30 Mar 2010 07:00
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, JAPAN, CANADA OR AUSTRALIA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION.
Altona Energy Plc / Index: AIM / Epic: ANR / Sector: Exploration & Production
30 March 2010
Altona Energy Plc ('Altona' or 'the Company')
Placing of 33.33m new Ordinary Shares at 9 pence each to raise £3.0 million
Altona Energy Plc, the AIM listed Australian based energy company, is pleased to announce that it has placed 33,333,334 new ordinary shares ('Ordinary Shares') of 0.1 pence each ('the Placing Shares') at 9 pence per share ('the Placing Price') to raise gross proceeds of approximately £3.0 million ('the Placing').
Placing Summary
·; Placing of 33,333,334 Ordinary Shares at a price of 9 pence per Placing Share to raise gross proceeds of £3.0 million
·; Oversubscribed Placing to UK institutions
·; Net proceeds of the Placing to fund the Company for over 18 months, with Altona's joint venture partner, CNOOC-NEI, a subsidiary of China National Offshore Oil Corporation, providing all funding for the completion of the BFS for the Arckaringa Project
·; The next 12 to 15 months will see the undertaking of key work programmes of the bankable feasibility study ('BFS'), including mine design, planning, groundwater engineering, environmental and numerous technical studies, all of which will underpin the follow-up engineering of the coal conversion plant and other projects
·; Placing Price represents a discount of 55 per cent. to the closing middle market price of 20 pence per Ordinary Share on 29 March 2010 and a premium of 8.4 per cent. to the 10 day volume weighted average price prior to 23 March 2010 and the announcement of the BG Group agreement with CNOOC to supply natural gas to China, being 8.3 pence per Ordinary Share
·; Placing Shares will represent approximately 8.1 per cent. of the Company's enlarged issued ordinary share capital immediately following Admission
The Company has also released its results for the six month period ended 31 December 2009, as detailed in a separate announcement today.
Altona Chairman Christopher Lambert said, "The fundraising is yet another considerable step towards commercialising our estimated 7.8 billion tonne coal resource. I believe the overwhelming support shown to the company over the past week is the result of a culmination of many years of solid work by Altona, which has transformed the Company's internationally significant energy asset through the agreement of the terms of a joint venture with CNOOC-NEI. We believe that with the working capital secured, and CNOOC-NEI's funding and operation of the BFS, Altona has de-risked the project both financially and technically as much as is possible at this stage of our development and as a result the Company is now well positioned for this next key phase towards the development of the Arckaringa Project.
"The past week has seen unprecedented support for Altona which has clearly been reflected in the market and our share price. The fundraising was a great success and brought in a number of respected and supportive institutions that share our long term belief in the project. The Company achieved a placing price significantly higher than that anticipated at the start of the marketing roadshow and prior to the announcement of the BG Group agreement with CNOOC to supply natural gas to China with Australian Foreign Investment Review Board approval. On our current projections, we are now funded for over the next 18 months, by which point I expect the project to have evolved considerably. I would like to thank both our existing and new investors for their endorsement of the Arckaringa Project and I look forward to updating the market on our intensive work schedule throughout its next stage."
The CNOOC-NEI Joint Venture
In November 2009, CNOOC New Energy Investment Ltd ('CNOOC-NEI'), a subsidiary of one of China's largest oil companies, agreed terms for the Joint Venture ('JV') with Altona to complete a BFS for the Arckaringa Project, in return for a 51% interest in Altona's exploration licences in South Australia. The Board believes that the JV has significantly reduced financial and operational risk for Altona shareholders.
The JV secures both funding and a strong partner, not only to carry out the staged evaluation work of the BFS, but also to take responsibility for assessing the full potential of the coal resource and bringing projects to development. The JV is assessing the exciting multiple project potential of the Arckaringa coal deposit, including coal development, coal to liquid ('CTL'), synthetic natural gas, power co-generation and other potential clean energy projects. Additionally, the JV will enable the targeting of CTL exports to China and other Asian markets, and CNOOC-NEI's expertise, resources and market stature will be instrumental in developing the Arckaringa Project.
The base case of the BFS covers a 10 million tonne per annum open cut mine based on the Wintinna coal deposit, to feed:
·; A CTL plant producing 10 million barrels of distillate per annum; primarily zero sulphur diesel fuel, alongside by-products including naptha, sulphur and water, and;
·; An integrated gasification combined cycle plant producing 560 MW of power available for export.
The important next phase of work under the BFS, estimated to take 12-15 months, is scheduled to cover the key steps of mine design and planning, groundwater engineering, base line environmental field work and transport and infrastructure options studies, all of which will underpin the follow-up engineering of the coal conversion plant and other projects. The intention is that once the BFS is completed, the JV will be in the position to take forward not only an internationally significant CTL and power project but other high-value projects as well.
Admission and Dealings
The Placing is conditional on the admission of the Placing Shares to trading on AIM. Application has been made to the London Stock Exchange for the 33,333,334 Placing Shares to be admitted to trading on AIM ('Admission'). It is expected that such Admission will become effective and that dealings will commence on 31 March 2010.
