ROSE.L Regulatory News (ROSE)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, REPUBLIC OF IRELAND, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF ROSE PETROLEUM PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

2 May 2018

Rose Petroleum plc

("Rose", the "Company" or the "Group")

Issue of equity and proposed general meeting

Rose Petroleum plc (AIM: ROSE), the AIM quoted natural resources business, is pleased to announce that the Company has raised £1 million, before expenses, through the issue of new ordinary shares of 0.1 p each in the Company ("Ordinary Shares") at a price of 3.25p per Ordinary Share, with warrants attached, to a range of new and existing investors (the "Placing"). Of the funds raised, £633,920 is conditional, inter alia, on the approval of shareholders at a General Meeting of resolutions to provide authority to the Directors to issue and allot further new ordinary shares otherwise than on a non-pre-emptive basis, further details of which are set out below.

The Board had intended to only utilise the existing share authority levels, however, given the high demand for this placing, the Board decided to increase the size of the fundraise but limit it to the £1 million level, to avoid unnecessary dilution while it continues to seek alternative funding for its proposed drill programme in the Paradox Basin, Utah ("Paradox").

Following on from the recent acquisition of additional acreage in the Paradox, a substantial proportion of the net proceeds of the Placing will be used to further prepare for the next stages of the Company's Paradox project, such as updating the Competent Person's Report ("CPR"), which is expected to be completed within six weeks. Additionally, in order to place the Company in the best possible position to secure funding for the drilling programme and be "drill ready" once the Application for Permit to Drill ("APD") is granted (expected Q3 this year), part of the Placing funds will be utilised for the required Operator Bond and insurance requirements of the Bureau of Land Management and State of Utah Lands regulations. The improved funding position of the Group, as a result of this fundraise, will also improve the negotiating position of the Board as it progresses through the process of funding the drilling programme for the Company's first Paradox wells.

In addition, part of the Placing proceeds may be used to fund certain business development activity. As the Company's activity in the Paradox basin has intensified, Rose has been approached by a number of third parties about potential partnering and investment opportunities in the region. While the Company remains wholly focused on the Paradox project, the directors of Rose believe they should appraise any additional opportunities further, particularly those comprising producing assets, to see if there may be commercial synergies with the existing Paradox operations and whether they might add value to Rose's portfolio. The Paradox activity will remain the absolute priority, and there are no guarantees that any opportunities reviewed will develop further.

Details of the Placing

In total, 30,769,231 Ordinary Shares are proposed to be issued pursuant to the Placing (the "Placing Shares") at a price of 3.25p per Placing Share (the "Placing Price"), as well as warrants over 30,769,231 Ordinary Shares as detailed further below. The Placing Shares been conditionally placed by Turner Pope Investments Limited ("TPI"), as agent of the Company, with certain existing shareholders and new institutional and other investors pursuant to a Placing Agreement.

The Company currently has limited authority to issue new ordinary shares for cash on a non-pre-emptive basis. Accordingly, the Placing is being conducted in two tranches as set out below.

1. First placing shares

A total of £366,080, representing the issue of 11,264,000 Placing Shares at the Placing Price (the "First Placing Shares"), has been raised within the Company's existing share allotment authorities (the "First Placing").  Application has been made for the First Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 10 May 2018 ("First Admission"). The issue of the First Placing Shares is conditional only upon First Admission and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission. 

2. Second placing shares

The balance of the Placing, being £633,920 and representing the issue of 19,505,231 Placing Shares at the Placing Price (the "Second Placing Shares"), is conditional upon, inter alia, the passing of resolutions to be put to shareholders of the Company at a general meeting of the Company to be held on 21 May 2018 (the "GM") to provide authority to the Directors to issue and allot further new ordinary shares otherwise than on a non-pre-emptive basis (the "Second Placing"), whereby such authority will be utilised by the Directors to enable completion of the Second Placing. A circular containing a notice of the GM will be posted to shareholders shortly.

In addition, the Second Placing is conditional, inter alia, on the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to the admission of the Second Placing Shares to trading on AIM. Application will be made for the Second Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 22 May 2018 ("Second Admission").

The Placing as a whole would, if the necessary resolutions are approved at the GM, result in the issue of 30,769,231 new ordinary shares of 0.1p each, representing, in aggregate, approximately 21.5 per cent. of the Company's issued ordinary share capital as enlarged by the Placing. The First Placing is not conditional on the Second Placing completing.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of issue of the Placing Shares.

Warrants

In addition to the Placing Shares, the Company is proposing to issue to subscribers in the Placing 30,769,231 warrants to subscribe for 30,769,231 new Ordinary Shares (the "Warrants"), representing one Warrant for each Placing Share. The Warrants will be exercisable at a price of 6.5p per Ordinary Share, a 100% premium to the Placing price, for a period of two years from issue.

The Company is also proposing to issue TPI with 1,538,461 warrants to subscribe for 1,538,461 new Ordinary Shares ("Broker Warrants") as part of TPI's fees for undertaking the Placing. The Broker Warrants will also be exercisable at a price of 6.5p per Ordinary share, a 100% premium to the Placing price, for a period of two years from issue.

The issue of the Warrants and Broker Warrants is conditional on the passing of resolutions to be put to shareholders of the Company at the GM to provide authority to the Directors to issue and allot further new ordinary shares otherwise than on a non-pre-emptive basis. The Warrants and Broker Warrants will not be admitted to trading on AIM or any other stock exchange.

Placing Agreement

Under the terms of a Placing Agreement between the Company and TPI, TPI will receive commission from the Company conditional on First Admission and Second Admission and the Company will give customary warranties and undertakings to TPI in relation, inter alia, to its business and the performance of its duties. In addition, the Company has agreed to indemnify TPI in relation to certain liabilities that they may incur in undertaking the Placing and exercising the Broker Warrants. TPI has the right 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.

Total voting rights

Following First Admission, the Company's total issued Ordinary Share capital will consist of 123,908,709 Ordinary Shares, with one voting right per share. The Company does not hold any shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company will be 123,908,709 from First Admission. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company pursuant to the FCA's Disclosure Guidance and Transparency Rules.

Following Second Admission, the Company's total issued Ordinary Share capital will consist of 143,413,940 Ordinary Shares, with one voting right per share. The Company does not hold any shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company will be 143,413,940 from Second Admission. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company pursuant to the FCA's Disclosure Guidance and Transparency Rules.

MAR

The Market Abuse Regulation (MAR) became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

Matthew Idiens, CEO, commented: "We are delighted by the level of support that investors have shown for the fundraise and we look forward to being able to accelerate activity on our Paradox project, where we are aiming to drill our first well before the end of this year. 

"We have made significant progress recently, improving greatly our technical understanding of the Paradox basin, and are more confident than ever in the future success of the project. We look forward to receiving the updated CPR to include the additional data and an independent valuation."

Enquiries:

Media enquiries:

Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD, Technical Advisor to the board of Rose Petroleum plc, who meets the criteria of a qualified person under the AIM Note for Mining and Oil & Gas Companies - June 2009, has reviewed and approved the technical information contained within this announcement.

Notes to editors

Rose Petroleum plc (http://rosepetroleum.com) is a North America-focused oil and gas company whose primary asset is approximately 80,000 acres in the oil and gas producing Paradox Basin in Utah, U.S.A., where it is earning into a 75% working interest. Using high-quality data gathered in a 3D seismic survey completed in October 2017, the Company has identified drilling locations in naturally fractured areas of the Paradox clastics formation with the intention of commencing a drilling programme in H2 2018, once necessary permits and funding have been secured.

The Company's established management is supported by an expert technical team with extensive experience of the basin, where current operations nearby have proven successful, with significant initial production rates and low decline rates, offering strong economics even in the present oil price environment.

The Company's strategy is to grow both organically and through acquisition, identifying additional hydrocarbon assets, conventional or unconventional, that would benefit from the Company's fast-acting, entrepreneurial approach.

Rose Petroleum has been quoted on AIM since June 2004.