AOGL.L Regulatory News (AOGL)

Attis Oil & Gas Ltd / Index: AIM / Epic: AOGL/ ISIN: VGG6622A1057 / Sector: Oil and Gas

7.00am 28 May 2020

Attis Oil & Gas Ltd ('the Company')

Resumption of Trading on AIM

Fundraise of £600,000 and Conversion of Bridge Loan Facility

The Company announced on 2 January 2020 that it had entered into a binding Memorandum of Understanding (MOU) with a North American focussed oil and gas company (the "Target") in relation to the potential acquisition of that company (the "Proposed Transaction"). The Proposed Transaction would have been classified as a reverse takeover in accordance with the AIM Rules for Companies and accordingly, at the request of the Company, the Company's shares were suspended from trading on AIM until either the publication of an admission document setting out, inter alia, details of the Proposed Transaction or until confirmation is given that these discussions have ceased.

Due to a number of factors, not least the impact of the Global Coronavirus pandemic on oil prices, and the current economic conditions, discussions with the Target have ceased, the MOU has been terminated and Attis will not be progressing the Proposed Transaction. 

Accordingly, trading in the Company's Ordinary Shares on AIM is expected to recommence with effect from 7.30 am on 28 May 2020.

Placing

The Company has placed 4,347,826,129 new ordinary shares at 0.0115 pence per share ("Placing Price") ("Placing Shares") raising gross proceeds of £500,000 (the "Placing") before expenses. The Placing has been undertaken by Peterhouse Capital Limited ("Peterhouse"), who have been appointed as the Company's broker (the "Broker") with immediate effect.

Broker Option

The Broker Option is a facility to allow existing shareholders of the Company, being shareholders of the Company who hold shares in the Company as at the close of business on 27 May 2020 ("Existing Shareholders") to participate in the Fundraise on the same basis as the Placing,

In order to allow Existing Shareholders to have an opportunity to subscribe for new ordinary shares in the Company at the Placing Price ("Broker Option Shares"), the Company has granted Peterhouse a Broker Option over 869,565,175 new ordinary shares in the Company exercisable at the Placing Price raising £100,000 before expenses.

The Broker Option will be exercised by Peterhouse on 28 May 2020 to conditionally issue 869,565,175 Broker Option Shares, on the same terms and conditions as the Placing Shares.

Participation in the Broker Option is only available to Existing Shareholders and all orders from such Existing Shareholders will be accepted and processed by Peterhouse at Peterhouse's sole discretion. Peterhouse is entitled to participate in the Broker Options as principal and has undertaken to fully exercise the Broker Option.

To subscribe for Broker Option Shares, Existing Shareholders should communicate their bid to Peterhouse via their stockbroker as Peterhouse cannot take direct orders from individual private investors. Existing Shareholders who wish to register their interest in participating in the Broker Option Shares should instruct their stockbroker to call Peterhouse on STX: 76086 or +44 (0) 20 7220 9792. Each bid should state the number of Broker Option Shares the Existing Shareholder wishes to subscribe for at the Placing Price.

Peterhouse may choose not to accept bids and/or to accept bids, either in whole or in part, on the basis of allocations determined at their discretion (after consultation with the Company) and may scale down any bids for this purpose on such basis as Peterhouse may determine. Peterhouse may also, subject to prior consent of the Company, allocate new ordinary shares after the time of any initial allocation to any person submitting a bid after that time.

Peterhouse has been issued with 260,869,565 warrants to subscribe for ordinary shares at the Placing Price for a term of 3 years.

Conversion of Bridge Loan Facility

In October 2019, the Company raised £420,000 through a five-month senior secured funding facility ("Bridge Loan"). The Bridge Loan was due for repayment on or before 21 March 2020. The material terms of the facility comprised interest of 10% per annum accruing monthly and paid with principal at the end of the term, a fixed and floating charge over the Company's assets, and the issue of 460 million five-year warrants priced at 0.1 pence per share.

The Company announced on 23 March 2020 that the Bridge Loan holders had agreed to extend the repayment date on a monthly rolling basis.

Holders of the Bridge Loan have been offered the opportunity to convert their outstanding Loan and interest into Ordinary Shares in the Company at a price of 0.0075 pence and a re-pricing of the warrants to 0.015 pence per share.

