CERP.L Regulatory News (CERP)

11 June 2020

COLUMBUS ENERGY RESOURCES PLC

("Columbus" or the "Company")

Recommended all share merger with Bahamas Petroleum Company plc

Columbus, the oil and gas producer and explorer focused on onshore Trinidad and Suriname, is pleased to announce that it has reached agreement on the terms of a recommended all-share merger ("Merger") with Bahamas Petroleum Company plc ("BPC")(AIM ticker: BPC).

Highlights

· For each Columbus share held by Columbus shareholders, they will receive 0.803 BPC shares (the "Offer")

· The Offer represents a value of approximately 2.67 pence per Columbus share based upon the BPC closing price of 3.33 pence on 10 June 2020, being the latest practicable date prior to the date of this announcement.

· The Offer values the entire issued and to be issued share capital of Columbus at approximately £25.1 million and represents, as at 10 June 2020, being the latest practicable date prior to this announcement:

o a premium of 11 per cent. to the Columbus closing price of 2.40 pence per share on 10 June;

o a premium of 25 per cent. to the one-month volume weighted average price per Columbus share as at close of business on 10 June; and

o a premium of 36 per cent. to the two-month volume weighted average price per Columbus share as at close of business on 10 June.

· Subject to the assumptions set out in the Announcement, Columbus shareholders and related parties will in aggregate hold approximately 23.9 per cent. of the enlarged issued share capital of BPC.

· Mr Leo Koot (Executive Chairman of Columbus) will join the Board of BPC as a Non-Executive Director.

Full details of the proposed Merger are set out in the RNS announcement of the same date (the "Announcement").

Leo Koot, Executive Chairman of Columbus, commented:

"Today we start a new and exciting chapter for Columbus Energy Resource PLC and its shareholders. Following a period of intense due diligence and negotiation, we are delighted and pleased to have received the firm intention from Bahamas Petroleum Company ("BPC") to merge our two companies. The merger is ideal in terms of asset overlap and will create a combined company that is stronger than the sum of its two parts.

Columbus shareholders will gain access to the high impact Perseverance 1 exploration well in The Bahamas, which we expect will be drilled in Q4 2020/Q1 2021. If successful, Perseverance 1 will transform the company as it has a P50 prospective oil resource of 770 million barrels, with an upside of 1,440 million barrels. It is rare for a relatively small oil & gas company to have access to a prospective resource of this size.

In return, BPC gain access to our existing production base in Trinidad and our strong appraisal/development portfolio (namely in the South West Peninsula in Trinidad and the Weg Naar Zee block in Suriname). Importantly, BPC brings a strengthened balance sheet to the combined group and I believe the combined entity will be able to progress faster in unlocking the value of our appraisal and development assets.

The combined group will create a larger, more diversified oil & gas champion for the Caribbean and South America, with assets that range across the full spectrum of oil and gas activities, from exploration through appraisal and development to production.

The Board of Columbus is unanimous in its recommendation that this merger is in the best interests of Columbus shareholders and we hope you share our enthusiasm for the future for the combined entity. The Columbus Board intends to recommend that Columbus shareholders accept the proposed transaction. We look forward to your support in the weeks ahead as we progress with the approvals to complete the merger."

Expected timetable

The Company expects that a Circular, describing the Merger and the steps required to implement the Merger, will be send to shareholders in late June 2020, with the relevant shareholder meetings held late July 2020 and implementation of the Merger effective early August 2020. The detailed timetable is set out in the Announcement.

Conditions to the Merger

Full conditions of the Merger are set out in the Announcement; but it is noted that the Merger is conditional on (amongst other things):

· Columbus shareholders approving the Merger at a General Meeting, including its implementation by way of Scheme of Arrangement and associated changes the Company's Articles of Association necessary to implement the Merger.

· BPC shareholders approving, at an Extraordinary General Meeting, the issuance of new ordinary shares to implement the Merger.

· Receiving Heritage Petroleum Company Limited's consent to the change of control with respect to the applicable contracts for the Goudron, Trinity Inniss and South Erin fields and the non-imposition of a change of control payment (where applicable).

· Receiving no objection from Staatsolie's to the merger with respect to the Weg Naar Zee block in Suriname.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Contact Information