PGR.L Regulatory News (PGR)

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.

3 August 2022

Phoenix Global Resources plc

("Phoenix" or the "Company")

Proposed cancellation of listings,

Exit Opportunity

and

Notice of General Meeting

Further to its announcement on 22 June 2022, Phoenix Global Resources plc (AIM: PGR; BCBA: PGR), the upstream oil and gas company, announces the proposed cancellation of admission of its Ordinary Shares to trading on AIM, delisting from public offer and trading in Argentina on the Buenos Aires Stock Exchange ("BASE") and cancellation of its secondary listing on BASE ("Cancellation") and a cash exit opportunity for shareholders.

The Company will be posting a circular to shareholders later today convening a general meeting of the Company at which a resolution will be proposed to shareholders to approve the Cancellation, together with resolutions in respect of the proposed re-registration of Phoenix as a private limited company and the consequential adoption of new articles of association, incorporating consequential changes to reflect the new legal nature of the Company.

The Circular will set out the background to, the reasons for and the implications of Cancellation and to explain why the Board considers the Cancellation, the re-registration and the adoption of the new articles to be in the best interests of Shareholders as a whole. Pursuant to Rule 41 of the AIM Rules for Companies, Cancellation is conditional upon the approval of not less than 75 per cent. of the votes cast by the Company's shareholders (whether in person or by proxy) at the General Meeting.

The general meeting will be held at 11.00 a.m. on 1 September 2022 at the Company's registered office, 1st Floor, 62 Buckingham Gate, London, SW1E 6AJ.

In connection with the Cancellation, the Circular also provides details of a cash exit opportunity for other shareholders in the Company ("Minority Shareholders") who may not wish to remain shareholders in the Company following the Cancellation (the "Exit Opportunity"). The Exit Opportunity is being provided by Mercuria Energy Group Limited, the 83.72 per cent. majority shareholder in the Company, ("Mercuria") and is not conditional upon Cancellation.

The terms of the Exit Opportunity are a purchase price of 7.5 pence per Ordinary Share in respect of Ordinary Shares listed on AIM and a purchase price of US$ 0.0916 per Ordinary Share (using the US$/GBP exchange rate at London market close on 2 August 2022) in respect of Ordinary Shares listed on BASE, which represents a 25 per cent. premium to the closing mid-market price per Ordinary Share on AIM on 21 June 2022 and an approximate 67 per cent. premium to the 30 day VWAP per Ordinary Share on AIM on 21 June 2022 (being the last practicable date prior to the publication of the announcement of 22 June 2022).

The Exit Opportunity shall remain open from 3 August 2022 until 1.00 p.m. on 7 September 2022 and any sale of Ordinary Shares by Minority Shareholders will be free of trading costs to the seller applied by Share Registrars Limited (the Receiving Agent for the Exit Opportunity), which will be borne by Mercuria.

A copy of the expected timetable and letter from the Non-Executive Chairman of the Company extracted from the Circular are set out below.

For further information, please contact:

About Phoenix

Phoenix Global Resources is an independent oil and gas exploration and production company focused on Argentina and listed on both the London Stock Exchange (AIM: PGR) and the Buenos Aires Stock Exchange (BCBA: PGR) and offers its investors an opportunity to invest directly into Argentina's Vaca Muerta shale formation and other unconventional resources. The Company has over 0.8 million licenced working interest acres in Argentina (of which approximately 0.7 million are operated), 71.1 million boe of working interest 2P reserves and average working interest production of 4,553 boepd in 2021. Phoenix has significant exposure to the unconventional opportunity in Argentina through its approximately 0.4 million working interest acres with Vaca Muerta and other unconventional potential.

The Company's website is www.phoenixglobalresources.com

This announcement is released by the Company and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR") as it forms part of UK domestic law by virtue of the EUWA ("UK MAR"), encompassing information relating to the Cancellation, the re-registration and the adoption of the new articles. For the purposes of UK MAR and Article 2 of the binding technical standards published by the Financial Conduct Authority in relation to MAR as regards Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Nigel Duxbury, Company Secretary.

Shore Capital and Corporate and Shore Capital Stockbrokers, which are authorised and regulated in the United Kingdom by the Financial Conduct Authority, are acting for the Company in connection with the Cancellation and are not acting for any other person nor will it otherwise be responsible to any person for providing the protections afforded to customers of Shore Capital, or for advising any other person in respect of the Cancellation.

