7 Jun 2017 07:00
THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE OR THE SOLICITATION OF AN OFFER TO BUY THE SECURITIES DISCUSSED HEREIN IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
7 June 2017
Eland Oil & Gas PLC
Proposed placing by way of an accelerated bookbuild
Eland Oil & Gas PLC ("Eland" or the "Company" or the "Group"), an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, is pleased to announce the proposed placing of new voting ordinary shares of 10 pence each in the Company (the "Placing Shares") by way of an accelerated bookbuild in order to raise gross proceeds of between c.$14.5 million and c.$19.5 million (the "Placing"). It is expected that the Placing Price will be at, or around, 55 pence per Placing Share.
The Placing is being conducted through a bookbuilding process, which will be launched immediately following this announcement, and will be made available to new and existing eligible institutional investors and the books are expected to close no later than 07:00 UK time on 8 June 2017, but Panmure Gordon (in consultation with Canaccord and Pareto) reserves the right to close the books earlier, without further notice.
Certain of the Company's major shareholders as well as certain directors have indicated a willingness to participate in the Placing.
Panmure Gordon (UK) Limited ("Panmure Gordon") is acting as Lead Bookrunner to the Company; Pareto Securities Limited ("Pareto Securities") is acting as Joint Bookrunner to the Company; and Canaccord Genuity Limited ("Canaccord") is acting as Nominated Adviser and Joint Bookrunner to the Company in connection with the Placing.
The net proceeds of the Placing will be used:
· to accelerate the commencement of the workover and side-track of the Opuama-7 well;
· to fund the installation of a Lease Automatic Custody Transfer unit ("LACT unit") at OML 40's custody transfer point with the Trans Escravos Pipeline ("TEP"), to preserve optimal value of crude export payments from transportation to the Company's pre-existing export facility
· to accelerate the commencement of the re-entry, completion and production of the Gbetiokun-1 well via an Early Production System (EPS), including dredging and the ordering of long-lead items, to allow, assuming the larger quantum fundraise, contiguous development with the Op-7 side-track; and
· for working capital and contingency purposes.
The timing of the Company's work programme will be adjusted depending on the level of funds raised in the Placing. Further details of the work programme will be provided in the results of the Placing announcement.
Following the successful workover of Op-7 and the re-opening of Op-1 current gross production stands at 11,5000 bopd. The competent person, Netherland, Sewell & Associates Inc. ("NSAI"), anticipates that the workover of Opuama-7 will initially flow at a rate of 5,900 bopd (gross 2P), resulting in aggregated gross initial production rates from Opuama-1,-3 and -7 of approximately 17,500 bopd. The Company has modelled that at conservative production levels of 15,500bopd netbacks of c. $24.74/bbl* will be achieved when exporting through shipping, as previously employed. However, it is anticipated that the equivalent netback under the current export route is c. $31.32/bbl*.
It is further anticipated by the Company that the workover of Gbetiokun-1 will deliver at least a further 8,000 bopd (gross) to OML 40 production, bringing the Company's anticipated total initial gross production to 25,400bopd (net: 11,430 bopd) (NSAI April 2017 combined estimate: 22,000 bopd gross, 9,900bopd net).
George Maxwell, CEO of Eland, commented:
"Over the last 18 months we have significantly grown our production base, made substantial progress de-risking our highly attractive development projects, diversified our export routes and materially increased our recoverable reserves from our current well inventory, identifying further meaningful upside.
Today's proposed placing will allow us to capitalise on these achievements and accelerate our workover program, in particular the side-tracking of Opuama-7 followed by the re-entry, completion and production of the Gbetiokun-1, in the most capital efficient manner. OP-7 and GB-1 combined are capable of delivering c.13,900 bopd (gross), a near trebling of recent production rates, and will therefore significantly increase cashflows which in turn will be used towards funding the development of our valuable asset base"
Background to and reasons for the Placing
Since January 2016, the Company, through Elcrest Exploration and Production Nigeria Ltd ("Elcrest"), Eland's joint venture company, has delivered a significant increase to its production base from the Opuama field in OML 40 through the low-cost workover of the Opuama-3 well. In late 2016 the Company reacted decisively when it became clear that the Forcados Terminal would remain unavailable, by commencing the development of an alternative crude export solution through shipping. Following the implementation of shipping in January 2017 production stabilised at 8,500bopd from Opuama prior to increasing to over 11,500bopd following the recommencement of transportation to OML 40's pre-existing export facility. At 11,500bopd the Company has modelled the netbacks to be $28.62/bbl* using the current export route (compared to $18.88/bbl* under the shipping route as previously employed).
In addition to the successful workovers of Opuama-1 and Opuama-3, Eland has also sought to progress other development opportunities on OML 40 and in April published independent third-party Reserves evaluations on the Opuama-1, -3, -7 and Gbetiokun-1 workovers. These workovers will ultimately access an additional gross 22.6 million barrels of crude than previously forecast by NSAI from these four wells. This is a three-fold increase in recoverable reserves attributable to Opuama-1, -3, -7 and Gbetiokun-1.
As announced on 27 April 2017, NSAI evaluated Opuama-7 to contain gross 2P Reserves of 9.1 mmbbl (net: 4.1 mmbbl) as part of a work program consisting of re-entering Opuama-7, retrieving the production tubing, milling a window in the casing and drilling a near-vertical sidetrack a short distance to the north east, to a location where seismic data indicate both the D1000 and D2000 reservoirs will be penetrated by the well. It will be completed in the D1000 and D2000 reservoirs. NSAI forecasts that the well will produce at an initial gross rate of between 5,170bopd (1P) and 8,919bopd (3P). The remaining gross capex associated with Op-7 is $7 million. The Company expects operations on Opuama-7 to commence in the second half of 2017.
