide the Company with a pre-payment
financing structure of up to US$8 million, transacted under a 2002
ISDA Master Agreement. Pursuant to the terms of the BP facility,
the Company will make repayments over 30 calendar months based upon
dated Brent market prices for an agreed volume, capped at an agreed
level. The financing structure will generate an upfront payment to
the Company that will be used to fund part of the Rockhopper
Acquisition and in addition, will hedge a portion of the Company's
production during the term of the pre-payment while allowing the
Company to benefit from market prices above the capped price for
the pre-payment volume. The Company intends to draw down the full
amount under the BP facility (US$8 million), on or prior to
Completion, to fund the Rockhopper Acquisition.
Placing
The Company has conditionally raised approximately GBP4.5
million (US$5.9 million), before expenses (GBP4.3 million
(approximately (US$5.6 million) net of Placing expenses) through
the Placing of 150,616,669 Placing Shares at 3 pence per Placing
Share from certain existing and new investors.
Pursuant to the Placing Agreement entered into by the Company,
Beaumont Cornish, the Directors, Cenkos and Optiva on 6 December
2019 the Placing of the Placing Shares is conditional, inter alia,
on:
-- the passing of the Resolutions to be proposed at the General Meeting;
-- compliance by the Company in all material respects with its
obligations under the Placing Agreement;
-- the Rockhopper Acquisition Agreement becoming unconditional save for Admission; and
-- Admission having occurred by no later than 8.00 a.m. on 6
January 2020 or such later time as agreed between Beaumont Cornish,
Cenkos and Optiva not being later than 4.00 p.m. on 31 January
2020.
Under the Placing Agreement, which may be terminated by Beaumont
Cornish, Cenkos and Optiva in certain circumstances (including
force majeure) prior to Admission, the Company and the Directors
have given certain warranties and indemnities to Beaumont Cornish,
Cenkos, and Optiva concerning, inter alia, the accuracy of
information contained in the Document.
Subscription
Certain existing shareholders of the Company and two Directors,
Graham Martin and David Quirke have agreed to subscribe for an
aggregate amount of 8,419,498 Subscription Shares at the
Subscription Price which is equal to the Placing Price.
Graham Martin and David Quirke have each subscribed for
2,000,000 Subscription Shares and 833,333 Subscription Shares
respectively at the Subscription Price on the same terms as the
other Subscribers as part of the Subscription.
The Subscription is conditional, inter alia, on:
-- the passing of the Resolutions to be proposed at the General Meeting;
-- the Rockhopper Acquisition Agreement becoming unconditional save for Admission; and
-- Admission having occurred by no later than the long stop date
as defined in the Rockhopper Acquisition Agreement.
The issue of the Placing Shares, the Subscription Shares and the
Consideration Shares is conditional, inter alia, on the passing of
the Resolutions at the General Meeting, the Rockhopper Acquisition
Agreement becoming unconditional and Admission.
The Placing Shares, the Subscription Shares and the
Consideration Shares will rank pari passu in all respects with
Existing Ordinary Shares including all rights to dividends and
other distributions declared, made or paid following Admission and
will be issued as fully paid.
The Company's Enlarged Ordinary Share Capital will comprise
619,153,969 Ordinary Shares on Admission.
Application will be made to the London Stock Exchange for the
Enlarged Ordinary Share Capital of the Company to be admitted to
trading on AIM.
Admission of the Enlarged Ordinary Share Capital to trading on
AIM, which is subject to the passing of the Resolutions at the
General Meeting, the Rockhopper Acquisition Agreement becoming
unconditional and Admission, is expected to take place on or about
6 January 2020 and a further announcement confirming the Admission
date will be made in due course.
