23 Oct 2018 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
RockRose Energy plc
("RockRose", the "Group" or the "Company")
Tender Offer and
Notice of General Meeting
RockRose is proposing to purchase up to 3,072,062 Ordinary Shares of the Company through a tender offer at a price of 560 pence per Ordinary Share (the "Tender Offer"), which represents a 20% premium to the 60-day volume weighted average price (VWAP) per Ordinary Share.
The Company is today posting a circular (the "Circular") to shareholders outlining the Tender Offer and including a notice of General Meeting convened for 10.00 a.m. on 14 November 2018.
Pursuant to the Tender Offer, the Company will purchase up to 20% of its issued share capital and Qualifying Shareholders on the register of members of the Company at the Record Date are invited to tender any or all of their Ordinary Shares at the tender price of 560 pence per Ordinary Share. The Tender Offer will also present Qualifying Shareholders with an opportunity to sell more than their pro rata entitlement (up to their entire holding of Ordinary Shares) to the extent that other Qualifying Shareholders tender less than their pro rata entitlement. In such case, surplus tenders will be accepted in proportion to the number of additional Ordinary Shares tendered so that the total number of Ordinary Shares purchased does not exceed 3,072,062.
Background to the Tender Offer
Since re-admission of the Ordinary Shares to listing on the standard segment of the Official List and to trading on the Main Market of the London Stock Exchange in February 2018, the Ordinary Shares have traded on the Main Market of the London Stock Exchange at only a small premium to the value of the Company's cash balances (as explained further below) and the Directors do not believe that the potential of the Company's assets is fairly represented in the current price per Ordinary Share.
On 2 October 2018, the Company reported total cash balances of US$111 million of which US$52.5 million are restricted cash balances, being amounts deposited with trustees under the terms of various decommissioning security agreements in place on certain fields in which the Group has an interest. Accordingly, total cash balances were equivalent to approximately 555 pence per Ordinary Share, compared to the closing price on the Main Market of the London Stock Exchange as at 22 October 2018 of 547.5 pence per Ordinary Share.
Recent Company Activity
On 2 October 2018, the Company also announced that it had completed the acquisition of the entire issued and to be issued share capital of Dyas Holdings B.V., which owns the non-operated, Netherlands gas and condensate producing assets of the Dyas group of companies, for a total consideration of EUR€107 million. The Dyas group of companies was wholly owned by SHV Holdings N.V., a family-owned Dutch multinational. The Dyas acquisition, which had an effective date of 1 January 2018, was funded from existing cash resources.
On 3 October 2018, Rockrose management carried out a visit to the Bleo Holm vessel with our partners Repsol Sinopec. This coincides with the integrity study that is currently underway to further appraise the infrastructure needed going forward to maximise the recovery of discovered hydrocarbons within the area. This is in line with the UK government's Maximise Economic Recovery strategy. The latest cargo of Ross blend crude was unloaded at Pembroke in the first week of October 2018. Net to Rockrose this achieved a price in excess of US$85 a barrel.
On 10 October 2018, the Company announced the completion of the acquisition of a 20.43% interest in blocks, 23/11a, 23/16b and 23/16c, which contain the Arran field in the UK Central North Sea. As previously announced, the Company has also signed an equity realignment letter agreement on Arran that takes the Company's interest to 30.43%. This has also now completed.
On the same day, the Company confirmed that the final investment decision has been made by the joint venture partners to develop the Arran field. Shell has become the operator of the Arran project. At peak production, Arran is expected to produce around 100 million standard cubic feet a day of gas and 4,000 barrels per day of condensate, which combined equates to 21,000 barrels of oil equivalent per day (gross). Four new development wells will be drilled and the natural gas and liquids they produce will be transported via a newly installed subsea pipeline to the Shearwater platform. A field development plan for Arran has also now been approved by the UK Oil & Gas Authority.
The Company also informed Shareholders on 10 October 2018 that an infill well within the Petrogas Limited operated A18 field was spudded. This well was expected to take approximately 40 days to drill and complete, at a net cost of EUR€2.12 million which is funded from existing cash flow. The P50 recoverable volumes from A18-A5 are estimated to be approximately 3.22 BCF net to Rockrose, with anticipated net production of 4-6 mmscfd subject to export capacity constraints. Production at the A18 field is from stacked Pleistocene-aged marine sands and is currently from the older Q6A, Q7 and Q8 sands. The A18-A5 well is targeting the shallower Q3.2 and Q4 sand units.
Details of the Tender Offer
The Tender Offer will provide all Qualifying Shareholders with an opportunity to sell part or all of their respective shareholdings as an additional liquidity event. The Tender Offer will allow the Company to broaden the right to participate to include those Shareholders whose Ordinary Shares might not otherwise be purchased by the Company through a buy back in the market. Tendering Shareholders may also be able to participate in the Tender Offer in excess of their otherwise pro rata entitlement, up to their maximum shareholding in the Company, to the extent that other Shareholders do not wish to participate fully in the Tender Offer.
The Tender Offer is being made by Cantor Fitzgerald Europe to all Qualifying Shareholders. Full details of the Tender Offer, including the terms and conditions on which it is being made, are set out in Part III of the Circular and, in relation to Shareholders holding Ordinary Shares in a certificated form, on the Tender Form to be sent to Shareholders who hold their Ordinary Shares in certificated form.