Similarly, Eland, together with its licence partners, intend to initiate production in the Gbetiokun field as part of a work program consisting of a re-entry and completion of the existing Gbetiokun-1 well and an EPS. Assuming a larger quantum fundraise of towards c.$19.5 million, it is intended that the Gbetiokun-1 well would commence in the second half of 2017. Otherwise, the Company would seek to establish greater levels of cash, including from operations, before commencing operations in late 2017. As announced on the 27 April 2016 and further reviewed in April 2017, NSAI appraised Gbetiokun-1 to contain gross 2P Reserves of 10.8mmbbl (net entitlement: 3.9mmbbl), flow at an initial gross rate of c.8,000 bopd (net: 3,600 bopd) and generate an NPV(10) of $44.2 million** net to Eland. The gross capital cost of the Gbetiokun-1 re-entry and the EPS development is estimated at $16 million (net: $7.2 million). Fixed operating costs are estimated at $9.3 million per annum and the variable operating costs at US$3.9 per barrel (gross). The Gbetiokun-1 well location near the Benin River Production allows for production to be exported down the river to a new tie-in point to be built into the Forcados pipeline system.
The Directors believe that, using the proceeds from the Placing for the contiguous development of Opuama-7 and Gbetiokun-1 will build upon the Company's recent operational successes and maintain momentum. Furthermore, it will further de-risk the Company's portfolio by having two producing fields. The further doubling of production rates from current reported levels, through the development of Opuama-7 and Gbetiokun-1, will significantly increase Eland's cashflows. These cashflows are anticipated to be utilised to support the future development of the Company's existing asset base along with underpinning an expected increase in available debt funding for the Company.
Looking further ahead into late 2017 and 2018, the re-entry and completion of Ubima-1, producing via an early production system is planned, potentially contributing gross production of 2,130 bopd (net: 1,874 bopd). Furthermore, the drilling of further infill/development wells on Opuama and Gbetiokun is planned to follow the OP-7 and Gb-1 developments. (the 2P reserves attributable to Gbetioken full field development are 26 MMstb gross, although Company estimates are significantly higher (65-80 MMstb gross). It is currently anticipated that these further programmes would be funded from sufficient free cash flow and an anticipated increase in debt capacity.
The Company currently has $6.3m cash with approximately $8.1 million outstanding from its shipping offtake partner. From the amounts due from its offtaker approximately $6 million will be used to settle amounts owing to its shipping contractor and FPSO provider. As set out in the Company's accounts released earlier today, the transition back to exporting through the Company's pre-existing export facility will require careful working capital management and the proceeds of the Placing can be applied to help in this process.
Notes:
* Netbacks are modelled with a $52/bbl oil price assumption; shipping opex of $4.5 million/month; and pipeline opex of $2.50/bbl.
** Net Entitlement is based on treating Eland funding of the Starcrest Nigeria Energy Limited (Starcrest) share of Elcrest E&P Nigeria Limited as a carried working interest, resulting in an Eland participating interest of 45.00 percent for the life of the Gbetiokun EPS and considering no payout of the Starcrest loans resulting from the Gbetiokun EPS. The economics above are point forward from 31 March 2017 and do not include any Elcrest tax losses or capital allowances to that date. The economics above assume five years of Pioneer Tax Status, up to 1 May 2019.
Use of proceeds
As mentioned above, the Company intends that the proceeds of the Placing will be used for the following purposes:
(i) Opuama-7 capex - c. $5 million
· Including clearing access, dredging, piling, well re-entry, and production equipment.
(ii) LACT Unit capex - c. $2 million
· Including shipping and installation at OML 40's custody transfer point with the TEP.
(iii) Gbetiokun-1 capex - c. $7.5 million
· Acceleration the capex spend, including clearing access, dredging, piling, well re-entry, and production equipment.
(iv) Working capital and contingency - c. $5 million.
The above use of proceeds assumes the larger quantum fundraise of c.$19.5 million. In the event of the lower quantum fundraise, the Company would seek to establish greater levels of cash, including from operations, before likely commencing operations at Gbetiokun-1 in late 2017.
Further details of the timing of the Company's work programme will be provided in the results of the Placing announcement.
Details of the Placing
The Placing will be managed on the Company's behalf by Panmure Gordon, Canaccord and Pareto (the "Brokers"). The Placing is not being underwritten and the Company reserves the right to issue and sell a lesser number of shares through the Placing and to settle certain of the Placing Shares by way of a direct subscription with the Company. The Placing will be conducted in accordance with the terms and conditions set out in the Appendix. The bookbuilding process (the "Bookbuilding Process"), to determine demand for participation in the Placing and to establish a single price (the "Placing Price"), will commence with immediate effect and the books are expected to close no later than 07.00 UK time on 8 June 2017, but Panmure Gordon (in consultation with Canaccord and Pareto) reserves the right to close the books earlier, without further notice.
The timing of the closing of the book is at the absolute discretion of Panmure Gordon and the Company, in consultation with Canaccord and Pareto. The Placing Price, the number of Placing Shares and allocations will be determined by the Company (in consultation with Panmure Gordon, Pareto Securities and Canaccord) following the close of the Bookbuilding Process. A further announcement will then be made detailing the Placing Price at which the Placing Shares are being placed (the "Pricing Announcement"). The Placing Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing voting ordinary shares of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares.
