FOGL.L Regulatory News (FOGL)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

23 October 2013

RECOMMENDED COMBINATION

of

DESIRE PETROLEUM PLC ("Desire")

with

FALKLAND OIL AND GAS LIMITED ("FOGL")

to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

Posting of Scheme Document

On 3 October 2013, the boards of FOGL and Desire announced that they had reached agreement on the terms of a recommended combination of FOGL with Desire, pursuant to which FOGL will acquire the entire issued and to be issued share capital of Desire (the "Combination"), to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme").

Desire is today posting a circular (the "Scheme Document") to the holders of Desire Shares, together with the associated Forms of Proxy. The Scheme Document convenes the Court Meeting and General Meeting and contains, amongst other things, the full terms and conditions of the Scheme, an Explanatory Statement pursuant to section 897 of the Companies Act 2006, an expected timetable of principal events and details of the actions to be taken by holders of Desire Shares.

The expected timetable of principal events is attached as an appendix to this announcement. If any of the key dates set out in the expected timetable change an announcement will be made via a Regulatory Information Service.

To become effective, the Scheme will need to be approved at the Court Meeting and will require the passing of a special resolution at the General Meeting, as described in the Scheme Document. The Scheme is also subject to the satisfaction or, if capable of waiver, waiver of the other conditions set out in Part 3 of the Scheme Document, including the receipt of any required approval from the Falkland Islands Government.

Notices for the Court Meeting and the General Meeting are set out in the Scheme Document. The Court Meeting and the General Meeting will both be held at the offices of Norton Rose Fulbright LLP, 3 More London Riverside, London SE1 2AQ on 15 November 2013. The Court Meeting will start at 11.00 a.m. and the General Meeting will start at 11.15 a.m. (or as soon thereafter as the Court Meeting has been concluded or adjourned).

Desire Share Scheme Participants will be sent further details of the impact (if any) of the Scheme on their options and proposals being made to them on the date of this announcement.

Holders of Desire Shares should carefully read the Scheme Document in its entirety before making a decision with respect to the Scheme.

The Scheme Document will today be made available on Desire's website at www.desireplc.co.uk and additional copies are available from Capita who can be contacted on 0871 664 0300 or, if calling from outside the UK +44 (0)20 8639 3399.

Terms and expressions used in this announcement shall, unless the context otherwise requires, have the same meanings as given to them in the Scheme Document.

The Combination will be made on the terms and subject to the conditions and further terms set out in the Scheme Document and Forms of Proxy.

Peel Hunt LLP, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for Desire and no one else in connection with the Combination and this announcement and will not be responsible to anyone other than Desire for providing the protections afforded to clients of Peel Hunt LLP nor for providing advice in connection with the Combination or any matter referred to herein.

RBC Europe Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for FOGL and no one else in connection with the Combination and will not be responsible to anyone other than FOGL for providing the protections afforded to clients of RBC Europe Limited, or for providing advice in connection with the Combination or any matters referred to herein.

Jefferies International Limited, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for FOGL and no one else in connection with the Combination and this announcement and will not be responsible to anyone other than FOGL for providing the protections afforded to clients of Jefferies nor for providing advice in connection with the Combination or any matter referred to herein.

Falkland Oil and Gas Limited reserves the right to elect, with the consent of the Panel (where necessary), to implement the Combination by way of a Takeover Offer. In such event, the Takeover Offer will be implemented on substantially the same terms, subject to appropriate amendments, as those which would apply to the Combination.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy securities, pursuant to the Combination or otherwise. The Combination will be made solely by means of the Scheme Document, which contains the full terms and conditions of the Combination, including details of how to vote in favour of the Scheme. Desire and FOGL urge Desire Shareholders to read the Scheme Document which is being distributed to Scheme Shareholders (with the exception of certain Scheme Shareholders in Restricted Jurisdictions), as it contains important information relating to the Combination.

This announcement does not constitute a prospectus or prospectus equivalent document.

This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Overseas shareholders

The release, publication or distribution of this announcement or the Scheme Document in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by FOGL or required by the City Code and permitted by applicable law and regulation, the Combination will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the Combination will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this announcement and all documentation relating to the Combination are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Combination (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Combination.

The availability of the Combination to Desire Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Further details in relation to overseas Desire Shareholders is contained in the Scheme Document.

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Information relating to Desire Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Desire Shareholders, persons with information rights and other relevant persons for the receipt of communications from Desire may be provided to FOGL during the Offer Period where requested under Section 4 of Appendix 4 of the Code.

Publication on website

A copy of this announcement will be made available, free of charge subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at www.fogl.com and www.desireplc.co.uk by no later than 12 noon (London time) on the business day following the date of this annoucement.

You may request a hard copy of this announcement, free of charge, by contacting Capita Registrars  on +44 (0) 871 664 0300.

Desire Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Combination should be in hard copy form.

APPENDIX

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

The following indicative timetable sets out the expected dates for implementation of the Combination.

(1) All references in this document to times are to London time, unless otherwise stated.

(2) It is requested that Blue Forms of Proxy for the Court Meeting be lodged by 11.00 a.m. on 13 November 2013 or, if the Court Meeting is adjourned, not later than 48 hours prior to the time appointed for the Court Meeting (excluding any part of such 48 hour period falling on a weekend or a public holiday in the UK unless otherwise announced). Blue Forms of Proxy not so lodged may be handed to the Company's Registrars (on behalf of the chairman of the Court Meeting) before the start of the Court Meeting and will still be valid.

(3) White Forms of Proxy for the Desire General Meeting must be lodged by 11.15 a.m. on 13 November 2013 or, if the Desire General Meeting is adjourned, not later than 48 hours prior to the time appointed for the Desire General Meeting (excluding any part of such 48 hour period falling on a weekend or a public holiday in the UK unless otherwise announced).

(4) If either the Court Meeting or the Desire General Meeting is adjourned, the Voting Record Time for the relevant adjourned meeting will be 6.00 p.m. on the day falling two Business Days before the date of the adjourned meeting.

(5) Or as soon thereafter as the Court Meeting shall have concluded or been adjourned.

(6) These dates are indicative only and will depend, among other things, on the date upon which the Court sanctions the Scheme and confirms the Capital Reduction and whether the Conditions are satisfied or waived.

To the extent any of the above expected dates or times change, Desire will give notice of any such changes and details of the revised dates and/or times to Desire Shareholders by issuing an announcement through a Regulatory Information Service.