LEK.L Regulatory News (LEK)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT WOULD BE UNLAWFUL TO DO SO. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THE ANNOUNCEMENT 

28 October 2015

Lekoil Limited

("Lekoil" or the "Company")

Completed placing of new Ordinary Shares at 24 pence per share

to raise approximately US$46 million (approximately £30 million)

Lekoil (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, announces, further to the announcement made yesterday evening, that it has entered into a placing agreement (the "Placing Agreement") with Mirabaud Securities LLP ("Mirabaud") and BMO Capital Markets ("BMO") and has conditionally raised, in aggregate, gross proceeds of approximately US$46 million (approximately £30 million) through the placing of, in aggregate, 125,200,000 new Ordinary Shares at a placing price of 24 pence per Ordinary Share (the "Placing Price") with certain existing and new institutional and other investors via an accelerated bookbuild (the "Placing").

The net proceeds of the Placing are estimated to be US$44.3 million (approximately £28.9 million) and will be used to fund the acquisition of an indirect controlling interest in OPL 325, (located to the south of OPL 310 in the Dahomey Basin) offshore Nigeria as well as for other corporate uses and for general working capital purposes, including the payment of fees associated with the Placing.

The Placing, which has been conducted by Mirabaud as sole bookrunner and by BMO as Joint Lead Broker, Ladenburg Thalmann & Co. Inc. ("Ladenburg Thalmann"), acting as US Placing Agent, and Rand Merchant Bank, acting as South African Placing Agent, pursuant to the terms and conditions as set out in the Appendix to yesterday's announcement, is conditional, inter alia, on Admission.

The Placing will be conducted in two stages, with 37,000,000 First Placing Shares being placed using the Directors' existing authority to allot shares for cash on a non pre-emptive basis, as granted at Lekoil's most recent AGM, and the Second Placing Shares being placed conditionally upon, inter alia, the passing of the Resolutions at the Extraordinary General Meeting to be held on 16 November 2015. A circular convening the Extraordinary General Meeting (Circular) will be sent to shareholders shortly.

Application will be made for the First Placing Shares and the Second Placing Shares to be admitted to trading on AIM and it is currently expected that trading in the First Placing Shares and, subject to the passing of the Resolutions, the Second Placing Shares, will commence on 2 November 2015 and 18 November 2015 respectively.

Following admission to trading of the First Placing Shares, the Company will have 399,999,893 Ordinary Shares in issue. Subject to approval at the EGM, following the issue of the Second Placing Shares, the Company will have 488,199,893 Ordinary Shares in issue.

Unless otherwise defined herein, terms are as defined in the announcement made by the Company yesterday evening.

For further information, please visit www.lekoil.com or contact:

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and neither the Company nor BMO Capital Markets nor Mirabaud assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

The past performance of the Company and its securities is not, and should not be relied on as, a guide to future performance of the Company and its securities.

The material in this Announcement is for informational purposes only and does not constitute an offer of securities for sale in the United States or any other jurisdiction in which such an offer or solicitation is unlawful. The Company's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act), or the laws of any state, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state laws. No public offering of securities will be made in the United States.

THIS ANNOUNCEMENT, INCLUDING THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) COMES ARE REQUIRED BY THE COMPANY, MIRABAUD AND BMO CAPITAL MARKETS TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE ONLY ADDRESSED TO AND DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE PROSPECTUS DIRECTIVE); AND (B) IN THE UNITED KINGDOM, TO QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE ORDER); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THE PLACING SHARES ARE ONLY AVAILABLE TO RELEVANT PERSONS. NEITHER THE ANNOUNCEMENT NOR THESE TERMS AND CONDITIONS MAY BE ACTED UPON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY RECIPIENT OF THIS ANNOUNCEMENT WHO IS NOT A RELEVANT PERSON SHOULD TAKE NO OTHER ACTION.

Each of BMO Capital Markets Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, and Mirabaud Securities LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company and no one else in connection with the Transaction and will not be responsible or liable to anyone other than the Company for providing the protections afforded to its respective clients.

Ladenburg Thalmann, a broker-dealer registered with and regulated by the U.S. Securities and Exchange Commission (the SEC) and the U.S. Financial Industry Regulatory Authority (FINRA), is acting as placement agent in the United States for the Placing Shares. Ladenburg Thalmann (i) was not requested to (and did not) verify or confirm any statement contained in the document relating to the past or future financial performance, financials, operations or activities of the Company or its affiliates, the Company's products or any market information; (ii) did not conduct any investigation with respect to such information; and (iii) cannot guarantee the accuracy of such information.