As detailed in the Appendix, the Placing is conditional upon, inter alia, admission of the Placing Shares to trading on AIM becoming effective ("Admission") and the placing agreement between the Company, Panmure Gordon, Canaccord and Pareto not being terminated prior to Admission.
It is expected that Admission will become effective and that dealings in the Placing Shares will commence on 14 June 2017.
This announcement should be read in its entirety. In particular, your attention is drawn to the "Important Notices" section of this announcement, to the detailed terms and conditions of the Placing and further information relating to the bookbuild described in the Appendix. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement in its entirety and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties, acknowledgements and undertakings contained in the Appendix.
Market Abuse Regulation
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of Article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.
For further information:
Eland Oil & Gas PLC (+44 (0)1224 737300)
www.elandoilandgas.com
George Maxwell, CEO
Edward Cozens, GM Commercial
Canaccord Genuity Limited (nominated adviser and joint broker) (+44 (0)20 7523 8000)
Henry Fitzgerald O'Connor
James Asensio
Panmure Gordon (UK) Limited (Lead Bookrunner and Joint broker) (+44 (0)20 7886 2500)
Adam James / Atholl Tweedie
Contacts for the Bookbuild:
Jamie Campbell (Specialist Sales): +44 (0)20 7886 2736
Tom Salvesen (Corporate Broking): +44 (0)20 7886 2904
Pareto Securities (Joint Bookrunner) (+44 (0) 20 7786 4398)
Davide Finelli (Corporate Finance) +44 (0) 20 7786 4398
Equity Sales Desk +47 22 87 87 50
In accordance with the guidelines of the AIM Market of the London Stock Exchange, John Downey, a geologist and Eland's Chief Technical Officer, who has a BSc from Nottingham University, an MSc from Leeds University and has over 30 years of relevant experience in the upstream oil and gas industry and who is a member of the Society of Petroleum Engineers and meets the criteria of qualified person under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.
In compiling the announcement the Company has used the definitions and guidelines as set forth in the 2007 Petroleum Resources Management System ('PRMS') approved by the Society of Petroleum Engineers (SPE)
IMPORTANT NOTICES
THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION IN WHICH SUCH AN OFFER WOULD BE UNLAWFUL. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT"), OR THE LAWS OF ANY STATE OF THE UNITED STATES OR ANY JURISDICTION THEREOF, AND MAY NOT BE OFFERED, SOLD, RE-SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, ABSENT REGISTRATION OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES.
The distribution of this announcement and the Placing of the Placing Shares as set out in this announcement in certain jurisdictions may be restricted by law. No action has been taken that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This communication does not constitute an offer of securities to the public in the United States, the United Kingdom or in any other jurisdiction. There will be no public offer of securities in the United States, United Kingdom or in any other jurisdiction. This communication is directed only at persons (i) having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) who are high net worth companies, unincorporated associations and other persons to whom it may lawfully be communicated in accordance with Article 49(2)(a) to (d) of the Order, or (iii) other persons to whom it may lawfully be communicated (all such persons together being referred to as "relevant persons"). Any investment activity in connection with the Placing will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents.
In member states of the European Economic Area, this announcement is only addressed to and directed at persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State).
This communication does not constitute or form a part of any offer or solicitation or advertisement of an offer to purchase and/or subscribe for shares in South Africa, including an offer to the public for the sale of, or subscription for, or the solicitation of an offer to buy and/or subscribe for, shares as defined in the South African Companies Act, No. 71 of 2008 (as amended) or otherwise (the "Companies Act") and will not be distributed to any person in South Africa in any manner that could be construed as an offer to the public in terms of the Companies Act.
This announcement includes statements that are, or may be deemed to be, "forward-looking statements", including within the meaning of Section 27A of the US Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934. These forward-looking statements are based on the Company's current expectations and projections about future events and can be identified by the use of a date in the future or forward-looking terminology, including, but not limited to, the terms "may", "believes", "estimates", "plans", "aims", "targets", "projects", "anticipates", "expects", "intends", "will", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations. They are not guarantees of future performance. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. Any forward-looking statements in this announcement reflect the Company's view with respect to future events as at the date of this announcement and are subject to risks relating to future events and the Company's operations, results of operations, financial condition, growth, strategy, liquidity and the industry in which the Company operates. No assurances can be given that the forward-looking statements in this announcement will be realised. Neither the Company, Panmure Gordon, Canaccord nor Pareto undertake any obligation nor do they intend to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement (except, in the case of the Company, to the extent required by the Financial Conduct Authority (the "FCA"), the London Stock Exchange or by applicable law, the AIM Rules or the Disclosure Rules and Transparency Rules). None of the future projections, expectations, estimates or prospects in this announcement should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the announcement. As a result of these risks, uncertainties and assumptions, prospective investors should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise. The Company undertakes no obligation to update the forward-looking statements in this announcement or any other forward-looking statements it may make. Forward-looking statements in this announcement are current only as of the date on which such statements are made.
This announcement (including the Appendix) has been issued by, and is the sole responsibility of, the Company. This announcement is for information only and does not constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction in which such an offer or solicitation is unlawful, including without limitation, the United States, Australia, Canada, Japan, Jersey or South Africa. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Persons needing advice should consult an independent financial adviser.
None of Panmure Gordon, Canaccord and Pareto, nor any of their respective affiliates, parent undertakings, subsidiary undertakings or subsidiaries of their parent undertakings nor any of their respective directors, officers, employees or advisers nor any other person accepts any responsibility whatsoever and makes no representation or warranty, express or implied, for or in respect of the contents of this announcement and, without prejudice to the generality of the foregoing, no responsibility or liability is accepted by any of them for any such information or opinions or for any errors or omissions.