Shore Capital and Corporate's responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or to any other person in respect of the Cancellation.

Panmure Gordon, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company in connection with the Cancellation and is not acting for any other person nor will it otherwise be responsible to any person for providing the protections afforded to customers of Panmure Gordon, or for advising any other person in respect of the Cancellation.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notes:

1. Each of the times and dates in the above timetable are subject to change. If any of the above times or dates change, the revised times or dates will be notified to Shareholders by means of an announcement made through a Regulatory Information Service (as defined in the AIM Rules). All references to times in announcement are to London times unless otherwise stated.

2. The Cancellation requires the approval of not less than 75 per cent. of the votes cast by Shareholders, whether voting in person or by proxy, at the General Meeting.

3. Re-registration requires the approval of not less than 75 per cent. of the votes cast by Shareholders, whether voting in person or by proxy, at the General Meeting.

LETTER FROM THE NON-EXECUTIVE CHAIRMAN

1. Introduction

On 22 June 2022 the Company announced it was in discussions with Mercuria, the Company's majority shareholder, in relation to the Company's potential delisting from trading on AIM and cancellation of its secondary listing on BASE, together with Mercuria providing Minority Shareholders with an exit opportunity. Earlier today, the Company announced the intended cancellation of admission of its Ordinary Shares to trading on AIM, delisting from public offer and trading in Argentina on BASE and cancellation of its secondary listing on BASE together with a proposed re-registration as a private limited company and details of an exit opportunity for Minority Shareholders, to be provided by Mercuria.

The Board believes that it is in the best interests of the Company to seek the Cancellation, Re-registration and, in agreeing to give their consent to Mercuria voting on the AIM Cancellation pursuant to the Relationship Agreement (as further detailed below), the Independent Directors consider it appropriate for Mercuria to provide Minority Shareholders with the Exit Opportunity. This letter sets out the reasons for, and implications of, the proposed Cancellation and Re-registration and provides further details on the expected process for the Cancellation, Re-registration and Exit Opportunity.

The Independent Directors for the purposes of the Relationship Agreement are Sir Michael Rake, John Bentley, Martin Bachmann and Tim Harrington. Nicolas Mallo Huergo is not considered an Independent Director by the Board for the purposes of the Relationship Agreement, which is based on the Board's determination of independence (under the UK Corporate Governance Code), as he is a board representative for certain Minority Shareholders. Magid Shenouda is not an Independent Director, as he is a board representative for Mercuria.

The Cancellation and Re-registration are conditional upon the respective Resolutions being passed at the General Meeting to be held at 11.00 a.m. on 1 September 2022, notice of which is set out at Part V of the Circular. Subject to the approval of the AIM Cancellation, the Company will take steps to cancel the admission of its Ordinary Shares to trading on AIM and to delist from public trading in Argentina on BASE and cancel its secondary listing on BASE, such that the Company will no longer be listed on any regulated exchanges. The Exit Opportunity is not conditional upon the approval of the Resolutions at the General Meeting and will be open for acceptance from 3 August 2022 until 1.00 p.m. on 7 September 2022.

The Relationship Agreement provides that the Independent Directors must give their consent in order for Mercuria to be permitted to vote its Ordinary Shares on the Resolution in respect of the AIM Cancellation. The Independent Directors have agreed to consent to Mercuria voting its Ordinary Shares on the Resolution in respect of the AIM Cancellation for the reasons set out in the Circular, including Mercuria agreeing to make available the Exit Opportunity now as described in Section 4 below and given that Mercuria may not offer an Exit Opportunity in the future. Mercuria has irrevocably undertaken to vote its Ordinary Shares in favour of the Resolutions, as further explained in Section 14 below.