Use of Proceeds
The net proceeds of the Placing and the Subscription together
with the drawdown under the BP facility, totalling approximately
US$13.7 million (approximately GBP10.5 million), will be used to
fund the cash element of the Consideration for the Rockhopper
Acquisition, costs of the Rockhopper Acquisition, Admission and
working capital requirements of the Enlarged Group, as follows:
GBP million US$ million
Consideration for Rockhopper Acquisition
(cash element) 8.8 11.5
Costs of the Rockhopper Acquisition and
Admission 0.6 0.8
General working capital 1.1 1.4
Total 10.5 13.7
Table 2: Summary of Reserves
as at 30(th) June 2019
(a) Oil
Status Gross Field Net Economic Entitlement
(MMBbl) (MMBbl)
Proved Proved Proved+ Proved Proved Proved+
+ Probable Probable+ + Probable Probable+
Possible Possible
------- ------------ ----------- ------- ------------ -----------
Developed 3.09 6.56 8.80 0.30 0.63 0.85
------- ------------ ----------- ------- ------------ -----------
Undeveloped 0.52 3.99 7.13 0.05 0.38 0.62
------- ------------ ----------- ------- ------------ -----------
Total 3.61 10.56 15.93 0.34 1.00 1.47
------- ------------ ----------- ------- ------------ -----------
(b) Gas
Status Gross Field Net Economic Entitlement
(MMBbl) (MMBbl)
Proved Proved Proved+ Proved Proved Proved+
+ Probable Probable+ + Probable Probable+
Possible Possible
------- ------------ ----------- ------- ------------ -----------
Developed 3.6 7.1 12.2 0.3 0.7 1.2
------- ------------ ----------- ------- ------------ -----------
Undeveloped 0.0 0.7 2.3 0.0 0.1 0.2
------- ------------ ----------- ------- ------------ -----------
Total 3.6 7.8 14.5 0.3 0.7 1.4
------- ------------ ----------- ------- ------------ -----------
Notes:
1. Gross Field Reserves are 100 percent. of the volumes
estimated to be commercially recoverable from the asset under the
intended development plan.
2. Net Reserves are the net economic entitlement attributable to
the interest to be acquired by UOG under the terms of the PSC that
governs this asset.
3. For all of the Reserves volumes, the Operator is the East Abu
Sennan Petroleum Company.
4. Totals may not exactly equal the sum of the individual entries due to rounding.
(Source: GCA CPR Executive Summary, Reserves Summary)
Rockhopper Egypt reported turnover and gross profit for the
audited year ended 31 December 2018 of US$6,123,788 and
US$2,393,509 and for the unaudited six month period to 30 June
2019, US$ 3,184,310 and US$1,203,073 respectively.
The unaudited pro forma net assets of UOG prepared to illustrate
the effect of the Acquisition together with the Placing and
Subscription, as if they had taken place as at 31 December 2018,
are US$20,782,765.
Notice of General Meeting
The Admission Document convening a General Meeting of the
Company to be held at 10.00 a.m. (UK time) on 23 December 2019 at
200 Strand, London WC2R 1DJ was posted to Shareholders on Friday,
6(th) December 2019. At that meeting, a resolution will be proposed
in order to seek shareholder approval for the Rockhopper
Acquisition as required by the AIM Rules. In addition, resolutions
will be proposed at the General Meeting to grant powers of
allotment and disapplication of statutory pre-emption rights in
respect of, inter alia, the Placing Shares, Subscription Shares and
Consideration Shares.
Defined terms used in this announcement have the meanings
ascribed to them in the Admission Document.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
For further information please visit the Company's website at
www.uogplc.com or contact:
United Oil & Gas Plc (Company)
Brian Larkin, CEO brian.larkin@uogplc.com
Beaumont Cornish Limited (Nominated
Adviser)
Roland Cornish and Felicity Geidt +44 (0) 20 7628 3396
Optiva Securities Limited (Joint
Broker)
Christian Dennis +44 (0) 20 3137 1902
Cenkos Securities Plc (Joint Broker)
Joe Nally (Corporate Broking) +44 (0) 20 7397 8900
Derrick Lee and Pete Lynch +44 (0) 131 220 6939
Murray (PR Advisor) +353 (0) 87 6909735
Joe Heron jheron@murrayconsultants.ie
St Brides Partners (Financial PR/IR)
Frank Buhagiar and Priit Piip +44 (0) 207 236 1177
Appendix I
Extracts from the Admission Document
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Resumption of trading in the Existing on or around 9 December
Ordinary Shares on AIM 2019
Latest time for return of the Form 10.00 a.m. on 19 December
of Proxy 2019
General Meeting 10.00 a.m. on 23 December
2019
Completion of the Rockhopper Acquisition on or about 6 January
2020
Admission to trading effective and on or about 6 January
Commencement of dealings in the Enlarged 2020
Ordinary Share Capital on AIM
Note: All references to time in the Document are to London time
unless otherwise stated and each of the times and dates are
indicative only and may be subject to change (based on the
Company's current expectations). If any of the above times or dates
should change, the revised times and/or dates will be notified to
Shareholders by an announcement on a Regulatory Information
Service.