The distribution of this Announcement and the Placing in certain jurisdictions may be restricted by law. No action has been taken by the Company, BMO Capital Markets or Mirabaud or by any of their respective affiliates or agents or brokers that would permit the Placing or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement becomes available are required by the Company, BMO Capital Markets or Mirabaud to inform themselves about, and to observe, such restrictions.

Neither the content of websites referred to in this Announcement, nor any hyperlinks on such websites is incorporated in, or forms part of, this Announcement.

Details of the Placing

The Company has conditionally placed the Placing Shares using the Directors' existing authority to allot shares for cash on a non pre-emptive basis as granted at Lekoil's most recent AGM held on 26 June 2015. The placing of the First Placing Shares is expected to raise, in aggregate, approximately gross proceeds of US$13.6 million (approximately £8.8 million) and is conditional only on Admission, which is currently expected to occur at at 8.00 a.m. on 2 November 2015. Following Admission, the First Placing Shares will represent approximately 9.3 per cent. of the Company's then enlarged issued ordinary share capital, and holders thereof will be eligible to vote on the Resolutions.

In addition, the Company has conditionally placed the Second Placing Shares. As the Company will have utilised all of the Directors' existing authorities to allot shares for cash on a non pre-emptive basis following Admission of the First Placing Shares, the Proposed Placing of the Second Placing Shares to raise, in aggregate, approximately a further US$32.4 million (approximately £21.2 million) gross is conditional upon, inter alia, the passing of the Resolutions at the Extraordinary General Meeting and Admission occurring on or before 18 November 2015 (or such later date as the Company, Mirabaud and BMO may agree, but in any event not later than 8.00 a.m. on 14 December 2015). Following their Admission, the Second Placing Shares will represent approximately 18.1 per cent. of the Company's then enlarged issued ordinary share capital. The Placing Shares will be fully paid and will rank pari passu in all respects with the Company's existing Ordinary Shares.

The Placing Price represents a discount of approximately 4 per cent. to the closing middle market price of 25 pence per Ordinary Share on 27 October 2015, being the last business day prior to the announcement of the Placing.

The Placing Shares have been conditionally placed by Mirabaud and BMO as agents of the Company, with certain existing and new institutional and other investors pursuant to the Placing Agreement. Under the terms of the Placing Agreement, Mirabaud and BMO will receive commission from the Company conditional on Admission and the Company will give customary warranties and undertakings to Mirabaud and BMO in relation, inter alia, to its business and the performance of its duties. In addition, the Company has agreed to indemnify Mirabaud and BMO in relation to certain liabilities that they may incur in undertaking the Placing. Mirabaud and BMO have the right (but after, where practicable, having consulted the Company) to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. The Placing is not being underwritten.

Applications will be made for the First Placing Shares and the Second Placing Shares to be admitted to trading on AIM and it is currently expected that trading in the First Placing Shares and the Second Placing Shares will commence on 2 November 2015 and 18 November 2015, respectively.

Disapplication of pre-emption rights and share capital authorities

As mentioned above, the Directors do not currently have sufficient authorities in place under the Articles to undertake the Proposed Placing of the Second Placing Shares. Therefore, the Directors will be seeking additional general authority and a specific disapplication of pre-emption rights set out in the Articles to allot up to 120,000,000 new Ordinary Shares to allow the Proposed Placing of the Second Placing Shares to proceed.

In addition, the Directors will be seeking further authority to allot new Ordinary Shares (which will represent approximately one third of the enlarged issued share capital following the Placing) together with an authority to disapply pre-emption rights in respect of the new Ordinary Shares, subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or any legal or practical problems relating to such an allotment.

These existing and additional authorities will enable the Directors to carry out the Company's objectives and will ensure that the Company is in a position to pursue and take advantage of opportunities as and when they arise. In particular, the proposed authorities are intended to provide the Directors with the flexibility to issue Ordinary Shares, and rights to subscribe for Ordinary Shares, as consideration to vendors of potentially attractive assets and/or to fund the cash consideration element of such potential acquisitions. The proposed authorities will also enable the Directors to raise additional working capital to fund potential future work programmes without having to incur the time delay and cost of convening a further general meeting.

Placing Statistics

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