2. Relationship with Mercuria

Mercuria is the major shareholder of the Company and its primary lender under the terms of a Bridging Facility and a Convertible Facility. The principal amount drawn down under the Mercuria Facilities is equal to US$390.5 million (as at 30 June 2022). The Bridging Facility provides for a repayment date (principal and interest) and maturity date of 31 December 2022. The Convertible Facility provides for an interest payment grace period from 1 January 2019 to 30 September 2022 with a first repayment and maturity date of 31 December 2022. Mercuria has the right to convert all or part of the outstanding principal of the Convertible Facility into additional new ordinary shares of the Company at prices which vary between £0.45, £0.28 and £0.23 per share. These conversion rights can be exercised at any time up to 10 business days prior to the maturity date. The maximum dilution in respect of the Company's issued share capital assuming full exercise of the Convertible Facility is 3.2 per cent. Whilst the Conversion Price remains significantly above the current market price, Mercuria is unlikely to exercise these rights under the Convertible Facility. If, however, the Company is unable to repay any of the Mercuria Facilities when they become due and payable, the Company may be forced to agree that Mercuria converts the Convertible Facilities at prices which are significantly below the current conversion prices, which will result in greater dilution than the maximum dilution stated above.

Save for the Mercuria Facilities, as at 30 June 2022, the Company currently has US$3.1 million of outstanding third-party debt obligations, by way of a loan agreement entered into with Banco de la Ciudad de Buenos Aires entered in 2017 and subsequently restructured and amended on 22 December 2020. It is expected that this loan will be repaid in full on 23 December 2022.

In its final results announcement for the financial year ended 31 December 2021, dated 27 May 2022, the Company announced that Mercuria had written to the Company stating its intention to continue to provide financial support to the Company, in order that it may continue to operate and service the Company's liabilities as they fall due in the period to 30 June 2023 and fund the planned work programs. Mercuria had also specifically agreed not to demand repayment of the existing loans (principal and interest) during this period. This letter, which by its nature is not legally binding, represents a letter of comfort stating Mercuria's intention, when the letter was provided, to continue to provide financial support until June 2023. With the existing maturity dates of each of the Mercuria Facilities being 31 December 2022, the Company and Mercuria will be required to reach agreement as to a restructure or extension of the Mercuria Facilities, in order to create legally binding obligations in respect of this intention.

Whilst it has taken more time than anticipated, the Company and Mercuria are still seeking to restructure the Mercuria Facilities. The Board still believes, if the Company remains listed on AIM with the Relationship Agreement in place and with a majority of Independent Directors on the Board, that it will be able to agree the renegotiation of the Mercuria Facilities and formalise an agreement for new funding and that the Group and Company can continue as a going concern for the foreseeable future. However, the Board recognises that if the Company is unable to restructure the existing loan agreements from Mercuria or obtain funding from alternative sources (at an equivalent amount and on materially the same terms) and financial support is not, therefore, available over the period to 30 June 2023, this gives rise to a material uncertainty that may cast significant doubt on the Group's and Company's ability to continue as a going concern. If the Company was unable to fund its licence commitments, among other things, and subject to the terms of respective licences, this could result in financial penalties and/or termination of licences.

Given the substantial shareholding held by Mercuria in the Company and the potential dilutive impact of the Convertible Facility, combined with the Argentina country risk, the Board considers it unlikely that the Company will be able to attract material new investment from third party equity investors (i.e. investors with no current connection to the Company). The Company has not as yet been successful in identifying alternative sources of capital of sufficient size and on acceptable terms to fund the Company's operations and capital expenditure programs and to fulfil its licence commitments. Potential investors have been approached by the Company in the past but were deterred by the early development stage of its assets and the Argentina country risk and its political and economic situation.

The Board has also considered the availability of third-party bank debt in the UK and Argentina to replace or reduce the dependence of the Company on Mercuria's ongoing financial support but have concluded that no such bank debt is presently available of sufficient size and on commercially reasonable and acceptable terms.

The Board considers that the Group is therefore currently almost exclusively dependent upon Mercuria's continued willingness to provide financial support to enable the Group to realise its business plan and exploration programs and satisfy the capital expenditure requirements which underpin this.

3. Other reasons for the Cancellation and Exit Opportunity

The Board has considered the Company's ongoing suitability and eligibility to remain traded on AIM, given its increasing dependence on Mercuria and the level of Mercuria's shareholding in the Company.

The Board has also considered the shareholding structure of the Company which is such that there is both a limited free float and limited liquidity in the Ordinary Shares, with the consequence that the AIM quotation does not offer investors the opportunity to trade in meaningful volumes or with frequency within an active market.

In addition, the Board notes that the Company's secondary listing on BASE is pursuant to a special regime granted by the CNV with specific reference to and reliance on the Company's compliance with the AIM Rules. Therefore, following the AIM Cancellation, the Company would not be able to maintain its secondary listing on BASE in its current form.

