ADV.L Regulatory News (ADV)

5 June 2015

CEB Resources plc

("CEB" or "the Company")

Issue of Equity, Assignment Agreement, Appointment of Director, Agreement with Northcote Energy Ltd and Lifting of Suspension

CEB Resources plc, the AIM listed resource investment company, is pleased to announce that it has raised £1.5 million by way of a placing at 0.4p per share. In addition, it has entered into an agreement with Corsair Petroleum (Singapore) Pte Ltd ("Corsair") whereby Corsair has agreed to assign a participating interest in a vehicle which intends to consider and if applicable, apply for two oil and gas concessions in Indonesia. Additionally, Mr David Whitby, one of the partners in Corsair, has been appointed to the board of the Company (the "Board") as Chief Executive Officer.

The Placing

The Company has completed a placing of 375,000,000 ordinary shares in the Company (the "Placing Shares") at a price of 0.4p per share, conducted by Cornhill Capital. The gross proceeds of the Placing are £1.5 million, which will be used to provide additional working capital, to implement the Company's investing policy and, if the application is made and is successful, to acquire the oil and gas concessions.

Assignment Agreement

Under the agreement with Corsair ("Assignment Agreement"), Corsair has agreed to assign to CEB an interest in a contract it has with PT Wangsa Energi Prakarsa ("Wangsa") to consider and if applicable, apply for two oil and gas concessions in Indonesia. Under the agreement, if either or both applications are made and successful, CEB has agreed to fund 100% of the agreed due diligence, acquisition and development costs in return for 90% of all distributions to participating interests from the projects until the total distributions paid to it and Corsair are equal to the Investment and the Company has received a 9% internal rate of return on the Investment. Thereafter, CEB would be entitled to a 70% participating interest in the assets. Corsair is entitled to 10% of all distributions until full payout when it would revert to a 5% participating interest. 

Pursuant to the Assignment Agreement, CEB has agreed to issue 31,250,000 ordinary shares in CEB ("Consideration Shares") to Corsair and to grant it options over 34,344,865 ordinary shares in CEB, exercisable at 0.4p per share until the third anniversary of the Assignment Agreement ("Options"). In the event that Corsair is successful in the acquisition of at least one concession, it will issue up to 93,750,000 ordinary shares in CEB and up to 103,034,596 Options in three equal instalments on the following events occurring:

· the acquisition of one concession;

· the acquisition of a second concession;

· gross production from projects in which CEB has an economic interest exceeding 400 boepd.

Corsair is a private company incorporated in Singapore and it is beneficially owned by Simon Gorringe, Chris Newport, Ross Warner and David Whitby in equal proportions. It has experience of evaluating, acquiring and developing oil and gas assets in Indonesia where it has a small and experienced team of oil and gas professionals. 

Should the Company be successful in its application for a concession, the transaction will represent a fundamental change in its business and thus be treated as a reverse under Rule 14 of the AIM Rules. It will therefore publish an admission document at the time and seek shareholder consent to the change in business from an investing company to an oil and gas company.

There is no guarantee that any application will be made for a concession and, if made, that it will be successful. As noted above, the acquisition of a concession would be treated as a reverse subject to shareholder approval and it is likely that, in order to develop a concession, the Company will need to raise further funds at that time, which may dilute the interests of shareholders. 

Following completion of the Placing, the company will have net assets of approximately US$2.7 million (£1.8 million), comprising cash balances of US$2.5 million (£1.7 million) and a 20% interest in the Peelwood project, which is a copper-nickel play in NSW, Australia, which has a carrying value of US$180,000 (£117,000). The Company continues to evaluate the level of its investment in the Peelwood project in light of current market conditions.

Appointment of David Whitby

David Whitby is a highly experienced oil and gas professional with a proven track record of success, particularly in Indonesia. He has an in-depth understanding of the region's corporate practices having had leadership roles in major onshore gas developments in Indonesia which now produce a cumulative 1.5 Bcf/d to domestic and foreign customers. 

As well as Indonesia, Mr Whitby has experience in developing early stage oil and gas businesses into significant companies including as CEO of Nido Petroleum Ltd.

Mr Whitby began his career with Husky Oil in Canada as a field engineer in their Lloydminster heavy oil operations progressing to the Reservoir Engineering manager in head office in Calgary. In 1990, he joined Asamara (Gulf Canada) in Indonesia to develop its gas discovery in South Sumatra. In 1994, Dave re-joined Husky in Canada as the VP of Heavy Oil and it returned to profitability. Upon successful completion of that project, Mr Whitby returned to Indonesia as VP - Gas Development to lead a project delivering gas to Singapore, West Java, Batam and to other industrial consumers.

Agreement with Northcote Energy Ltd ("NCT")

CEB and NCT have agreed that NCT will be entitled to participate in any of CEB's investments in Indonesia for a term of 5 years from the date of the Agreement. NCT's participation would be up to 12.5% of CEB's participation in return for which NCT would pay its proportional share of all costs.

NCT has subscribed for 50,000,000 ordinary shares in CEB pursuant to the Placing, as a result of which its holding will be 6.6% on completion of the Placing and the Assignment Agreement.

Application will be made to the London Stock Exchange for the admission of the Placing Shares and the Consideration Shares (together, "New Ordinary Shares") to trading on AIM ("Admission") and it is expected that Admission will occur and that trading in the New Ordinary Shares will commence at 8.00 am on 11 June 2015. The New Ordinary Shares will rank pari passu in all respects with the Company's existing issued ordinary shares.

Following Admission of the New Ordinary Shares the Company will have an enlarged issued share capital of 718,147,303 ordinary shares.

Lifting of suspension of trading in the Company's ordinary shares

The suspension of trading in the Company's ordinary shares will be lifted with effect from 07.30am on 11 June 2015, the date of admission of the New Ordinary Shares.

Fundamental changes of business

The Company announced on 1 April 2015 that it had sold its remaining shares in Balamara Resources Limited. It has come to the Company's attention that on disposing of this investment that under the AIM Rules it is deemed to have disposed of substantially all of its investments. The Company therefore has 12 months from the date at which it disposed of this investment to implement its investing policy, which is available to view on the Company's website.

Disclosures under Schedule 2 of the AIM Rules:

The following information is required to be disclosed under Schedule 2, paragraph (g) of the AIM Rules.

Mr David Robert Whitby, aged 59, holds or has held the following directorships and/or partnerships in the previous five years:

Through his beneficial interest in Corsair Mr Whitby will own 7,812,500 ordinary shares in CEB (1.09% of the enlarged issued share capital).

There are no other matters which are required to be announced with regard to the appointment of Mr Whitby under paragraph (g) of Schedule 2 of the AIM Rules.

Commenting on the announcement Chairman of CEB, Cameron Pearce, said, "We are delighted with the support we have received from existing and new investors in the Placing, which will greatly increase our financial reserves. If Corsair is successful in its application for one or more concessions, we would have the opportunity to participate in a highly prospective oil and gas region in Indonesia. I am also delighted to welcome David to the team - he has an exceptional pedigree in Indonesia." 

For further information:

CEB Resources plc

Cameron Pearce / Jeremy King 01624 681 1250

Sanlam Securities UK Limited (Nomad and Joint Broker)

Lindsay Mair / Andrew Wagstaff 020 7628 2200

Peterhouse Corporate Finance Limited (Joint Broker)

Lucy Williams / Charles Goodfellow 020 7469 0930

Cornhill Capital Limited (Joint Broker)

Nick Bealer 020 7710 9611