4 Jan 2016 07:00
JKX OIL & GAS PLC
("JKX" or "the Company")
NOTICE OF GENERAL MEETING
AND TOTAL NUMBER OF SHARES AND VOTING RIGHTS
Notice of General Meeting
JKX Oil & Gas Plc is today posting to shareholders a circular containing a notice of an extraordinary general meeting to be held on 28 January 2016 requisitioned by Proxima Capital Group Inc. ("Proxima"). The resolutions proposed by Proxima are to remove seven out of nine directors from the Board of JKX and to appoint five of their own nominees as directors. In the circular JKX will detail the unanimous recommendation of the Board to vote against the Resolutions.
A full copy of the circular to shareholders will be posted on the JKX website at http://www.jkx.co.uk/investor-centre/investor-download-centre.aspx.
A summary of the Board's reasons for recommending shareholders to vote against the Resolutions is set out below:
1. The Board believes that Proxima's proposals are an attempt to seize control of JKX without making a bid for it and thereby avoiding offering a fair premium for it.
2. A wholesale change of existing JKX board members, including all four executives, would eliminate at a stroke extensive experience and corporate knowledge and memory. The Board considers that depriving the Company of this experience and knowledge in JKX's unique circumstances could result in substantial loss of value for shareholders. For example, it could severely prejudice the ability of JKX successfully to pursue a final award under its arbitration claim against Ukraine for the overpayment of production taxes; the total amount of this claim which is to be heard in July 2016 is in excess of US$270 million.
3. The Board considers that Proxima has not made its true intentions known to the Board despite being requested to do so. Accordingly, there is no available evidence that Proxima has a genuine plan or means to enhance value for other shareholders. It is untrue for Proxima to claim that it has been rebuffed by the Board. On the contrary if Proxima were to make constructive suggestions for the benefit of shareholders as a whole, the Board would take these into account, as it does for other shareholders.
4. Proxima is a recently formed Russian fund manager with no track record of managing companies in the oil and gas sector. The Board's view is that Proxima and its nominee directors lack requisite experience of operating in Ukraine; and that it would be very challenging for a Russian directed Board to operate JKX's business in Ukraine for so long as hostilities between Russia and Ukraine continue.
5. The performance of JKX under the existing Board's direction and control has been decisive and creditable against a backdrop of an aggressive fiscal and commercial regime in Ukraine, the sudden fall in worldwide oil and gas prices and dramatic weakening of Ukrainian and Russian currencies.
6. The Board has a clear strategy to maintain and enhance shareholder value. This strategy is demonstrating its robustness at a time of low oil and gas prices and geopolitical turbulence in JKX's major markets. Since the beginning of 2015, production has increased 35% to c. 11,500 boepd; total cash expenditure has been cut by 43% to c. US$52 million; and the share price has recovered from 12p to 27p.
The following documents are being mailed today, Thursday 31 December 2015, to the registered shareholders of JKX:
· Notice of the General Meeting to be held at 11 a.m. on 28 January 2016 at The Kings Fund, 11-13 Cavendish Square, London W1G 0AN; and
· Form of Proxy for the General Meeting.
The circular which includes the Notice of General Meeting is also available on the Company's website at http://www.jkx.co.uk/investor-centre/investor-download-centre.aspx.
A copy of each of these documents has been submitted to the Financial Conduct Authority and will be available for viewing shortly at the National Storage Mechanism www.morningstar.co.uk/uk/NSM.
Total Number of Shares and Voting Rights
As at the date of posting of the Notice of General Meeting of the Company to be held on 28 January 2016, the total number of shares in the Company was:
10p ordinary shares
Total number of shares 172,125,916
Each ordinary share carries the right to one vote at a general meeting of the Company and, therefore, excluding 402,771 ordinary shares held in treasury, the total number of voting rights in the Company at such time was 171,723,145.
Capita Company Secretarial Services Limited
Company Secretary
Enquiries
Cardew Group
Anthony Cardew 0207 930 0777 (Mobile 07770 720389)
Nadja Vetter 0207 930 0777 (Mobile 07941 340436)