4. Minority Shareholders and the Exit Opportunity

As at the close of business on 1 August 2022 (being the latest practicable date prior to the publication of the Circular):

· Mercuria holds an interest in 2,332,816,686 Ordinary Shares representing 83.72 per cent. of the existing issued Ordinary Shares and voting rights in the Company; and

· the Minority Shareholders hold, in aggregate, 16.28 per cent. of the existing issued Ordinary Shares and voting rights in the Company.

Cancellation would materially affect the position of the Minority Shareholders in the Company. In particular, both the Board and Mercuria recognise that cancelling the trading of the Ordinary Shares on AIM and BASE will make it considerably more difficult for Shareholders to sell or buy Ordinary Shares should they wish to do so.

As Mercuria currently holds more than 50 per cent. of the Company's voting rights, it is able to acquire further interests in Ordinary Shares without incurring any obligation to make a general offer to all shareholders under Rule 9 of the Takeover Code. Mercuria has, therefore, agreed with the Independent Directors of the Company that, as part of the Independent Directors granting their consent to Mercuria voting on the Cancellation Resolution pursuant to the Relationship Agreement, Mercuria would provide the Exit Opportunity to Minority Shareholders, to enable Minority Shareholders to sell their Ordinary Shares in the Company to Mercuria, in advance of the Cancellation taking effect. Mercuria has not undertaken to provide a dealing facility or similar trading arrangement following the Cancellation.

The Independent Directors of the Company have provided their consent to Mercuria voting on the AIM Cancellation Resolution for the reasons set out in the Circular, including Mercuria agreeing to make available the Exit Opportunity now as described in this Section 4 and given the possibility that Mercuria may not offer an Exit Opportunity in the future. In reaching their conclusion to give their consent to Mercuria to vote on the AIM cancellation, the Independent Directors have considered the independent financial advice and the asset valuation reports prepared for the Independent Directors by independent financial advisers.

The terms of the Exit Opportunity are:

· a purchase price of 7.5 pence per Ordinary Share in respect of Ordinary Shares listed on AIM and a purchase price of US$ 0.0916 per Ordinary Share (using the US$/GBP exchange rate at London market close on 2 August 2022) in respect of Ordinary Shares listed on BASE, which represents:

o  a 25 per cent. premium to the closing mid-market price per Ordinary Share on AIM on 21 June 2022 (being the latest practicable date prior to the publication of the Announcement of discussions with Mercuria); and

o  an approximate 67 per cent. premium to the 30 day VWAP per Ordinary Share on AIM on 21 June 2022 (being the last practicable date prior to the Announcement of discussions with Mercuria);

· the Exit Opportunity shall remain open from 3 August 2022 until 1.00 p.m. on 7 September 2022; and

· any sale of Ordinary Shares by Minority Shareholders will be free of trading costs to the seller applied by the Receiving Agent, which will be borne by Mercuria.

Whilst Nicolas Mallo Huergo considers it appropriate for Mercuria to provide Minority Shareholders with an exit opportunity, he does not agree with the Exit Opportunity price as he considers that it undervalues the Company. Although the Independent Directors make no recommendation to Minority Shareholders in relation to their participation in the Exit Opportunity, they do not agree with Nicolas's view for the reasons set out in this announcement. Nicolas Mallo Huergo intends to sell all of his holding of Ordinary Shares through the Exit Opportunity.

Minority Shareholders who wish to sell their Ordinary Shares to Mercuria pursuant to the Exit Opportunity should refer to Section 5 below.

Minority Shareholders do not have to sell any Ordinary Shares pursuant to the Exit Opportunity if they do not wish to do so. However, Minority Shareholders who elect not to sell their Ordinary Shares pursuant to the Exit Opportunity or otherwise in the market by other means prior to the Cancellation will, on completion of the Cancellation and Re-registration, hold Ordinary Shares in a private limited company.

