Reabold Resources Regulatory News (RBD)

14 June 2018

Reabold Resources Plc

("Reabold", "Reabold Resources" or "the Company")

Acquisition of Gaelic Resources Ltd and Notice of General Meeting

Reabold is pleased to announce the acquisition of 100% of the issued share capital of Gaelic Resources Ltd ("Gaelic") for the issue of 420 million new Ordinary Shares of 0.1p in Reabold ("Consideration Shares"), representing £3,045,000 at the closing price of 0.725p per share on AIM on 12 June 2018 ("Acquisition"). The Acquisition provides Reabold with options to participate in multiple near-term, high-impact oil and gas leases in California, United States (the "Leases"). 

Stephen Williams, co-CEO commented: "We are extremely excited to be drilling these high-impact opportunities in California. These considerably de-risked wells with low drilling costs and a fast path to monetisation are a perfect fit with the Reabold strategy. 

"Using Reabold shares to fund the acquisition of Gaelic allows us to preserve cash that can be used for drilling activity, which enhances near-term value-creation."

Following completion of the Acquisition, Reabold, through Gaelic, will have the right to earn-in to 50% of the Leases by drilling up to five wells by the end of 2019. Reabold expects three of these wells to be drilled before the end of 2018 with the first two, on the West Brentwood and Monroe Swell Leases, anticipated to be drilled in Q3. In a success case, these wells will be put onto production, providing cashflow for further drilling activity.

The Leases are operated by Integrity Management Solutions (the "Operator"), a California operating company that will direct operational decisions pertaining to the licenses. The five-well drilling programme earns an Operator (non-compliant) estimated NPV of $235m* net to Reabold and is expected to cost Reabold up to approximately $7 million* for the five wells.

The Acquisition is conditional, inter alia, on Reabold convening a General Meeting to seek approval of a Resolution to authorise the issue and allotment of the Consideration Shares. Application will be made in due course for the Consideration Shares, which when issued, will rank pari passu with the existing Ordinary Shares in issue, to be admitted to trading on AIM.

The vendors of Gaelic, who collectively will hold 12.86 per cent. of Reabold's enlarged issued share capital, have agreed to a lock-in period in respect of 75% of the Consideration Shares of six months from the date of issue and thereafter to orderly market arrangements for a further six months.

Further Information on the Leases 

Monroe Swell Redevelopment:

· Currently redeveloping four out of seven existing production wells with oil in place of 1 million barrels*

· Operator (non-compliant) estimate of potential value to Reabold $10 million*

Monroe Swell Drilling:

· 3D defined, high-impact shallow prospects

· Operator (non-compliant) potential resource of more than 4 million barrels of oil*

· Two-well programme to earn-in to 50% of the asset, the first to be drilled before the end of 2018, the second by mid-2019

· Both well sites permitted and ready to drill

· Operator (non-compliant) estimate of potential value to Reabold $100m* 

West Brentwood:

· Oil field with significant historic production

· Up-dip portion of the field expected to be undrained; well defined by 3D seismic

· 1-2 million barrels of oil in place*

· One-well programme to earn 50%

· Operator (non-compliant) estimate of potential value to Reabold of $25 million* 

Grizzly Island:

· Gas prospects with 50-90 bcf recoverable*

· Defined by 70 square mile 3D seismic grid

· Two-well programme to earn into 50%

· Operator (non-compliant) estimate of potential value to Reabold: $50-100M* 

Sachin Oza, co-CEO commented: 

"The Gaelic acquisition provides Reabold shareholders with another series of high-impact, near-term drilling events that have the potential to be transformative for the Company. 

We aim to take advantage of the fast pathway to monetisation of these assets by utilising that cash flow to partly fund later wells in the earn-in programme. We continue to assess a number of further potential investment opportunities in line with our strategy of delivering shareholder value."

Further Information on Gaelic 

The unaudited management accounts of Gaelic as at 31 May 2018 show net liabilities of £73,728 including a shareholder loan of £756,257 which is being assigned to Reabold as part of the Acquisition. The intention is that the assets of Gaelic will be revalued following the Acquisition to fair value such that net assets of Gaelic shall be £3,045,000, an amount equal to the consideration. For the five month period to 31 May 2018, these accounts also show a loss before taxation of £75,728. 

A Circular will be sent to Shareholders shortly convening a General Meeting at which Resolutions to grant the Directors authority to issue shares (including the Consideration Shares) will be proposed.

*Volumetric, NPV (net present value) and resource estimates according to Integrity Management Solutions as the operator of the Leases. It should be noted that such estimates have not been prepared in accordance with any Reporting Standard under the AIM Rules and therefore should be treated with caution at this stage and should not be relied upon. 

The information contained in this release in relation to the Monroe Swell, West Brentwood and Grizzly Island has been reviewed by Mr Dero Parker, President of Integrity Management Solutions. Mr Parker is a consultant and past owner operator of both oil and gas assets as well as hundreds of square miles of 3 dimensional seismic data and has 42 years of technical, operational, commercial and management experience in appraisal, development and production of oil and gas resources. Mr. Parker has reviewed the data contained in this release in relation to Monroe Swell, West Brentwood and Grizzly Island and considers the information to be fairly represented. Mr. Parker has consented to the inclusion of this information in the form and context in which it appears. 

ENDS

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Notes to Editors

1 Reabold Resources is an investing company investing in the exploration and production ("E&P") sector. The Company's investing policy is to acquire direct and indirect interests in exploration and producing projects and assets in the natural resources sector, and consideration is currently given to investment opportunities anywhere in the world.

As an investor in upstream oil & gas projects, Reabold aims to create value from each project by investing in undervalued, low-risk, near-term upstream oil & gas projects and by identifying a clear exit plan prior to investment. 

Reabold's long term strategy is to re-invest capital made through its investments into larger projects in order to grow the Company. Reabold aims to gain exposure to assets with limited downside and high potential upside, capitalising on the value created between the entry stage and exit point of its projects. The Company invests in projects that have limited correlation to the oil price. 

Reabold has a highly-experienced management team, who possess the necessary background, knowledge and contacts to carry out the Company's strategy.  

2 Gaelic Resources Limited owns 100% of the interests in Temporary Energy LLC (a limited liability company registered in the state of California, United States of America) ("Temporary"). Temporary has the benefit of an earn-in agreement with Sunset Exploration, Inc ("Sunset") to earn into 50% of certain oil and gas licences owned by Sunset in California.

Temporary also has a master services agreement with an oilfield services company called Integrity Management Solutions, Inc. to have day to day management, operatorship and conduct of the drilling and exploration of the licence areas for which they charge a fee.