The Placing Shares will, when issued, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive dividends and other distributions declared following Admission. It is expected that CREST accounts will be credited on the day of Admission and that share certificates (where applicable) will be dispatched by first class post by or on 7 April 2010.
Following Admission, the total issued share capital of the Company will be 411,229,955 Ordinary Shares, all of which have voting rights.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, Evolution has conditionally agreed to use its reasonable endeavours, as agent for the Company, to place the Placing Shares at the Placing Price with certain institutional and other investors. The Placing Agreement is conditional upon Admission becoming effective on or before 8.00 a.m. on 31 March 2010 (or such later time and/or date as the Company and Evolution may agree, but in any event by no later than 8.00 a.m. on 30 April 2010).
The Placing Agreement contains warranties from the Company in favour of Evolution in relation to, inter alia, the accuracy of the information contained in this announcement and certain other matters relating to the Group and its business. In addition, the Company has agreed to indemnify Evolution in relation to certain liabilities it may incur in respect of the Placing, except in certain limited circumstances. Evolution has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, for force majeure or in the event of a material breach of the warranties set out in the Placing Agreement.
Placing Authority
Altona has a placement capacity to issue up to 56,714,285 new Ordinary Shares in the capital of the Company. Following Admission, the Company will have authority to issue up to an additional 23,380,951 Ordinary Shares.
For further information visit www.altonaenergy.com or please contact:
| Christopher Lambert | Altona Chairman | Tel: +44 (0) 20 7024 8391 |
| Christopher Schrape | Altona Managing Director | Tel: +44 (0) 20 7024 8391 |
| Simon Edwards | Evolution Securities Ltd | Tel: +44 (0) 20 7071 4300 |
| Tim Redfern | Evolution Securities Ltd | Tel: +44 (0) 20 7071 4300 |
| Paul Youens | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
| Hugo de Salis | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Notes
Altona Energy Plc is an AIM listed Australian based energy company. Its asset is an estimated 7.8 billion tonne coal resource (non-JORC) in the Arckaringa Basin of South Australia (JORC-compliant: 1.287 billion tonnes). This is considered by the Board to be one of the world's largest untapped energy banks. Per Jacobs Engineering's study for the Company, assuming a 50% conversion of CTL fuels and 50% to synthetic gas ('Syngas'), Arckaringa total coal resources (both JORC and non-JORC) would represent respectively 28% and 29% of current North Sea remaining proven reserves of 10,900mb of oil and 114,800 bcf of natural gas.
Altona has already accomplished a number of key phases in its development:
·; The Company has agreed the terms of a joint venture agreement with CNOOC-NEI, a subsidiary of Chinese oil major China National Offshore Oil Corporation, to accelerate the Arckaringa Project towards commercialisation.
·; Under the terms of the agreement, CNOOC-NEI will fund the bankable feasibility study ('BFS') for a coal mine and an integrated value-added project.
·; The current base case for the BFS is a 10mb per year CTL plant and 560MW co-generation power facility.
·; CNOOC-NEI will also act as the operator and take responsibility for assessing the full potential of the coal resource, in return for a 51% interest in the exploration licences.
·; It is envisaged that numerous new additional projects may also be opened up to create a multi-project, multi-national business.
CTL
The quality of the Company's coal is suitable for conversion to synthetic gas ('Syngas'), using existing commercial CTL technologies. The process involves two major stages;
1. gasification to produce Syngas rich in hydrogen and carbon
2. a liquefication stage where the Syngas is reacted over a catalyst to produce high quality, ultraclean synthetic fuels and chemical feedstocks.
CTL is a prime example of clean coal technology - the associated combined cycle units produce negligible sulphur oxides, significantly less nitrogen oxides and 10-20% less CO2 per unit of power generated than a conventional coal fired plant, whilst carbon capture and storage offers the potential to reduce the overall greenhouse gas emissions from CTL to below the 'well to wheel' level of fuels derived from crude oil. The technology is best demonstrated in South Africa, where currently 30% of the country's gasoline and diesel fuel needs are met through CTL plants.
DISCLAIMER
Evolution Securities Limited ("Evolution") which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser to the Company for the purpose of the AIM Rules and is acting exclusively for the Company in relation to the Placing. Evolution is not acting for any other person in connection with the matters referred to in this announcement and they will not be responsible to anyone other than the Company for providing the protections afforded to clients of Evolution or for giving advice in relation to the matters referred to in this announcement.
This announcement has been issued by the Company and is the sole responsibility of the Company.
This announcement does not constitute a prospectus relating to the Company and has not been approved by the UK Listing Authority, nor does it constitute or form any part of any offer or invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any securities in the Company under any circumstances, and in any jurisdiction, in which such offer or solicitation is unlawful. Accordingly, copies of this announcement are not being and must not be mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any United States, Canadian, Australian or Japanese person and any person receiving this announcement, (including, without limitation, custodians, nominees and trustees) must not distribute or send it, in whole or in part, in or into or from the United States, Canada, Australia or Japan.