Furthermore, as set out in further detail in Section 10 below, following the AIM Cancellation:

· Mercuria has not agreed to provide any dealing facility for dealing in the Ordinary Shares and no price will be publicly quoted for the Ordinary Shares and so it will be significantly more difficult for Shareholders to sell their shares;

· the Relationship Agreement between the Company and Mercuria will terminate, with the effect that, inter alia, there shall be no ongoing contractual obligation upon Mercuria to ensure that the Company carries on its business independently of Mercuria;

· the Company will be a private limited company registered with the Registrar of Companies in England and Wales in accordance with and subject to the Companies Act 2006 and the New Articles;

· the Company will no longer be required to comply with the AIM Rules or CNV regulations (and accordingly, Shareholders will no longer be afforded the protections given by the AIM Rules and CNV regulations). Specifically, and among other things, there will be no obligation on the Company to include the information required under Rule 26 of the AIM Rules or to make announcements and/or update the website as required by the AIM Rules;

· each of the Independent Directors (other than Sir Michael Rake and Martin Bachmann) have agreed to resign. Therefore, following the AIM Cancellation, the Company will only have two independent directors;

· there may be positive or negative taxation consequences for Shareholders. Stamp duty or Stamp Duty Reserve Tax (SDRT) will be payable on any transfers post the AIM Cancellation; and

· it is expected the Takeover Code will cease to apply to the Company.

The Exit Opportunity is not conditional upon the Resolutions being passed at the General Meeting.

5. Participation in the Exit Opportunity

For Minority Shareholders who hold their Ordinary Shares in certificated form and AIM Minority Shareholders, please refer to Part III of the Circular for full details as to how to participate in the AIM Exit Opportunity. A summary of the process for acceptance is included below:

· Minority Shareholders who hold their Ordinary Shares in certificated form who wish to participate in the Exit Opportunity should complete the Exit Opportunity Form as soon as possible in accordance with the instructions set out therein and return the completed Exit Opportunity Form by post or by hand (during normal business hours) to Share Registrars Limited, 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9 7XX to arrive no later than 1.00 p.m. on 7 September 2022. A pre-paid reply envelope for use in the United Kingdom is enclosed for your convenience.

· AIM Minority Shareholders who hold Ordinary Shares in CREST who wish to participate in the Exit Opportunity should comply with the procedures set out in the Part III of this announcement headed "Terms and Conditions of the Exit Opportunity" in respect of transferring uncertificated Ordinary Shares in escrow through CREST. The Transfer To Escrow instruction must settle by no later than 1.00 p.m. on 7 September 2022.

Shareholders who return an Exit Opportunity Form or who complete an acceptance in CREST are still be permitted to vote their Ordinary Shares at the General Meeting and so should also return a Form of Proxy as set out in Section 13 below.

For BASE Minority Shareholders, who hold their Ordinary Shares through Caja de Valores in Argentina, you will need to follow the procedures to be communicated to you by the CVSA to accept the BASE Exit Opportunity and accordingly the detail set out in Part III of the Circular in respect of the AIM Exit Opportunity is not relevant to you. BASE Minority Shareholders will not be permitted to accept the AIM Exit Opportunity. Neither Euroclear nor Caja de Valores in Argentina are permitted to participate in the AIM Exit Opportunity.

6. Payment of Consideration

The following methods and currencies will be available for the payment of the purchase price in respect of the Exit Opportunity:

· to Minority Shareholders who hold their Ordinary Shares in certificated form will be made, by way of cheque, in GBP;

· to AIM Minority Shareholders who hold their Ordinary Shares in CREST will be made through CREST, by Share Registrars Limited (on behalf of Mercuria) procuring the creation of a payment obligation in favour of the payment banks of accepting Shareholders in accordance with the CREST payment arrangements, in GBP; and

· to BASE Minority Shareholders who hold their Ordinary Shares through Caja de Valores in Argentina in US$, in accordance with the notice to be issued by the CVSA once it has received the corresponding information from the international central depositary, Euroclear or by any other procedure determined by such entities. Delivery of cash to BASE Minority Shareholders for the Ordinary Shares to be purchased pursuant to the Exit Opportunity will be made by the CVSA in accordance with these procedures. The CVSA will act as depositary and paying agent in the Exit Opportunity, for the purpose of receiving the cash and transmitting such cash to BASE Minority Shareholders.

7. Re-registration

Following the proposed Cancellation, the Board believes that the requirements and associated costs of the Company maintaining its public company status will be difficult to justify and that the Company will benefit from the more flexible requirements and lower overhead costs associated with private limited company status. It is therefore proposed to re-register the Company as a private limited company.