Panmure Gordon, which is regulated by the FCA in the United Kingdom is acting solely for the Company in relation to the Placing and nobody else and will not be responsible to anyone other than the Company for providing the protections afforded to the clients of Panmure Gordon nor for providing advice in relation to the Placing or any other matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed upon Panmure Gordon by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Panmure Gordon does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Placing Shares or the Placing and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Panmure Gordon accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this announcement or any such statement.
Canaccord, which is regulated by the FCA in the United Kingdom is acting solely for the Company in relation to the Placing and nobody else and will not be responsible to anyone other than the Company for providing the protections afforded to the clients of Canaccord nor for providing advice in relation to the Placing or any other matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed upon Canaccord by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Canaccord does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Placing Shares or the Placing and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Canaccord accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this announcement or any such statement.
Pareto, which is regulated by the FCA in the United Kingdom is acting solely for the Company in relation to the Placing and nobody else and will not be responsible to anyone other than the Company for providing the protections afforded to the clients of Pareto nor for providing advice in relation to the Placing or any other matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed upon Pareto by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Pareto does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Placing Shares or the Placing and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Pareto accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this announcement or any such statement.
Any indication in this announcement of the price at which Placing Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company. The price of Placing Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Placing Shares.
Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this announcement.
APPENDIX: TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT, IS RESTRICTED, AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, JAPAN, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS APPENDIX CONTAINS IMPORTANT INFORMATION FOR PLACEES (AS DEFINED BELOW). MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY, AND THE TERMS SET OUT HEREIN ARE DIRECTED ONLY AT PERSONS: (A) WHO IF IN THE UNITED KINGDOM, HAVE BEEN SELECTED BY THE BROKERS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19 (5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (AS AMENDED) (THE "ORDER") OR ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER; (B) WHO, IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, ARE "QUALIFIED INVESTORS" (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC OF THE EUROPEAN PARLIAMENT AND THE COUNCIL OF 4 NOVEMBER 2003 (TOGETHER WITH ANY IMPLEMENTING DIRECTIVE MEASURE IN SUCH MEMBER STATES, THE "PROSPECTUS DIRECTIVE")); (C) WHO, IF IN THE REPUBLIC OF SOUTH AFRICA, ARE PERSONS WHO FALL WITHIN THE SPECIFIED CATEGORIES LISTED IN SECTION 96(1)(a) OF THE SOUTH AFRICAN COMPANIES ACT 71 OF 2008 (AS AMENDED); (D) WHO ARE OTHERWISE PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO SUCH PERSONS AND WILL BE ENGAGED IN ONLY WITH SUCH PERSONS.
If a person chooses to participate in the Placing by making or accepting an offer to acquire Placing Shares (each such person whose participation is accepted by the Brokers in accordance with this appendix being hereinafter referred to as a "Placee" and, together, as the "Placees") it will be deemed to represent and warrant that it has read and understood this announcement and this appendix in its entirety and to be making or accepting such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, agreements and undertakings, contained in this appendix.
The Placing Shares referred to in this announcement have not been, and will not be, registered under the US Securities Act or under the securities legislation of any state of the United States. Furthermore, the Placing Shares have not been recommended by any US federal or state securities commission or regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or confirmed the accuracy or determined the adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States. This appendix is not an offer of securities for sale in the United States, and the Placing Shares may not be offered or sold in the United States absent the registration of the Placing Shares under the US Securities Act, or an exemption therefrom, or in a transaction not subject to, the registration requirements of the US Securities Act. There will be no public offer of the Placing Shares in the United States.
The Placing Shares will not be lodged with or registered by the Australian Securities and Investments Commission and are not being offered for subscription or sale and may not be directly or indirectly offered, sold, taken up, transferred or delivered in or into Australia or to or for the account or benefit of any person or corporation in (or with a registered address in) Australia. The relevant clearances have not been, and will not be obtained from the Ministry of Finance of Japan and no circular in relation to the Placing Shares has been or will be lodged with or registered by the Ministry of Finance of Japan. The Placing Shares may not therefore be offered, taken up, transferred or sold, directly or indirectly, in or into Japan, its territories and possessions and any areas subject to its jurisdiction or to any resident of Japan. The Placing Shares may not be offered, taken up, transferred or sold directly or indirectly in or into Canada or to a resident of Canada.
In South Africa, neither this announcement nor the Placing constitutes, nor is intended to constitute, an "offer to the public" (as such expression is defined in the South African Companies Act 71 of 2008 (as amended), the "South African Companies Act"). In South Africa this announcement is only being distributed to, and is only directed at, and any investment or investment activity to which this announcement relates is available only to, and will be engaged in only with, persons in South Africa who fall within the specified categories listed in section 96(1)(a) of the South African Companies Act. Accordingly: (i) this announcement does not, nor does it intend to, constitute a "registered prospectus", as contemplated by the South African Companies Act; and (iii) no prospectus has been filed with the South African Companies and Intellectual Property Commission in respect of the Placing.
This announcement and appendix do not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. The distribution of this announcement and the placing and issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Brokers that would permit an offering of such securities or possession or distribution of this announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purposes is required. Persons to whose attention this announcement has been drawn are required by the Company and the Brokers to inform themselves about and to observe any such restrictions.
The price of securities and the income from them may go down as well as up and investors may not get back the full amount of their investment on disposal of the securities.
