DGO.L Regulatory News (DGO)

18 Nov 2009 14:58



Not for release, publication or distribution (in whole or in part) in, into or from any Restricted Jurisdiction 

Recommended acquisition for cash by

 Emirates National Oil Company Limited (ENOC) LLC

the ordinary shares that it does not already own in

Dragon Oil plc

to be effected by way of a Scheme of Arrangement

under section 201 of the Companies Act 1963

Posting of Scheme Document

On 2 November 2009 the Independent Committee of Dragon Oil plc ("Dragon Oil") and the Board of Emirates National Oil Company Limited (ENOC) LLC ("ENOC") announced that they had reached agreement on the terms of the recommended acquisition for cash of the entire issued and to be issued share capital of Dragon Oil not already owned by ENOC (the "Acquisition"). The Acquisition will be effected by way of a scheme of arrangement under Section 201 of the Companies Act 1963 of Ireland (the "Scheme").

Since the approach by ENOC, the Independent Committee, together with its financial advisers, has sought to achieve the best outcome for minority shareholders. A priority of the Independent Committee has been to ensure that due process is followed at all times and that the integrity of this process is beyond reproach.

In its assessment of the Offer Price, the Independent Committee, together with its financial advisers, have undertaken significant valuation work on the assets and prospects of Dragon Oil.

Dragon Oil is a single asset company and has made significant progress in developing the Cheleken contract area in the Caspian Sea, offshore Turkmenistan. There are specific geopolitical, operational, and technical risks associated with the contract area and the region which have a significant bearing on the underlying valuation of the asset.

The Independent Committee, who has been so advised by Davy Corporate Finance and HSBC, believes that the terms of the Acquisition to be fair and reasonable for the minority shareholders of Dragon Oil. In providing their advice, Davy Corporate Finance and HSBC have taken into account the commercial assessments of the Independent Committee. 

The cash offer of 455 pence per Dragon Oil share will provide the minority shareholders of Dragon Oil the opportunity to realise a cash exit at a significant premium of 34.6 per cent. to the Closing Price of 338 pence per Dragon Oil Share on 3 June 2009, the last Trading Day prior to the announcement by Dragon Oil that it had received an approach in relation to a possible offer.

In arriving at their decision to recommend the Acquisition, the Independent Committee has also taken into account ENOC's majority controlling shareholding in Dragon Oil, as well as a written irrevocable undertaking from ENOC not to sell or accept any offer for its Dragon Oil shares for a 12 month period commencing on 10 August 2009. As a consequence, the Independent Committee has been unable to engage with other parties because no alternative offer would be capable of completion.

Dragon Oil has today posted a circular to Dragon Oil Shareholders (and for information only, to holders of options over Dragon Oil Shares) (the "Scheme Document") containing, inter alia, the terms of the Acquisition and the Scheme, an explanatory statement pursuant to Section 202 of the Companies Act 1963 of Ireland, notices of the required meetings, a timetable of principal events and details of the action to be taken by Dragon Oil Shareholders. 

To become effective, the Scheme requires the approval of Scheme Shareholders at a court meeting (the "Court Meeting") and of Dragon Oil Shareholders at an extraordinary general meeting (the "EGM"). The meetings will be held at The Grosvenor House Hotel, 90 Park Lane, London W1K 7TN, United Kingdom on 11 December 2009. The Court Meeting will commence at 10:00 am, and the EGM will commence at 10:15 am (or as soon thereafter as the Court Meeting shall have concluded or been adjourned).

Shareholders may cast votes in respect of the Resolutions to be proposed at the Court Meeting and the EGM in any of the following ways, in accordance with the procedures set out in the Scheme Document:

by way of the Forms of Proxy, which accompany the Scheme Document, by post or in person;

by appointment of proxies via the Internet; or

in the case of CREST members, by appointment of proxies through the CREST electronic proxy appointment service. 

Forms of Proxy for the Court Meeting and the EGM (which accompany the Scheme Document) should be returned by post to Capita Registrars at PO Box 7117, Dublin 2, Ireland, or delivered by hand (during normal business hours only) to Capita Registrars, Unit 5, Manor Street Business Park, Manor Street, Dublin 7, Ireland, no later than 48 hours prior to the commencement of each meeting. The completion and return of a Form of Proxy for any of the meetings will not prevent Dragon Oil Shareholders from attending and voting at the Court Meeting or EGM in person if they wish to do so.

It is important that, for the Court Meeting, as many votes as possible are cast (whether in person or by proxy) so that the High Court may be satisfied that there is a fair and reasonable representation of Dragon Oil Shareholder opinion. Dragon Oil Shareholders are therefore strongly urged to complete, sign and return their Forms of Proxy as soon as possible.

The Scheme Document will be available on Dragon Oil's website at www.dragonoil.com.

Capitalised terms used, but not defined, in this announcement have the same meaning as in the Scheme Document.

Enquiries:

The directors of Dragon Oil accept responsibility for the information contained in this document, other than the recommendation and associated opinions of the Independent Directors. To the best of the knowledge and belief of the directors of Dragon Oil (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

The Independent Directors accept responsibility for the recommendation of the Acquisition and associated opinions contained in this document. To the best of the knowledge and belief of the Independent Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

Davy Corporate Finance, which is regulated by the Financial Regulator, is acting exclusively for the Independent Committee of Dragon Oil and no one else in connection with the Acquisition and will not be responsible to anyone other than the Independent Committee of Dragon Oil for providing the protections afforded to clients of Davy Corporate Finance or for providing advice in relation to the Acquisition, the contents of this Announcement or any transaction or arrangement referred to herein. 

HSBC, which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Independent Committee of Dragon Oil and no one else in connection with the Acquisition and will not be responsible to anyone other than the Independent Committee of Dragon Oil for providing the protections afforded to clients of HSBC or for providing advice in relation to the Acquisition, the contents of this Announcement or any transaction or arrangement referred to herein

Any person, who has an interest of one per cent. or more of Dragon Oil Shares may have disclosure obligations under Rule 8.3 of the Irish Takeover Rules, effective from the date of the commencement of the Offer Period.