PLACING, SUBSCRIPTION AND ROCKHOPPER ACQUISITION STATISTICS
Number of Existing Ordinary Shares
as at the date of the Document 345,613,985
Number of Warrants in issue as at
the date of the Document 82,212,206
Number of Options in issue as at the
date of the Document 11,117,648
Placing Price per Ordinary Share 3 pence
Number of Placing Shares to be issued
pursuant to the Placing 150,616,669
Subscription Price per Ordinary Share 3 pence
Number of Subscription Shares to be
issued pursuant to the Subscription 8,419,498
Number of Consideration Shares 114,503,817
Enlarged Ordinary Share Capital on
Admission 619,153,969
Percentage of Enlarged Ordinary Share 25.7 percent.
Capital on Admission represented by
the Placing Shares and the Subscription
Shares
Consideration Shares as a percentage 18.5 percent.
of the Enlarged Ordinary Share Capital
Market capitalisation of the Company GBP18.6 million
at the Placing Price on Admission
Gross proceeds of the Placing and GBP4.8 million
the Subscription
Proceeds of the Placing (net of expenses) GBP4.3 million
ISIN GB00BYX0MB92
SEDOL BYX0MB9
LEI 213800WZWERBFYBQ9J17Q9J17
TIDM UOG
Note: Figures are calculated based on USD:GBP exchange rate of
GBP1:$1.31 as at 4 December 2019
Forward looking statements Advisory
Certain statements in this announcement are or may constitute
forward looking statements, including statements about current
beliefs and expectations of the Directors. In particular, the words
"expect", "anticipate", "estimate", "may", "should", "plan",
"intend", "will", "would", "could", "target", "believe" and similar
expressions (or in each case their negative and other variations or
comparable terminology) can be used to identify forward looking
statements. Such forward looking statements are based on the
Board's expectations of external conditions and events, current
business strategy, plans and the other objectives of management for
future operations, and estimates and projections of the Group's
financial performance. Though the Board believes these expectations
to be reasonable at the date of the Document they may prove to be
erroneous. Forward looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, achievements or performance of the Group, or the industry
in which the Group operates, to be materially different from any
future results, achievements or performance expressed or implied by
such forward looking statements. These risks and factors include,
but are not limited to, risks relating to the Company's ability to
execute its exploration and development programme, drilling and
operating risks, dependence on key personnel, compliance with
environmental regulations and competition. Any forward looking
statement in this announcement speaks only as of the date it is
made. Forward looking statements and other information contained
herein concerning the oil and natural gas industry in the countries
in which the Company operates and the Company's general
expectations concerning this industry are based on estimates
prepared by the Company's management using data from publicly
available industry sources as well as from resource reports, market
research and industry analysis and on assumptions based on data and
knowledge of this industry which the Company believes to be
reasonable. However, this data is inherently imprecise, although
generally indicative of relative market positions, market shares
and performance characteristics. While the Company is not aware of
any material misstatements regarding any industry data presented
herein, the oil and natural gas industry involves numerous risks
and uncertainties and is subject to change based on various
factors. Actual results, performance or achievement could differ
materially from that expressed in or implied by any forward looking
statements or information in this announcement, and accordingly,
investors should not place undue reliance on any such forward
looking statements or information. Further, any forward looking
statement or information speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to
update any forward looking statements or information to reflect
information, events, results, circumstances or otherwise after the
date on which such statement is made or to reflect the occurrence
of unanticipated events, except as required by law including
securities laws and/or the AIM Rules for Companies. All forward
looking statements and information contained in this announcement
and other documents of the Company are qualified by such cautionary
statements. New factors emerge from time to time, and it is not
possible for the Company's management to predict all of such
factors and to assess in advance the impact of each such factor on
the Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward looking
statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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