Any indication in this announcement of the price at which Ordinary Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
The Placing Shares will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.
Persons (including, without limitation, nominees and trustee) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action.
Each Placee should consult with its own advisers as to legal, tax, business and related aspects of a purchase of Placing Shares.
Details of the Placing
1. | The Brokers will arrange the Placing as agents for and on behalf of the Company subject to and in accordance with the terms of a placing agreement entered into between the Brokers and the Company in connection with the Placing, dated 6 June 2017 (the "Placing Agreement"). Participation will only be available to persons invited to participate by the Brokers. The Company will, following consultation with the Brokers, determine in its absolute discretion the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee. Subject to the terms of the Placing Agreement, the Brokers may appoint sub-agents or delegate the exercise of any of its powers and authorities on behalf of the Company to procure subscribers for the Placing Shares. |
2. | The price payable per new Ordinary Share shall be such price as is determined by the Company in consultation with the Brokers (the "Placing Price"). |
3. | Following determination of the Placing Price, a Placee's commitment to subscribe for a fixed number of Placing Shares will be agreed with and confirmed to it orally by either Broker and a trade confirmation or contract note will be despatched as soon as possible after that or, at the sole discretion of the Brokers, a Placing Letter or a subscription letter will be despatched to the relevant Placee. The oral confirmation to the Placee by a Broker constitutes an irrevocable, legally binding contractual commitment to the Broker (as agent for the Company) to subscribe for the number of Placing Shares allocated to it on the terms set out in this appendix and in accordance with the Company's Articles of Association. |
4. | Commissions will not be paid to Placees in connection with the Placing. |
5. | Panmure Gordon and Canaccord have the right, inter alia, to terminate the Placing Agreement at any time prior to Admission if, inter alia, (i) there has been any material breach of the warranties, undertakings or other obligations on the part of the Company contained in the Placing Agreement or (ii) there occurs an event of force majeure. If the Placing Agreement is terminated prior to Admission, the Placing will lapse and the rights and obligations of all Placees hereunder shall cease and determine at such time and no claim can be made by any Placee in respect thereof. In such event, all monies (if any) paid by the Placees to the Brokers at such time for Placing Shares shall be returned to the Placees at their sole risk without any obligation on the part of the Company or the Brokers or any of their respective affiliates to account to the Placees for any interest earned on such funds. In addition, there are certain conditions included within the Placing Agreement including, inter alia (i) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement; and (ii) Admission taking place not later than 8.00am on 14 June 2017, or such later date as the Company and the Brokers may agree, being not later than 30 June 2017. The Placees acknowledge and agree that the Company and Panmure Gordon may, at their sole discretion, exercise their contractual rights to waive or to extend the time and/or date for fulfilment of any of the conditions in the Placing Agreement. Any such extension or waiver will not affect Placees' commitments. |
6. | The Brokers are acting exclusively for the Company and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of the Brokers or for providing advice in relation to the matters described in this announcement. To the fullest extent permissible by law, none of the Company, the Brokers or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise) in respect of these terms and conditions. In particular, none of the Company or the Brokers, or any of their respective affiliates, shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Brokers' conduct of the Placing. Neither the Company nor the Brokers shall have any liability to any Placee nor shall they owe any Placee fiduciary duties in respect of any claim they may have under the Placing Agreement (or to any other person whether acting on behalf of a Placee or otherwise) in respect of the exercise of their contractual rights to waive or to extend the time and/or date for the satisfaction of any condition in the Placing Agreement or in respect of termination of the Placing Agreement or in respect of the Placing generally. |
7. | Each Placee acknowledges to, and agrees with, the Brokers (in their own capacity and as agents of the Company), that except in relation to the information in this announcement, it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. |
8. | Settlement of transactions in the Placing Shares following Admission will take place within CREST, subject to certain exceptions. The Brokers reserve the right to require settlement for and delivery of the Placing Shares to the Placees in such other means that it deems necessary if delivery or settlement is not possible within CREST within the timetable set out in this announcement or would not be consistent with the regulatory requirements in the jurisdictions of such Placees. |
9. | It is expected that settlement of the Placing Shares will occur on 14 June 2017, on which date each Placee must settle the full amount owed by it in respect of the Placing Shares allocated to it. The Brokers may (after consultation with the Company) specify later settlement dates at their absolute discretion. Payment must be made in cleared funds. The payment instructions for settlement in CREST and settlement outside of CREST will be notified to each Placee by the Brokers. The trade date of the Placing Shares is 8 June 2017. Interest is chargeable daily on payments to the extent that value is received after the due date at the rate per annum of 4 percentage points above the base lending rate of the Bank of England from time to time. If a Placee does not comply with these obligations, the Brokers may sell the Placing Shares allocated to such Placee (as agent for such Placee) and retain from the proceeds, for its own account, an amount equal to the Placing Price plus any interest due. The relevant Placee will, however, remain liable, inter alia, for any shortfall below the Placing Price and it may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of its Placing Shares on its behalf. Time shall be of the essence as regards the obligations of Placees to settle payment for the Placing Shares and to comply with their other obligations under this appendix. |
10. | If Placing Shares are to be delivered to a custodian or settlement agent of a Placee, the relevant Placee should ensure that its trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are to be registered in the name of a Placee or that of its nominee or in the name of any person for whom the Placee is contracting as agent or that of a nominee for such person, such Placing Shares will, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees should match the CREST details as soon as possible or if using a settlement agent they should instruct their agent to do so. Failure to do so could result in a CREST Settlement fine. |
Representations, warranties and further terms
By participating in the Placing, each Placee (and any persons acting on its behalf):
1. | represents and warrants that it has read this Announcement in its entirety and acknowledges that its participation in the Placing will be governed by the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings of this announcement (including this appendix); |
