(Alliance News) - Petrel Resources PLC on Monday said it has cancelled 64.0 million shares issued to Netoil - a part of the Tamraz Group - due to a failure to pay the subscription amount.
The oil & gas exploration company said the injunction against the trading of the remaining 32 million shares issued to Tamraz executives remains in place until all matters are resolved. It added that it has been unable to recover around 5.3 million shares sold in breach of the lock-in agreement.
In January, Petrel said its application to the High Court in Dublin for a broader interlocutory injunction against trading in its locked-in shares was successful and was not contested. This followed a previous successful application to the High Court in Dublin for an interim injunction over locked-in shares.
The company previously said it hadn't received payment for the second tranche of shares issued to the Tamraz investor group.
The Tamraz group consists of private equity investors, friends and business acquaintances of Non-Executive Director Michel Fayad, including Roger Tamraz and Said Mehraik. Back in April, Petrel said it was reviewing Fayad's position on the board.
In April, Petrel said it wasn't able to proceed in finalising the second 64.0 million tranche of shares as a result of "the changed circumstances, taking into account the state of markets generally in the light of Covid-19, as well as oil price volatility".
"Despite lengthy and intensive discussions, the Tamraz group would not or could not pay for the 64.0 million new Petrel shares despite the subscription price of EUR0.0125 being substantially below the current share price. Equally, the Tamraz group was unwilling or unable to reacquire or replace the 5.25 million shares pledged and sold in breach of the lock-in agreement. Consequently, the High Court injunction continues to prohibit any disposal of the remaining 32 million shares which were pledged as part of the lock-in agreement," said Petrel Chair John Teeling.
Following the cancellation of the shares, Petrel's share capital comprises 149.3 million shares.
Separately, Petrel said it is in talks with the Ministry of Oil in Baghdad, to take advantage of the opportunities which have arisen due to the "turbulent oil price and political events of recent months".
Petrel shares were trading 1.9% higher at 3.44 pence each on Monday morning in London, and at EUR0.031 each in Frankfurt, down 25%.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Petrel Resources (PET)