HDY.L Regulatory News (HDY)

9 Feb 2006 07:01

Hardy Oil & Gas plc09 February 2006 For Immediate Release 9 February 2006 Hardy Oil and Gas plc ("Hardy" or the "Company") Placing of 5,204,660 New Ordinary Shares Hardy (AIM : HDY), the oil and gas exploration and production company withsignificant interests in India , today announces that the Company is raising£14.7m (before expenses) by way of a placing of 5,204,660 ordinary shares of$0.01 each ("Ordinary Shares") at a price of 283p per share (the "Placing").The Placing proceeds will be used to help fund the working capital requirementsof the Company, further details of which are set out below. Background Hardy floated on the AIM market of the London Stock Exchange in June 2005,raising £15m at a price per share of 144p. Developments post flotation • On 5 August 2005, Hardy announced that it had been awarded the KG-DWN-2003 /1 (D3) deepwater block with its partner in this block, Reliance Industries Limited ("Reliance"). Hardy has a 10 per cent. interest in this block and Reliance has 90 per cent. This area is widely regarded as one of the most exciting offshore exploration areas in India and was heavily contested in the recent bidding round. • On 21 October 2005, Hardy announced the successful acquisition of 3D seismic on CY-OS2 and PY-3. • On 20 December 2005, Hardy announced that it had entered into an agreement with a subsidiary of Sinvest ASA (the Deep Drilling Invest Group) for the drilling of two wells on the CY-OS2 block. • Hardy also has a 10 per cent. interest, with Reliance holding 90 per cent., in Block D9 in the Krishna Godavari Basin. The KG basin has produced two significant gas discoveries in the last three years in nearby blocks. About 4,000 Km2 of 3D seismic data has been acquired and is now in the final stages of processing. The 3D has confirmed the presence of 2 distinct, and extensive, four-way structural closures. The 3D has also revealed the presence of a number of seismic amplitude anomalies within these structure closures. Reasons for the Placing The Directors believe that the net proceeds of the Placing will enable theCompany to fund its projected exploration and appraisal programmes in India andalso in Nigeria. In common with the rest of the oil and gas exploration andproduction industry, Hardy is experiencing upward cost pressure on capitalequipment and services as activity levels world-wide respond to high oil and gasprices. Details of the Placing The Company has today entered into a placing agreement with Arden PartnersLimited ("Arden"), under which Arden has agreed to use its reasonable endeavoursto procure placees for 5,204,660 new Ordinary Shares ("Placing Shares") at aprice of 283p per share ("Placing Price"), or failing which, to subscribeitself, as principal, for such shares. The Placing Price represents a discountof 0.5 per cent. to the official closing market price of 284p of an existingOrdinary Share on 8 February 2006, being the latest practicable date prior tothe release of this announcement. The Placing Shares will represent 9.1 percent. of the Company's issued share capital immediately following completion ofthe Placing. The Placing Shares are being offered to certain institutional and otherinvestors (each a "Placee" and such offer a "Placing Participation") subject tothe terms and conditions set out in this announcement. Settlement and dealings Application will be made to the London Stock Exchange for the Placing Shares tobe admitted to trading on AIM ("Admission"). It is expected that Admission willoccur, and dealings in the Placing Shares begin, at 8.00a.m. on 15 February2006. The Placing Shares will, when issued, rank pari passu in all respects withthe existing Ordinary Shares in issue, including the right to receive anydividends and other distributions declared following Admission. Interest in Hindustan Oil Exploration Co. ("HOEC") Hardy continues to hold a strategic 8.5 per cent. shareholding in Hindustan OilExploration Co. (HOEC), which has its shares listed on two Indian StockExchanges and has a current market capitalisation of approximately US$220m.Hardy is engaged in arbitration proceedings with HOEC concerning various termsof a shareholders' agreement. A procedural hearing in this arbitration commencedin London on 6 February 2006 and a ruling on these matters is expected bymid-April. A hearing on various pre-emption right issues in these proceedings isdue to be heard in London later this year. Current trading and prospects Hardy's current trading is in line with the Directors' expectations and theyremain confident about the Company's prospects. The proposed exploration and drilling timetable is as follows: • GS-O1 Drill 2 exploration wells Q1/06 • CY-OS/2 Drill 2 exploration wells Q2/06 • D9 Drill 2-4 exploration wells Q3/06 • D3 3D seismic programme Q4/06 • Nigeria Various development activity Q2/06 Commenting on the Placing, Sastry Karra, Chief Executive, said: "We are delighted at this further support from investors, which will help usmove forward with the appraisals of our exciting opportunities, aligned with ourprofitable production activities in the PY-3 region". For further information please contact: Hardy Oil and Gas plc 020 7471 9850Sastry Karra, Chief Executive Yogeshwar Sharma, Managing Director Arden Partners Limited 020 7398 1632Richard Day Buchanan Communications 020 7466 5000Mark EdwardsBen Willey FURTHER TERMS OF THE PLACING In accepting a Placing Participation a Placee understands and accepts that theissue or transfer of Placing Shares to him/it (whether as principal, agent ornominee) will not be subject to stamp duty or stamp duty reserve tax at theincreased rates referred to in sections 67 or 93 (Depositary Receipts) orsections 70 or 96 (Clearance Services) of the Finance Act 1986. In accepting a Placing Participation a Placee irrevocably represents, warrantsand undertakes to Arden (on its own behalf and as agent of the Company) that: a) the Placee and/or each person on whose behalf he/it is participating (inwhole or in part) in the Placing or to whom he/it allocates his/its PlacingShares in whole or in part: i. has the capacity and authority and is entitled to enter into and perform his/its obligations as a subscriber or purchaser of Placing Shares and will honour such obligations; and ii.has fully observed all laws of relevant jurisdictions and obtained all necessary governmental or other consents in either case which may be required inrelation to the subscription or purchase by him/it of Placing Shares; b) the Placee is not a person who is resident in, or a citizen of, the UnitedStates, Canada, Australia, the Republic of Ireland or Japan (or an agent ornominee of such a person) or a corporation, partnership or other entityorganised under the laws of any such jurisdiction (or an agent or nominee ofsuch a person); c) the Placee is a person whose ordinary activities involve him/it in acquiring,holding, managing or disposing of investments (as principal or agent) for thepurposes of his/its business or that he/it will acquire, hold, manage anddispose of Placing Shares for the purposes of his/its business; d) in agreeing to subscribe for or purchase Placing Shares the Placee has notrelied on and is not relying on any information, representation or warrantyrelating to the Placing, Placing Shares or Company other than publicly availableinformation and has not relied on and is not relying on any representation orwarranty or agreement by Arden or any director, employee or agent or any otherperson except as set out in the express terms of this announcement; e) in accepting a Placing Participation the Placee is acting either as principalor an intermediate customer (as defined by the FSA) and for no other person andthat his/its acceptance of a Placing Participation will not give any otherperson a contractual right to require the issue by the Company of any of thePlacing Shares; f) irrevocably confirms Arden's discretion with regard to the Placing Agreementand agrees that Arden does not owe the Placee any fiduciary duties in respect ofany claim the Placee may have relating to the Placing; g) acknowledges and agrees that the Placing Shares have not been and will not beregistered under the United States Securities Act of 1933, as amended("Securities Act") or under the securities laws of any State of the UnitedStates, that the relevant clearances have not been and will not be obtained fromthe Securities Commission of any province of Canada and that the Placing Shareshave not been and will not be registered under the securities laws of Australia,the Republic of Ireland or Japan and, therefore, the Placing Shares may not be,subject to certain exceptions, directly or indirectly, offered or sold in theUnited States, Canada, Australia, the Republic of Ireland or Japan; h) acknowledges and agrees that neither the Placee nor any affiliate, nor anyperson acting on his/its or any affiliate's behalf, has or will offer, sell,take up, renounce, transfer or deliver directly or indirectly any Placing Shareswithin the United States, Canada, Australia, the Republic of Ireland or Japan oroffer, sell, take up, renounce, transfer or deliver in favour of a resident ofCanada, Australia, the Republic of Ireland or Japan; i) the Placee has not offered or sold and will not offer or sell any PlacingShares in the United Kingdom except to persons whose ordinary activities involvethem in acquiring, holding, managing or disposing of investments (either asprincipal or agent) for the purposes of their businesses or otherwise incircumstances which have not resulted and will not result in offers to thepublic in the United Kingdom within the meaning of Financial Service and MarketsAct 2000; j) acknowledges that the Placee has complied with all relevant laws of allterritories, or obtained all requisite governmental or other consents which maybe required in connection with its Placing Participation; that he/it hascomplied with all requisite formalities and that he/it has not taken any actionor omitted to take any action which will or may result in Arden or the Companyor any of their respective directors, officers, agents, employees or advisorsacting in breach of the legal and regulatory requirements of any territory inconnection with the Placing or his/its application and he/it is not in aterritory in which it is unlawful to make an offer to subscribe for or purchasePlacing Shares; k) acknowledges and agrees in connection with his/its Placing Participation thatArden is not acting for the Placee in relation to the Placing or otherwise andthat Arden will not have any duties or responsibilities to the Placee forproviding the protections afforded to its customers or for advising the Placeewith regard to the Placing or the Placing Shares; l) irrevocably appoints any director of Arden as its agent for the purpose ofexecuting and delivering to the Company and/or its registrars any documents onhis/its behalf necessary to enable the Placee to be registered as the holder ofany of the Placing Shares offered to the Placee; m) the Placee confirms that he/it has obtained all necessary consents andauthorities to enable him/it to give his/its commitment to subscribe for orpurchase Placing Shares; n) the Placee is not a person falling within subsections (6), (7) or (8) ofsections 67 or 70 or subsections (2) and (3) of section 93 or subsection (1) ofsection 96 of the Finance Act 1986 (or an agent or nominee of such person); o) the Placee has complied with the Money Laundering Regulations 2003("Regulations") and, if he/it is making payment on behalf of a third party, thePlacee has obtained and recorded satisfactory evidence to verify the identity ofthe third party as required by the Regulations. 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