22 Feb 2016 07:00
Regency Mines Plc
Agreement to Acquire Interest in Oil Prospect
22 February 2016
Regency Mines Plc ("Regency" or the "Company"), the natural resource development and investment Company with interests in oil and mineral exploration, announces that it has signed binding heads of agreement ("the Agreement") to acquire a 5% interest in Horse Hill Development Ltd ("HHDL") from Angus Energy PLC ("Angus").
This is in line with the Company's strategy to acquire interests in producing or near-production onshore oil and gas assets.
HHDL is a special purpose company that owns a 65% participating interest and has the operatorship of licence PEDL 137 and the adjacent licence PEDL 246 in the UK Weald Basin. The Horse Hill-1 well, where a discovery was announced on 24th October 2014, is located within onshore exploration License PEDL 137, on the northern side of the Weald Basin near Gatwick Airport. The unaudited abbreviated Accounts as at 31 December 2014 show shareholders' funds of £3,573,456.
UK Oil and Gas Investments PLC (AIM:UKOG)("UKOG") on behalf of the operator announced on 8th February 2016 that operations had commenced at the Horse Hill site to conduct an extended flow test over three separate zones in the Horse Hill-1 oil discovery well. On 16th and 17th February successful flow test results were announced by UKOG in the first of these three zones to be tested.
Under the Agreement entered into between the parties, Regency has agreed to purchase the 5% interest in HHDL from Angus for a consideration of £400,000, to be satisfied as to £223,730 in cash, and as to £176,270 by the issue of 54,236,919 new shares in Regency at a price of 0.325 pence per share. Regency is settling the cash component of the consideration out of its working capital resources.
A further announcement will be made upon completion of the transaction and the issue of the new shares in due course.
Additionally, Regency has agreed to grant Angus 17,898,183 options exercisable into Regency shares at a price of 0.39p within eighteen months of the day of grant.
Following the transaction, Angus will be interested in 29.9% of the issued share capital of Regency. Angus has stated that its interest in Regency is purely as an investment and that it intends to retain its shares.
Andrew Bell, Regency Chairman, comments: "We sold out of the same percentage of HHDL last year. We now buy back on broadly equivalent terms. With the additional information now available, the asset now meets the investment criteria stated then. The timing of progress to production can be better quantified and in our opinion the potential and scale of the rewards now far outweigh the risk."
For further information contact:
Andrew Bell 0207 747 9960 Chairman Regency Mines Plc
Scott Kaintz 0207 747 9960 Executive Director Regency Mines Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.
Christian Pickel 0203 128 8208 Media Relations MHP Communications