22 Mar 2010 07:00
Press Release
For immediate release: 22 March 2010
EnCore Oil plc ('EnCore' or 'the Company')
Sale of assets to Egdon Resources
Further to the announcement on 23 September 2009, EnCore Oil plc (LSE: EO.) announces that Sale and Purchase Agreements have been signed with Egdon Resources plc ('Egdon', LSE: EDR) for the sale of the group's onshore assets (onshore UK and onshore France) together with its interest in the Ceres gas field, in return for a material equity stake in Egdon (the "Sale").
The key points of the Sale are:
·; The transfer to Egdon of EnCore's interests in nine UK and two French onshore licences and an interest in the Ceres gas field on the UKCS
·; The issue to EnCore and its subsidiaries at completion of the Sale of 39,200,000 ordinary shares in Egdon, which will equate to 29.998 per cent. of Egdon's enlarged share capital on completion of its placing also announced today
·; The payment by Egdon to EnCore of £100,000 upon completion of the sale of the subsidiary holding the French licences
·; The appointment of an EnCore nominee as a Non-Executive Director of Egdon, to take effect at the time of completion of the first Sale and Purchase Agreement. It is anticipated that the nominee will be Alan Booth, EnCore's Chief Executive Officer
·; The establishment of a Technical Services Agreement under which EnCore will provide Egdon with technical, commercial and accounting services, to be charged on a day-rate basis
·; The provision by EnCore to Egdon of a loan facility of up to £1.5 million, available for a two year period from completion of the transactions, at an interest rate of 10% or LIBOR plus 5% if greater
·; The commitment by EnCore to retain its shareholding in Egdon for a minimum of 12 months from the date of admission to trading on AIM of the Egdon shares to be issued in consideration, with orderly market provisions for a further 12 months
The transfer to Egdon of EnCore's UK onshore licences and interest in Ceres is subject to approval by Egdon shareholders at a general meeting to be held on 6 April 2010; the usual regulatory approvals from the Department of Energy and Climate Change (DECC); and approval from the joint venture partners on each licence. In addition French regulatory consent will be required for the sale of the subsidiary holding Encore's French licences.
Commenting on the acquisition, Alan Booth, EnCore's Chief Executive Officer said:
"Our shareholding in Egdon will place a tangible and transparent valuation on parts of our overlooked asset base. Egdon is an experienced and committed onshore player, and, as a result of this transaction, we believe that Egdon now has the capacity and resources to grow into a significant onshore E&P company. As Egdon's largest shareholder, EnCore will continue to actively support and assist in Egdon's ambitious growth plans."
Commenting on EnCore's upcoming activity, he added:
"EnCore's strategy remains unchanged, and we very much look forward to drilling both the Catcher and Cladhan wells in the coming months. We have also recently finalised arrangements for the marketing of our 100 per cent. interest in the prospective 130bcf Esmond gas storage project. From a future strategic perspective, we are seeing increasing consolidation activity and note recent announcements of strategic directional changes to companies currently principally involved in the UK offshore E&P sector. With this changing backdrop to the UK offshore small cap sector, and the continuing limited availability of debt and equity capital, we remain alert for any consolidation or acquisition opportunities that may present themselves. We believe that our strong capital resources, our debt free balance sheet and our minimal commitments should serve us particularly well in this regard."
For further information, please contact:
| EnCore Oil plc | www.encoreoil.co.uk |
| Alan Booth, Chief Executive Officer | +44 (0)20 7224 4546 |
| Eugene Whyms, Chief Financial Officer |
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| Yvonne Fraser, Investor Relations Manager | +44 (0)7957 241 408 |
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| Westhouse Securities Limited |
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| Tim Feather | +44 (0) 20 7601 6100 |
| Matthew Johnson |
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Notes to editors:
Assets included in the divestment are listed below:
| Onshore UK |
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| Licence |
| Equity (%) | Operator |
| PEDL068 | Cleveland Basin | 20.0 | Egdon Resources |
| PEDL256 | Weald Basin | 7.5 | Northern Petroleum |
| PEDL125 | Weald Basin | 10.0 | Northern Petroleum |
| PEDL126 | Weald Basin | 10.0 | Northern Petroleum |
| PEDL154 | Weald Basin | 10.0 | Northern Petroleum |
| PEDL155 | Weald Basin | 10.0 | NP Weald Limited |
| PEDL098 | Wessex Basin | 7.5 | Northern Petroleum |
| PEDL240 | Wessex Basin | 7.5 | Northern Petroleum |
| PEDL253 | Humber | 60.0 | EnCore |
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| Onshore France |
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| Mairy | Paris Basin | 30.0 | Lundin |
| Nimes | Rhone Graben Basin | 100.0 | EnCore |
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| Ceres |
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| P.1241 | 47/9c, Southern North Sea | 10.0 | Centrica |
About EnCore Oil plc
EnCore Oil plc (LSE:EO.) is an oil and gas exploration and production (E&P) company quoted on AIM.
It is not the Company's aim to build a full cycle E&P company. The principal strategy is to create shareholder value through the successful exploration and appraisal of prospects and discoveries. The Company will seek to monetise or exchange the asset at the appropriate point in its life cycle and return value directly to shareholders wherever possible.
EnCore has an experienced and proven management team, a number of whom were responsible for the discovery of the Buzzard field in the UK North Sea, which currently produces over 10 per cent. of the UK's total oil production.
All EnCore's commercial and material technical evaluations are undertaken in-house by the EnCore team. This brings both continuity to the management and development of the assets and an ownership that is vital to unearth the best and most creative new ideas and opportunities.
www.encoreoil.co.uk