CERP.L Regulatory News (CERP)

1 Jul 2008 07:00



1 July 2008

LENI GAS & OIL PLC

("Leni Gas and Oil" or the "Company")

Acquisition of 22 per cent. interest in Byron Energy Pty Ltd

Leni Gas & Oil plc, the oil & gas exploration, development and production company, today announces that it has acquired 3,348,554 new shares in Byron Energy Pty Ltd ("Byron"), giving it 22.3 per cent (22.3%) of the issued share capital of Byron for an aggregate cost of approximately US$22 million in cash.

Byron Energy Pty Ltd

Byron is a private Australian company, incorporated in 2005. Since its incorporation, Byron has operated as an oil & gas exploration, development and production company focused on opportunities in the Gulf of Mexico and the USA.

Byron's primary assets comprise rights granted to Byron over oil and gas properties in the shallow waters of the Gulf of Mexico under a scouting agreement (the "Scouting Agreement") with Leed Petroleum plc ("Leed"), a company listed on AIM. Under the Scouting Agreement Byron exclusively presents potential acquisition opportunities and provides additional technical expertise to Leed, as required. The Scouting Agreement remains valid and binding until December 2008. In return Byron is granted rights, exercisable at its discretion for up to one year, to acquire up to 25 per cent. (25%) of Leed's working interest in any such acquisition. To date, Byron has been granted these rights in respect of Eugene Island Blocks 172, 183 and 184, the Grand Isle Blocks 95 and 100, the Ship Shoal Blocks 201 and 205 , the South Marsh Island Blocks 5, 6 and 8, Main Pass Block 115, West Cameron Block 106.

  Under Australian corporation law, Byron is classified a small proprietary company and such is not required to prepare audited financial reports. The unaudited accounts of Byron, for the nine months ended 31 March 2008, show net losses of US$1,259,000 with net assets at the same date of US$2,013,080 of which cash accounted for US$2m. 

If remaining existing options in Byron were exercised the equity interest of Leni Gas and Oil would be 18.6%. 

Highlights

Under the terms of the deal:

1. the Company subscribed for 2,798,554 new ordinary shares in Byron at a price of US$6.57 per share. The aggregate price for the subscription shares was US$18,386,499.78;

2. the Company acquired options over 550,000 new shares in Byron from various existing parties at a price of US$6.00 per option share (meaning total consideration for the acquisition of the options of US$3,300,000); 

3. the Company exercised each of the options which had an exercise price of A$0.60 (total exercise price of A$330,000);

4. Leni Gas & Oil shall be entitled to appoint and maintain a director on the board of Byron for as long as it maintains an interest of greater than 15 per cent. (15%) of the issued share capital.

David Lenigas, Chief Executive commented:

"The acquisition of the shares in Byron is a significant addition to our Company's assets. Through its Scouting Agreement with Leed, Byron has a 25 per cent option over exciting assets introduced to Leed, by Byron, in the Gulf of Mexico and the United States. Byron is an exciting prospect that complements Leni Gas and Oil's existing exploration projects."

1 July 2008

Pelham PR

Charles Vivian Tel: +44 (0)20 7743 6672

Evgeniy Chuikov Tel: +44 (0)20 3008 5506