The Tender Offer is available to those Qualifying Shareholders on the register of members of the Company at 6.00 p.m. on the Record Date (21 November 2018).
Shareholders are invited to tender any or all of their Ordinary Shares for purchase by Cantor Fitzgerald Europe at the Tender Price of 560 pence per Ordinary Share and:
· all Ordinary Shares under the Tender Offer will be purchased at the Tender Price;
· the maximum number of Ordinary Shares that may be purchased is 3,072,062; and
· offers may be scaled back pro rata to the respective numbers of Ordinary Shares tendered if the number of Ordinary Shares tendered for purchase exceeds 3,072,062.
Subject to the satisfaction of the Company's obligations under the relevant laws (which the Directors believe will be satisfied), and subject to the Resolution becoming effective, the purchase of Ordinary Shares by the Company under the Tender Offer will be funded from the Company's existing cash resources. Ordinary Shares not validly tendered may not be purchased.
Ordinary Shares will be purchased from Shareholders free of commissions and dealing charges.
Ordinary Shares validly tendered and purchased by the Company in accordance with the terms of the Tender Offer will be automatically cancelled and will not rank for any dividends declared after, or whose record date is after, the date on which the Ordinary Shares are purchased by the Company (expected to be on 23 November 2018).
The costs (including stamp duty) relating to the Tender Offer, assuming the Tender Offer is fully subscribed, are expected to be approximately £17,300,000 (including VAT).
The terms and conditions of the Tender Offer are set out in Part III of the Circular. Shareholders do not have to tender any Ordinary Shares if they do not wish to do so.
Overseas Shareholders
Shareholders with registered or mailing addresses outside the UK, or who are citizens or nationals of, or resident in, a jurisdiction other than the UK, should read paragraph 8 of Part III of the Circular and the relevant provisions of the Tender Form. It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such holders to complete and return a Tender Form.
Terms of the Tender Offer
The Tender Offer is conditional upon the following Tender Conditions:
(i) the Repurchase Agreement not having been terminated in accordance with its terms;
(ii) the Company being satisfied that it has available to it sufficient distributable profits (in accordance with section 705 Companies Act 2006) to effect the purchase of all tendered Ordinary Shares in accordance with the Repurchase Agreement;
(iii) the Tender Offer not having been terminated on or prior to 30 November 2018 (or such later time and date as the Company and Cantor Fitzgerald Europe may agree) prior to the fulfilment of the Tender Conditions referred to above;
(iv) the aggregate consideration to be paid by Cantor Fitzgerald Europe in respect of the Tender Offer being no more than £45,000;
(v) the total number of Ordinary Shares purchased pursuant to the Tender Price being not more than 3,072,062, representing 20% of the Company's issued share capital; and
(vi) the approval by the Shareholders of the Resolution at the General Meeting.
Action required
Further details of the procedure for tendering and settlement are set out in Part III of the Circular and for certificated Shareholders in the accompanying Tender Form.
Recommendation
The Board considers the Tender Offer to be in the best interests of the Company and Shareholders as a whole, and recommends that Shareholders vote in favour of the Resolution at the General Meeting.
The Directors make no recommendation to Shareholders in relation to participation in the Tender Offer itself. Whether or not Shareholders decide to tender all or any of their Shares will depend, amongst other things, on their view of the Company's prospects and their own individual circumstances, including their tax position. Shareholders are recommended to consult their duly authorised independent advisers and make their own decision.
Expected timetable of events
Publication of this announcement Tender Offer opens | 23 October 2018 23 October 2018 |
Latest time and date for receipt of Forms of Proxy | 10.00 a.m. on 12 November 2018 |
General Meeting | 10.00 a.m. on 14 November 2018 |
Results of General Meeting announced | 14 November 2018 |
Closing Date | 1.00 p.m. on 21 November 2018 |
Record Date for Tender Offer | 6.00 p.m. on 21 November 2018 |
Results of Tender Offer announced | 23 November 2018 |
Purchase of Ordinary Shares under the Tender Offer | 23 November 2018 |
CREST accounts credited with Tender Offer consideration and any unsold uncertificated Ordinary Shares | by 30 November 2018 |
Despatch of cheques for Tender Offer consideration in respect of certificated Ordinary Shares sold under the Tender Offer and any balance certificates in respect of any unsold certificated Ordinary Shares | by 30 November 2018 |
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The dates and times given in this announcement are London time and are based on the Company's current expectations and may be subject to change. Any changes to the expected timetable will be announced via a regulatory information service.
The Circular is available on the Company's website www.rockroseenergy.com. Terms defined in the Circular have the same meaning in this announcement.
The person who arranged for the release of this announcement on behalf of the Company was Andrew Austin, Executive Chairman.
End
Enquiries:
Rockrose Energy plc +44 (0)20 3826 4800
Manager and Joint Broker:
Cantor Fitzgerald Europe
Nick Tulloch / Gregor Paterson +44 (0)131 257 4634
Financial Adviser and Joint Broker:Hannam & Partners (Advisory) LLP
Giles Fitzpatrick / Andrew Chubb +44 (0)20 7907 8500
Financial PR:
Celicourt
Mark Antelme / Henry Lerwill +44 (0)20 7520 9261
For further information, please visit the Company's website at www.rockroseenergy.com.
Follow Rockrose Energy at:
Twitter: @rockrose_energy
LinkedIn: RockRose Energy