2. | acknowledges that no offering document or prospectus has been or will be prepared in connection with the Placing and that it has not received a prospectus or other offering document in connection therewith; |
3. | acknowledges that the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules (collectively "Exchange Information"), which includes the Company's most recent balance sheet and profit and loss account and the Company's announcements and circulars published in the past 12 months and that it is able to obtain or access such information without undue difficulty; |
4. | represents, warrants and undertakes that it will subscribe for the Placing Shares allocated to it in the Placing and pay for the same in accordance with the terms of this appendix failing which the relevant Placing Shares may be placed with other subscribers or sold as the Brokers determine and without liability to such Placee; |
5. | confirms the Brokers' absolute discretion with regard to the Placing Agreement and agrees that neither Broker owes it no fiduciary duties in respect of any claim it may have relating to the Placing; |
6. | undertakes and acknowledges that its obligations under the Placing are legally binding and irrevocable; |
7. | represents and warrants that it is entitled to subscribe for Placing Shares under the laws and regulations of all relevant jurisdictions which apply to it and that it has fully observed and complied with such laws and obtained all such governmental and other guarantees and other consents which may be required thereunder and complied with all necessary formalities; |
8. | represents and warrants that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing; |
9. | acknowledges that it is not entitled to rely on any information (including, without limitation, any information contained in any management presentation given in relation to the Placing) other than that contained in this announcement (including this appendix) and represents and warrants that it has not relied on any representations relating to the Placing, the Placing Shares or the Company other than the information contained in this announcement; |
10. | acknowledges that neither the Brokers nor the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company other than this announcement; nor has it requested the Brokers, the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such material; |
11. | represents and warrants that the issue to the Placee, or the person specified by such Placee for registration as holder of Placing Shares, will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services); |
12. | represents and warrants that it is aware of and has complied with its obligations in connection with money laundering under the Criminal Justice Act 1993 and Part VIII of FSMA, Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if it is making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it and that the applicable procedures have been carried out to verify the identity of the third party as required by the Regulations and that it has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Brokers such evidence, if any, as to the identity or location or legal status of any person which the Brokers may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Brokers on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Brokers may decide at their sole discretion; |
13. | if in the United Kingdom, represents and warrants that it is a person falling within Article 19(5) or Article 49(2)(a) to (d) of the Order and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; |
14. | if in the Republic of South Africa, represents and warrants that it is person falling within the specified categories listed in section 96(1)(a) of the South African Companies Act;
|
15.
16. | if in Norway, it is a "professional investor" pursuant to the Norwegian Securities Trading Act and ancillary regulations. represents and warrants that is has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person; |
17. | represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom; |
18. | if in a Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), the relevant Placee represents and warrants that: (a) it is a legal entity which is authorised or regulated to operate in the financial markets or, if not so authorised or regulated, its corporate purpose is solely to invest in securities; or (b) it is a legal entity which has two or more of: (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000; and (iii) an annual turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or (c) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (a) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors (as defined in the Prospectus Directive) or in circumstances in which the prior consent of the Brokers has been given to the offer or resale; or (b) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; or (d) such securities are sold in any other circumstance which does not require the publication of a prospectus by the Company pursuant to Article 3 of the Prospectus Directive; or (e) it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion, and that, unless otherwise agreed with the Company, it (and any such account) is subscribing for the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the US Securities Act); |
19. | represents and warrants that its obligations under the Placing are valid, binding and enforceable and that it has all necessary capacity and authority, and has obtained all necessary consents and authorities to enable it to commit to participation in the Placing and to perform its obligations in relation thereto and will honour its obligations (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement); |
20. | where it is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this appendix and the announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by the Brokers; |
21. | acknowledges that the Brokers are acting solely for the Company and that its participation in the Placing is on the basis that it is not and will not be a client or customer of either Broker or any of their affiliates and that neither Broker nor their affiliates have any duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of the Brokers' rights and obligations thereunder, including any right to waive or vary conditions or exercise any termination right; |
22. | undertakes and agrees that (i) the person whom it specifies for registration as holder of the Placing Shares will be (a) the Placee or (b) a nominee of the Placee, (ii) neither the Brokers nor the Company or any of their respective affiliates will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement and (iii) the Placee and any person acting on its behalf agrees to subscribe on the basis that the Placing Shares will be allotted to the CREST stock account of either Broker which will act as settlement agent in order to facilitate the settlement process; |
23. | acknowledges that any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract; |
24. | represents and warrants that, if it is in the United States or a US Person, it is a qualified institutional buyer, as defined in Rule 144A under the US Securities Act; |
25. | represents and warrants that it understands that the Placing and sale to it of the Placing Shares has not been and will not be registered under the US Securities Act or the laws of any state of the United States; it agrees that it will not offer, sell or pledge any Placing Shares in the United States unless and until the Placing Shares are registered under the US Securities Act (which it acknowledges the Company has no obligation to do) or unless the Placing Shares are offered, sold or pledged in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and the laws of any state of the United States; |