Holders of £370,543.14 (principal plus accrued interest) of the Bridge Loan have elected to convert and therefore the Company has issued 4,940,575,180 Ordinary Shares at 0.0075 pence per share ("Conversion Shares").

The remaining Bridge Loan Holders holding £74,846.51 in principal and accrued interest will be repaid from the proceeds of the Placing in accordance with the terms of the Bridge Loan.

Paolo Amoruso and Thom Board, directors of the Company, along with Sebastian Marr, a 10.9% shareholder have an interest in the Bridge Loan (being £64,958.77, £26,527.40 and £158,593.89 respectively). Accordingly, the conversion by Sebastian Marr and Jam & Sons Limited (a company in which Thom Board is a 49% shareholder) and the partial conversion by Paolo Amoruso of the Bridge Loan (into 2,114,585,228, 353,698,630 and 433,058,447 Ordinary Shares respectively) (the "Transaction") is a Related Party Transaction under the AIM Rules. Accordingly, the independent director, being Sarah Cope, considers that, having consulted with the Company's Nominated Adviser, the terms of the Transaction are fair and reasonable insofar as the Company's shareholders are concerned. This conclusion has been reached noting the Company's current limited financial resources and the security provided to the Bridge Loan Holders over the Group's assets which could have included the proceeds of the recent sale of the Company's interest in Zink Ranch. The terms which the Company has been able to negotiate reflect that position and without the retirement of the Bridge Loan it is doubtful whether the Company could attract suitable new investment opportunities as referred to below. Reaching an agreement with the debtholders, however, leaves the Company in a significantly improved financial position.

Following the Transaction, the interests of Paolo Amoruso and Thom Board in the Company's share capital are as follows:

Following the Transaction, Sebastian Marr will be interested in 2,537,478,401 ordinary shares representing 17.26% of the enlarged share capital and will hold 150,000,000 warrants to subscribe for ordinary shares at 0.015 pence per share.

Settlement of Existing Creditors

In addition, the Company has agreed to settle amounts owed to creditors amounting to £76,316 through the issue of 663,618,610 new ordinary shares at the Placing Price ("Creditor Shares").

Application has been made for the admission of 10,821,585,094 new ordinary shares (comprising the Creditor Shares, the Conversion Shares, the Placing Shares and the Broker Option Shares) to trading on AIM. Trading in the new ordinary shares is expected to commence on 2 June 2020.

Board Changes

It is intended that at least one additional director will be appointed to the Board of the Company in due course. Thom Board, the Company's COO will resign on the appointment of an additional director. Paolo Amoruso has provided notice of his intended resignation from the Board of the Company, but the terms and timing of his departure are under discussion. A further announcement will be made once this is clarified.

Company Operations

The Company has been conducting an asset sale programme over the course of the last few months. The Company's remaining wholly owned and operated asset, the Austin Field, is currently shut in pending an improvement in oil prices which will result in either a resumption of cashflow from that field or a sale of the asset.

The effect of any disposal of the Austin Field would be subject to Ordinary Shareholder approval at a General Meeting as, in accordance with AIM Rule 15, this would constitute a fundamental change of business of the Company with the Company ceasing to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Any decision permanently to cease operations at the Austin Field would also have a similar effect.

Following completion of any such disposal or decision permanently to cease operations, the Company would become an AIM Rule 15 cash shell and as such would be required to make an acquisition or acquisitions which constituted a reverse takeover under AIM Rule 14 ("Reverse") on or before the date falling six months from completion of the Disposal failing which, the Company's Ordinary Shares would then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM would be cancelled six months from the date of suspension should the Company not have completed a Reverse by then.

The Company is, therefore, actively seeking alternative transactions to rebuild value for shareholders. The recapitalisation of the Company through the debt conversion and the Fundraising puts the Company in the position to enable the Board to find and attract new investment opportunities.

Paolo Amoruso, Attis' Executive Chairman said, "We are going through an unprecedented time that has brought the world economy and our industry essentially to a halt. We received less than expected from the sale of Zink Ranch, were forced to shut in operations at Austin and had to relinquish the bond to dispose of the Fort Worth field. My role in Attis has run its course unfortunately and while I plan to remain to assist in closing out existing matters in the US, providing a smooth handover and to seek alternative transactions, the Company has taken a different path that requires me to provide notice of my departure as required under my service agreement It has been a privilege to serve the shareholders."

**ENDS**

For further information visit www.attisog.com or contact the following: