Last checked at 7 Aug 2008 07:00
Not for distribution in or into the United States, Canada, Australia, the Republic of Ireland, Japan or South Africa.
These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933 (the "US Securities Act") or an exemption therefrom. Independent Resources plc has not registered and does not intend to register any of the Placing Shares under the US Securities Act. The Placing Shares will not be offered or sold to the public in the United States.
Independent Resources Plc
(the "Company")
Placing
Notice of EGM
Trading Update
Director Shareholding
The Company is pleased to announce that it has conditionally raised £6.91 million (prior to expenses) through a placing of 7,278,158 ordinary shares of 1p each in the capital of the Company ("Placing Shares") at 95p per Placing Share with institutional and other investors (the "Placing"). The Placing is conditional on certain resolutions being passed at the Company's extraordinary general meeting (the "EGM" or "Extraordinary General Meeting"), notice of which will be sent to shareholders.
The Extraordinary General Meeting will be held at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA on 26 August 2008 at 11 a.m.
Placing and Use of Proceeds
The Company has conditionally raised £6.91 million (prior to expenses) through the Placing by Seymour Pierce of 7,278,158 Placing Shares with institutional and other investors. The net funds receivable by the Company are expected to be approximately £6.67 million. The issue of the Placing Shares is conditional, inter alia, upon the approval of Shareholders to be sought at the Extraordinary General Meeting convened for 26 August 2008.
As part of the Placing, Alan Thomas, a Non-Executive Director of the Company, will be subscribing for 15,000 Placing Shares at the Placing Price. Following the Placing, Mr. Thomas will hold 31,667 Ordinary Shares, representing 0.08 per cent. of the Enlarged Share Capital.
The Directors believe that raising new funds by way of the Placing is the most appropriate method of funding the Company and the projects detailed below, at the present time. The Board considers that a general offer to existing Shareholders by way of a rights or other pre-emptive issue is not appropriate at this stage of the Company's development due to the significant additional costs that would be incurred and the delay in the production and approval of a prospectus. In addition, the Directors are keen to broaden the Company's institutional investor base to provide greater liquidity and, in the future, additional sources of funds should the Company require them.
The net proceeds of the Placing will be utilised by the Company in the development of its various business interests. Of the net proceeds of the Placing, the Company expects to use approximately £2.0 million in connection with ongoing work and development of the storage project at Rivara, £3.5 million in connection with the Fiume Bruna CBM project and £1.17 million for general working capital purposes.
Project Update
Rivara Project, Italy
The Company announced on 25 June 2008 that it had finalised the agreement under which the Italian energy group ERG will help permit and develop its planned underground gas storage facility at Rivara in the Po Valley, northern Italy. The transaction with ERG's subsidiary, ERG Power & Gas SpA, valued the Company's 85 per cent. participation in Rivara at €53.8 million (£42.6 million), equivalent to 127p per Existing Ordinary Share.
Following completion of the agreement, which was announced on 25 June 2008, the Company will be submitting updated documentation to Italy's Ministry of Environment pursuant to the project's Environmental Impact Study ("VIA") as it seeks the Ministry's environmental clearance. The incoming Italian government has announced a relatively pro-business and pro-development platform which can be expected to improve efficiency within certain key ministries. The Ministry of Environment has inherited a new VIA process from the outgoing government that is proclaimed to be more transparent and purely technical than previously, as well as more efficient in its interaction with the public.
The Company is currently seeking environmental approvals ahead of the planned development of Rivara, a deeply buried fractured limestone structure viewed as ideally suited to efficient gas storage thanks to the presence of an active aquifer that provides constant natural water drive. Rivara has an expected nameplate working gas capacity of 3.2 billion cubic metres and the ability to deliver in excess of 32 million cubic metres of gas per day back into the Italian pipeline system, at an estimated cost per cubic meter of storage of €0.13 and an estimated cost per million of cubic meters per day of deliverability of €12.5 (based on an estimated development cost of €400 million).
On 2 July 2008, the Company announced that it had reached formal agreement with Confindustria Ceramica (one of Northern Italy's biggest gas consumers and an important trade federation in the region in which the Rivara project is located) to provide it with up to 4 per cent. of Rivara's expected nameplate capacity for gas storage. In addition, the Company is continuing with discussions to bring a second strategic development partner into the Rivara project alongside ERG, at the appropriate time. The Company has also appointed Schlumberger, the oilfield services group, to advise on and manage the Rivara subsurface development programme.
Fiume Bruna, Italy
Fiume Bruna is a CBM prone area for which the Company holds the exploration rights. Fiume Bruna has an estimated 4.8 billion cubic metres in-place resource and initial testing, the results of which were announced in July 2007, indicated an estimated recoverable resource of 2.6 billion cubic metres. Initial testing in 2006 and 2007, which included one well being drilled and sampled, shows a single seam of gas active coal approximately 7 metres thick, which requires further appraisal. In April 2008, the regional government approved the Company's environmental submission and formal title to explore and appraise Fiume Bruna is expected in summer 2008. In addition, the Company has engaged a seismic contractor for Fiume Bruna.
The Directors intend to conduct limited new 2D seismic acquisition to locate the first pod of wells during summer 2008. During autumn 2008, the Directors intend to drill one well and conduct long-term tests to prove flow rates of gas and water. During 2009, the Company intends to acquire additional seismic data, drill the balance of wells in the first pod and produce gas into local markets. The Directors intend to apply for a full development concession and potentially bring in a partner for full field development in 2010.
The Company intends to gain an estimated additional 1.8 billion cubic metres recoverable resources using CO2 injection from nearby geothermal projects. The Directors estimate that the net present value of the Fiume Bruna project would be increased significantly by this. Fiume Bruna also has potential for carbon sequestration but no account has been made of the possible future value of emission credits from this activity. In addition, a new extension, south of Fiume Bruna, is awaiting initial award.
Ksar Hadada, Tunisia
Ksar Hadada is an onshore exploration permit which the Company estimates holds a potential recoverable resource in excess of 150 MMboe net to the Company, before applying production sharing contract terms. The permit is operated by Petroceltic and the Company have a 40 per cent interest in it.
The permit for Ksar Hadada was renewed by the Tunisian government in April 2008 for a period of three years and farm-out discussions are underway with several companies. The Company has undertaken, on behalf of the licence holders, an in-depth remapping of this 5,600 km2 permit area. This work not only confirmed the existing prospects and identified several new ones but also identified a new hydrocarbon play in the block - the Acacus Sandstone.
Business Development
The Company has filed an application for the award of an exploration permit covering an area onshore Italy and expects to hear the result of this application in the near future. The area contains an existing oil discovery which may be suitable for the application of EOR techniques. Initial estimates of recoverable reserves after using these techniques are of the order of 2 MMbbl of oil. The Company continues to assess additional potential projects in Europe and the Directors also intend to strengthen the board in line with the Company's continuing business development.
Neither the Ordinary Shares nor the Placing Shares have been, or will be, registered under the United States Securities Act of 1933 (as amended) (the "Securities Act") or under the securities laws of any state of the United States or under any of the relevant securities laws of Canada, Australia, the Republic of Ireland, South Africa or Japan. Subject to certain exceptions, none of the Placing Shares may, directly or indirectly, be offered, sold, delivered or transferred in or into the United States, Canada, Australia, the Republic of Ireland South Africa or Japan. The Placing Shares being offered and sold outside of the United States are being offered and sold in reliance on Regulation S.
This announcement includes forward-looking statements. The words "believe", "anticipate", "expect", "intend", "aim", "plan", "predict", "continue", "assume", "positioned", "may", "will", "should", "shall", "risk", and any other similar expressions that are predictions of or indicate future events and future trends identify forward-looking statements. These forward-looking statements include all matters that are not historical facts. Shareholders should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are in many cases beyond the Company's control. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and the Company's actual results of operations, financial condition and liquidity, and the development of the industry in which it operates may differ materially from that made in or suggested by the forward-looking statements contained in this announcement. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that the Company, or persons acting on its behalf, may issue.
These forward-looking statements are made as of the date of this announcement and are not intended to give any assurances as to future results. Save as required by law or regulation the Company undertakes no obligation to update these forward-looking statements, and will not publicly release any revisions it may make to these forward-looking statements that may result from events or circumstances arising after the date of this announcement.
The resource estimates contained herein have been internally produced by the Company and have not been reviewed and verified by an independent Competent Person (as defined in the AIM Guidance Note for Mining, Oil and Gas Companies (March 2006)). The estimates in relation to Fiume Bruna are also based upon the report dated 6 December 2005 by Blackwatch Petroleum Services Limited contained in the Company's AIM admission document and were included in the Company's interim financial results for the period to 31 March 2008. The resource estimates contained herein have been produced to Society of Petroleum Engineers' standards. All the estimates have been reviewed and verified by Dr Stephen Staley, Managing Director of the Company, for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies (March 2006). Dr Staley holds a BSc (Hons) in geophysics, a PhD in petroleum geology and an MBA. He is a Fellow of the Geological Society and a member of the European Association of Engineers & Geoscientists and the Petroleum Exploration Society of Great Britain.
ENDS
For further information contact:
| Independent Resources plc Stephen Staley Managing Director | 07771 838 753 |
| Seymour Pierce Limited (Broker) Jonathan Wright / Parimal Kumar Corporate Finance Richard Redmayne / David Banks Corporate Broking | 020 7107 8000 |
| Deloitte Corporate Finance (Nominated Adviser) David Smith Corporate Finance | 020 7007 8177 |