26. | acknowledges that it has not acquired the Placing Shares as a result of any general solicitation or general advertising (as these terms are used in Regulation D under the US Securities Act), including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio, Internet or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; |
27. | understands that if it is in the United States or a US Person and it decides to offer, sell or otherwise transfer any of the Placing Shares, such securities may be offered, sold or otherwise transferred only (i) to the Company, (ii) pursuant to an effective registration statement that covers resales of the securities, (iii) outside the United States in accordance with Rule 904 of Regulation S under the US Securities Act, or (iv) within the United States in a transaction that does not require registration under the US Securities Act (including, without limitation, pursuant to Rule 144 or Rule 144A) and in any case in accordance with any applicable securities laws of any state of the United States, and, with respect to clauses (iii) and (iv), the Placee has, prior to such offer, sale or transfer, furnished to the Company an opinion of counsel or other evidence of exemption, in either case reasonably satisfactory to the Company; |
28. | understands that if it is in the United States or a US Person, the Placing Shares shall only be eligible for settlement through CREST if approved by the Company, and, if requested by the Company, the Placee provides a signed letter addressed to the Company, containing certain representations regarding compliance with US securities laws; |
29. | if it is in the United States or a US Person and holds the Placing Shares in certificated form, understands and acknowledges that upon the original issuance thereof, and until such time as the same is no longer required under applicable requirements of the US Securities Act or applicable state securities laws, certificates representing, documents or notation constituting the Placing Shares and all certificates or documents issued in exchange therefor or in substitution thereof, shall bear a legend substantially in the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT"). THESE SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT THAT COVERS RESALES OF SECURITIES, (C) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE US SECURITIES ACT (INCLUDING WITHOUT LIMITATION RULE 144 OR 144A THEREUNDER) OR ANY APPLICABLE STATE SECURITIES LAWS, AND, WITH RESPECT TO CLAUSES (C) AND (D), THE HOLDER HAS, PRIOR TO SUCH OFFER, SALE OR TRANSFER, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY."
If Placing Shares are being sold under Rule 904 of Regulation S under the US Securities Act, and provided that the Company is a "foreign issuer" within the meaning of Regulation S at the time of sale, the legend may be removed by providing a declaration to Computershare Investor Services plc, the Company's registrar (including any successor transfer agent, the "Registrar"), as the Company may prescribe from time to time and, if required by Registrar, subject to applicable law, the Company will use its reasonable endeavours to obtain an opinion or memorandum of US counsel (as required by the Registrar), addressed to the Registrar permitting removal of resale restrictions for resales of Placing Shares by investors in the United States through the facilities of the London Stock Exchange in reliance upon Rule 904 of Regulation S under the US Securities Act; |
30. | consents to the Company making a notation on its records or giving instructions to any registrar and transfer agent of the Shares in order to implement the restrictions on transfer set forth and described above; |
31. | if required by applicable securities laws or as otherwise reasonably requested by the Company, will execute, deliver and file and otherwise assist the Company in filing reports, questionnaires, undertakings and other documents with respect to the issue of the Placing Shares; |
32. | understands and agrees that there may be material tax consequences to it of an acquisition or disposition of any of the Placing Shares. Neither the Company nor either Broker gives any opinion or makes any representation with respect to the tax consequences to the Placee under United States, state, local or foreign tax law of the Placee's acquisition or disposition of such securities. In particular, no determination has been made whether the Company will be a "passive foreign investment company" ("PFIC") within the meaning of Section 1291 of the United States Internal Revenue Code; |
33. | represents and warrants that it is purchasing the Placing Shares for its account or for the account of one or more persons for investment purposes only and not with the purpose of, or with a view to, the resale, transfer or distribution or granting, issuing or transferring of interests in, or options over, the Placing Shares and, in particular, neither the Placee nor any other person for whose account it is purchasing the Placing Shares has any intention to distribute either directly or indirectly any of the Placing Shares in the United States; |
34. | represents and warrants that it has such knowledge and experience in financial and business matters and expertise in assessing credit and all other relevant risks that it is capable of evaluating independently, and has evaluated independently and conducted an in-depth detailed analysis on, the merits and risks of a purchase of the Placing Shares for itself and each other person, if any, for whose account it is acquiring any Placing Shares, and it has determined that the Placing Shares are a suitable investment for itself and each other person, if any, for whose account it is acquiring any Placing Shares, both in the nature and the number of the Placing Shares being acquired; |
35. | represents and warrants that it has been independently advised as to any resale restrictions under applicable securities laws in its own jurisdiction; |
36. | acknowledges and agrees that the relevant clearances have not been and will not be obtained from the securities commission of any province of Canada and that the Placing Shares have not been and will not be registered under the relevant securities laws of any of Australia, Japan or any state or territory within any such country and, subject to certain limited exceptions, may not be, directly or indirectly, offered, sold, renounced, transferred, taken-up or delivered in, into or within those jurisdictions; |
37. | acknowledges that it and, if different, the beneficial owner of the Placing Shares is not, and at the time the Placing Shares are acquired will not be residents of Australia, Canada or Japan; |
38. | save where it has provided evidence to the satisfaction of the Brokers that it meets the requirements of qualified institutional buyers, as defined in Rule 144A under the US Securities Act, it represents, warrants and acknowledges to the Brokers that it is outside the United States and will only offer and sell the Placing Shares outside the United States in offshore transactions in accordance with Regulation S under the US Securities Act; and |
39. | acknowledges that it will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares. |
The acknowledgements, undertakings, representations and warranties referred to above are given to the Company and each of the Brokers (for their own benefit and, where relevant, the benefit of their respective affiliates) and are irrevocable. The Company and the Brokers will rely upon the truth and accuracy of the foregoing acknowledgements, undertakings, representations and warranties.