In connection with the Re-registration, it is proposed that the New Articles be adopted to reflect the change in the Company's status to a private limited company. The principal effects of the adoption of the New Articles on the rights and obligations of Shareholders and the Company are summarised in Part II of the Circular and a blackline version of the New Articles, showing the proposed amendments to the Company's existing articles of association, is available on the Company's website at the following link (and will also be available for inspection at the General Meeting): www.phoenixglobalresources.com.

Subject to and conditional upon the AIM Cancellation and the BASE Cancellation and the passing of the Re-registration Resolution, an application will be made to the Registrar of Companies for the Company to be re-registered as a private limited company. Re-registration will take effect when the Registrar of Companies issues a certificate of incorporation on Re-registration. The Registrar of Companies will not issue the certificate of incorporation on Re-registration until the Registrar of Companies is satisfied that no valid application can be made to cancel the resolution to re-register as a private limited company. Any such application must be made within 28 days after the passing of the Re-Registration resolution and may be made on behalf of the persons entitled to make it by such one or more of their number as they may appoint for the purpose.

Under the Companies Act 2006, it is a requirement that Re-registration and adoption of the New Articles must be approved by not less than 75 per cent. of votes cast by shareholders at a general meeting. Accordingly, the Notice of General Meeting set out at Part V of the Circular contains special resolutions to approve the Cancellation, Re-registration and the adoption of the New Articles.

If the Re-registration Resolution is passed at the General Meeting and the Registrar of Companies issues a certificate of incorporation on Re-registration, it is anticipated that the Re-registration will become effective by 29 September 2022.

8. Process for AIM Cancellation

Under Rule 41 of the AIM Rules, it is a requirement that AIM Cancellation must be approved by not less than 75 per cent. of votes cast by shareholders at a general meeting. In addition, any AIM listed company that wishes for the London Stock Exchange to cancel the admission of its shares to trading on AIM is required to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date.

Accordingly, the Board are hereby convening the General Meeting to vote on the AIM Cancellation Resolution and have notified the London Stock Exchange of the Company's intention, subject to the AIM Cancellation Resolution being passed at the General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 15 September 2022. AIM Cancellation will not take effect until at least five clear Business Days have passed following the passing of the AIM Cancellation Resolution and a dealing notice has been issued.

If the AIM Cancellation Resolution is passed at the General Meeting, it is proposed that the last day of trading in Ordinary Shares on AIM will be 14 September 2022 and that AIM Cancellation will take effect at 7.00 a.m. on 15 September 2022.

As set out in Section 14 below, Mercuria, the Company's largest shareholder, which is currently interested in approximately 83.72 per cent. of the Ordinary Shares, has given an irrevocable undertaking to the Company to vote in favour of the Resolutions. Given the Independent Directors have, pursuant to the Relationship Agreement, consented to Mercuria voting its Ordinary Shares on the AIM Cancellation Resolution for the reasons explained in the Circular and Mercuria has irrevocably undertaken to vote in favour of the Resolutions, the Directors believe it is very likely that the Resolutions will be passed at the General Meeting. This does not, however, preclude Shareholders from attending and voting (whether in person or proxy) at the General Meeting.

9. CNV and BASE filings

The Company will file with the CNV and BASE the relevant information in connection with the Exit Opportunity and will request the delisting from the public offer and trading in Argentina on BASE. If the AIM Cancellation is approved at the General Meeting, supporting documentation will then be submitted to the CNV and BASE. The CNV will then issue a resolution authorising the delisting and inform BASE of such decision, in order for BASE to cancel the public trading of the Company's shares in Argentina on BASE without any further requirement.

10. Principal disadvantages and advantages of voting in favour of the Cancellation

The Board considers that, in deciding whether or not to vote in favour of the Cancellation, Minority Shareholders should take their own independent advice and consider carefully the disadvantages and advantages of the Cancellation (including, but not limited to, those set out below) in light of their own financial circumstances and investment objectives.