DEFINITIONS AND GLOSSARY OF DEFINED TERMS
In addition to the terms previously defined, the following definitions apply throughout this announcement unless the context otherwise requires:
"Admission" | the admission to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules for Companies |
"AIM" | the AIM market of the London Stock Exchange |
"AIM Rules" | the AIM Rules for Companies issued by the London Stock Exchange |
"Brokers" | Panmure Gordon, Canaccord and Pareto |
"Canaccord" | Canaccord Genuity Limited |
"Company" | Eland Oil & Gas PLC |
"CREST" | the system enabling title to securities to be evidenced and transferred in dematerialised form operated by Euroclear UK & Ireland Limited |
"Disclosure Rules and Transparency Rules" | the disclosure rules and transparency rules made by the FCA pursuant to Part VI of FSMA, as amended from time to time |
"FCA" | the Financial Conduct Authority |
"FSMA" | the Financial Services and Markets Act 2000 (as amended) |
"London Stock Exchange" | London Stock Exchange plc |
"Ordinary Shares" | ordinary shares and non-voting ordinary shares of ten pence (£0.10) each in the capital of the Company |
"Panmure Gordon" | Panmure Gordon (UK) Limited |
"Pareto" | Pareto Securities Limited |
"Placing" | the placing by the Brokers of the Placing Shares on behalf of the Company pursuant to the Placing Agreement and subject to the terms and conditions set out or referred to in this announcement |
"Placing Shares" | the Firm Placing Shares and the Conditional Placing Shares |
"Placing Agreement" | the agreement entered into between the Brokers and the Company in connection with the Placing |
"UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland |
"US" or "United States" | United States of America, its territories and possessions, any State of the United States of America and the District of Columbia and all other areas subject to its jurisdiction |
"US Person" | has the meaning given in Regulation S under the US Securities Act |
"US Securities Act" | the US Securities Act of 1933, as amended |
GLOSSARY OF TECHNICAL TERMS AND DEFINITIONS
Glossary
US$ | United States Dollars |
% | Percent |
1C | Low estimate scenario of contingent resources |
2C | Best estimate scenario of contingent resources |
3C | High estimate scenario of contingent resources |
1P | Proved |
2P | Proved plus probable |
3P | Proven plus probable plus possible |
3D or 3D Seismic | Seismic data which is acquired in a multi-azimutual pattern and processed such that the signal-to-noise ratio is enhanced by three dimensional stacking of the reflections caused by subsurface interfaces between rocks with different acoustic properties |
bbl / bbls | barrel / barrels |
BOPD | Barrels of Oil Per Day |
Contingent Resources | Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources are a class of discovered Recoverable Resources. |
EPS | Early Production System |
FFD | Full Field Development |
Gbetiokun | Gbetiokun Field, OML 40 |
Gbetiokun CPR | The Gbetiokun reserves and resources evaluation provided by Netherland, Sewell & Associates Inc. as at 31 March 2016 |
MMB | Million barrels |
OML 17 | Oil Mining Lease 17 |
OML 40 | Oil Mining Lease 40 |
Proved Reserves ('Proved') | Those quantities of petroleum, which by analysis and geoscience, can be estimated with reasonable certainty to be commercially recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated Proved Reserves |
Probable Reserves ('Probable') | Those additional reserves that are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated proved plus Probable Reserves |
Possible Reserves ('Possible') | Those additional reserves which analysis and geoscience and engineering data suggest are less likely to be recovered than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of proved plus probable plus Possible Reserves |
PPT | Petroleum Profits Tax |
STOIIP | Stock Tank Oil Initially In Place |
Ubima | The Ubima Field, OML 17 |
Ubima CPR | The Ubima reserves and resources evaluation provided by AGR TRACS International Limited as at April 2016 |
Definitions
In addition to the terms previously defined, the following definitions apply throughout this announcement unless the context otherwise requires:
"Admission" | the admission to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules for Companies |
"AIM" | the AIM market of the London Stock Exchange |
"AIM Rules" | the AIM Rules for Companies issued by the London Stock Exchange |
"Brokers" | Panmure Gordon, Canaccord and Pareto |
"Canaccord" | Canaccord Genuity Limited |
"Company" | Eland Oil & Gas PLC |
"CREST" | the system enabling title to securities to be evidenced and transferred in dematerialised form operated by Euroclear UK & Ireland Limited |
"Disclosure Rules and Transparency Rules" | the disclosure rules and transparency rules made by the FCA pursuant to Part VI of FSMA, as amended from time to time |
"FCA" | the Financial Conduct Authority |
"FSMA" | the Financial Services and Markets Act 2000 (as amended) |
"London Stock Exchange" | London Stock Exchange plc
|
"Ordinary Shares" | ordinary shares and non-voting ordinary shares of ten pence (£0.10) each in the capital of the Company |
"Panmure Gordon" | Panmure Gordon (UK) Limited |
"Pareto" | Pareto Securities Limited |
"Placing" | the placing by the Brokers of the Placing Shares on behalf of the Company pursuant to the Placing Agreement and subject to the terms and conditions set out or referred to in this announcement |
"Placing Shares" | the new Ordinary Shares to be issued in connection with the Placing |
"Placing Agreement" | the agreement entered into between the Brokers and the Company in connection with the Placing |
"UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland |
"US" or "United States" | United States of America, its territories and possessions, any State of the United States of America and the District of Columbia and all other areas subject to its jurisdiction |
"US Person" | has the meaning given in Regulation S under the US Securities Act |
"US Securities Act" | the US Securities Act of 1933, as amended |