Disadvantages of voting in favour of the Cancellation

(i) the Relationship Agreement between the Company and Mercuria would terminate on the date on which the AIM Cancellation is effective, with the effect that, inter alia, there shall be no ongoing contractual obligation upon Mercuria to ensure that the Company carries on its business independently of Mercuria or that transactions and relationships between Mercuria and the Company are at arm's length and on normal commercial terms. In addition, following termination of the Relationship Agreement, there will no longer be any contractual obligation on Mercuria to ensure that the Company has a majority of independent directors on the Board, nor that the Company has an independent director appointed to the Board to represent the interests of minority shareholders;

(ii) there will no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM, through the secondary listing on BASE or any other recognised market or trading exchange. Whilst the Ordinary Shares will remain freely transferable, Mercuria has not committed to providing any dealing facility post Cancellation and the Ordinary Shares will be more difficult to sell compared to shares of companies traded on AIM, BASE or any other recognised market or trading exchange. It may also be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

(iii) the Company will be a private limited company registered with the Registrar of Companies in England and Wales in accordance with and subject to the Companies Act 2006 and the New Articles. The Company will no longer be required to comply with the AIM Rules or CNV regulations (and accordingly, Shareholders will no longer be afforded the protections given by the AIM Rules and CNV regulations). In particular, and among other things: (i) the Company will not be required to make any public announcements of material events, announce its interim or final results, comply with any of the corporate governance practices applicable to AIM companies, announce substantial transactions and related party transactions, comply with the requirement to obtain shareholder approval for reverse takeovers and fundamental changes in the Company's business, or maintain a website containing the information required by the AIM Rules; (ii) Shore Capital and Corporate will cease to be the Company's nominated adviser and the Company will cease to retain a nominated adviser; and (iii) Shore Capital Stockbrokers and Panmure Gordon will cease to be the Company's broker and the Company will cease to retain a broker. The Company will no longer be subject to the Market Abuse Regulation regulating inside information (among other things). The Company will no longer be subject to the Disclosure Guidance and Transparency Rules and will therefore, among other things, no longer be required to publicly disclose major shareholdings in the Company;

(iv) each of the Independent Directors, other than Sir Michael Rake and Martin Bachmann, have signed an agreement with the Company, confirming their resignation as Directors with effect from the date on which the AIM Cancellation is effective. Therefore, following the AIM Cancellation, the Company will only have two independent directors;

(v) it is expected that the Company's CREST facility will continue for a period of up to six months post the AIM Cancellation becoming effective, following which it will be cancelled and, although the Ordinary Shares will remain transferable following such cancellation, they will cease to be transferable through CREST. Shareholders who currently hold Ordinary Shares in CREST will, following such cancellation, receive share certificates;

(vi) the Board understands that Mercuria proposes to procure that the Company continues to maintain its website www.phoenixglobalresources.com and to post updates on that website from time to time, although as described above, Shareholders should be aware that there will be no obligation on the Company to include the information required under Rule 26 of the AIM Rules or to make announcements and/or update the website as required by the AIM Rules and there is no obligation on the Company or future Board directors to maintain the website or post updates to it;

(vii) the Cancellation might have either positive or negative taxation consequences for Shareholders (Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately). Following cancellation of the AIM listing, all transfers of Ordinary Shares in the Company will be liable for stamp duty or SDRT; and

(viii) following the AIM Cancellation and Re-registration and the Independent Director Resignations, it is expected that the Company will no longer remain subject to the Takeover Code, in relation to which further details are set in Section 11 below.

Advantages of voting in favour of the Cancellation

(i) As set out above, the Group's ability to continue as a going concern beyond June 2023 is currently dependent exclusively upon Mercuria's continued willingness to provide financial support. If Mercuria withdrew its financial support and the Company was unable to source alternative finance, this may cast doubt on the Company's ability to continue as a going concern. The Directors cannot assure Minority Shareholders of this continued support following Cancellation, but believe the Cancellation (including the associated reduction in administrative costs) will be attractive to Mercuria and enhance the likelihood of the continuance of their financial support.

The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them, and their shareholding in the Company and whether or not to vote in favour of the Cancellation.

As stated in Section 14 below, as the Company has received an irrevocable undertaking from Mercuria (representing approximately 83.72 per cent. of the Ordinary Shares) to vote in favour of the Resolutions, the Resolutions are expected to be passed at the General Meeting and the Cancellation is expected to occur.

11. Takeover Code

The Takeover Code currently applies to the Company. However, as noted above, given Mercuria currently holds more than 50 per cent. of the Company's voting rights, it is able to acquire further interests in Ordinary Shares without incurring any obligation to make a general offer to all shareholders under Rule 9 of the Takeover Code.

Following the AIM Cancellation and Re-registration and the Independent Director Resignations, it is expected that the Company will no longer remain subject to the Takeover Code, as a result of its failure to satisfy the residency test (i.e. where the majority of the Board continue to be resident in the UK, Channel Islands or Isle of Man).

This may change should the Board appoint additional directors to the Company as, if the Company had a majority of directors resident in the United Kingdom, Channel Islands or the Isle of Man, the Takeover Code would continue to apply, in the period of 10 years following the AIM Cancellation.

A summary of the protections afforded to Shareholders by the Takeover Code, which are expected to be lost on AIM Cancellation and Re-registration, is set out in Part IV of the Circular.

12. Current trading

Since the Company's final results for the year ended 31 December 2021, announced on 27 May 2022 and the drilling update announced on 25 July 2022, the Group has continued trading without any material changes and continues to be reliant on the financial support of Mercuria.

13. General Meeting actions to be taken

Cancellation, Re-registration and the adoption of the New Articles requires the passing of the Cancellation Resolution and the Re-registration Resolution at the General Meeting. Accordingly, a Notice of the General Meeting convening a meeting to be held at the offices of the Company on 1 September 2022 at 11.00 a.m. is set out at Part V of the Circular.

Whether or not you propose to attend the General Meeting, you are requested to complete the Form of Proxy in accordance with the instructions printed thereon and return it, duly signed, together with any power of attorney under which it is executed, as soon as possible but in any event so as to arrive not later than 11.00 a.m. on 30 August 2022. Completion and return of a Form of Proxy will not preclude a member from attending and voting at the General Meeting should they wish. Shareholders who return a completed Exit Opportunity Form shall still be permitted to vote their shares at the General Meeting and so should also return a Form of Proxy.

14. Irrevocable undertakings

The Board has received an irrevocable undertaking from Mercuria (representing approximately 83.72 per cent. of the Ordinary Shares), to vote in favour of the Resolutions which remains binding subject to a long stop date of 15 September 2022 on which it terminates. The irrevocable undertaking from Mercuria also requires Mercuria to provide the Exit Opportunity on the terms and conditions set out in this announcement.

Accordingly, the Resolutions are expected to be passed at the General Meeting.

15. Director intentions

John Bentley, Nicolas Mallo Huergo and I intend to sell all of our holdings of Ordinary Shares, equivalent to approximately 0.06 per cent. of the Company's issued share capital, through the Exit Opportunity. None of the other Directors hold any Ordinary Shares in the Company.

16. Recommendation

The Board considers the Cancellation, the Re-registration and the adoption of the New Articles to be in the best interests of Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of the Resolutions.

The Independent Directors and Nicolas Mallo Huergo consider it appropriate that those Minority Shareholders who are unable or unwilling to hold shares in the Company following the Cancellation should be given an opportunity to realise their investment under the Exit Opportunity. However, the Independent Directors and Nicolas Mallo Huergo make no recommendation to Minority Shareholders in relation to their participation in the Exit Opportunity; Minority Shareholders should consult their duly authorised independent advisers before they make a decision as to whether to sell some, all, or none of their Ordinary Shares, in order to obtain advice relevant to their particular circumstances.

Nevertheless, Shareholders should, when making their decision whether or not to avail themselves of the Exit Opportunity, bear in mind, inter alia, the following:

1. The loss of the listing, and resultant loss of liquidity, should the Cancellation take effect;

2. The fact that Mercuria has not undertaken to provide any dealing facility going forwards post Cancellation;

3. The loss of the protections of the AIM Rules and CNV regulations, particularly with regard to approvals and disclosure obligations, should the Cancellation take effect;

4. The expected loss of the protections of the Takeover Code, should the AIM Cancellation take effect;

5. The loss of the protections afforded by the Relationship Agreement in respect of the Company's independence from Mercuria following its termination upon the AIM Cancellation;

6. The Exit Opportunity purchase price represents, (i) a 25 per cent. premium to the closing mid-market price per Ordinary Share on AIM on 21 June 2022, being the last practicable date prior to the date of the Announcement of discussions with Mercuria; and (ii) an approximate 67 per cent. premium to the 30 day VWAP per Ordinary Share on AIM on 21 June 2022, being the last practicable date prior to the date of the Announcement of discussions with Mercuria; and

7. The Exit Opportunity is being made available now and there is no assurance that any exit opportunity may be made available in future, including at this price.

DEFINITIONS

The following definitions and technical terms apply throughout this announcement, unless the context otherwise requires: