26 Aug 2009 07:00
26 August 2009
Sirius Petroleum plc
("Sirius" or "the Company")
Funding for potential marginal oil field projects
The Board of Sirius is pleased to announce that it has entered into an agreement with Capital Investment Office ("CapInvest") based in London, UK, under which CapInvest has agreed to provide or procure debt funding for the Company's first marginal oil field project (the "Funding Agreement").
During 2008, the Company entered into a number of agreements with various parties which, when taken together, provide the Company with access to potential marginal field opportunities and the expertise and experience necessary to exploit those opportunities. The Company has been involved in a number of discussions relating to the acquisition of a marginal field opportunity and the Board remains confident of securing its first opportunity during the remainder of this calendar year or early 2010. The Board recognises that raising the funding necessary to exploit these opportunities solely through the issue of equity capital would significantly dilute existing shareholders. Accordingly, the Board considered it important to take steps to secure alternative debt funding for its plans.
Under the terms of the Funding Agreement, CapInvest has agreed to provide or procure at least US$ 80 million of debt funding for the first marginal field opportunity for which CapInvest will receive a fixed fee of £1.573 million which will be settled through the issue of 65,000,000 new ordinary shares (using a fixed price of 2.42p per share, the closing share price as at 19 August 2009, the latest practical date prior to agreeing the terms of the Funding Agreement). These new shares will only be issued if the Company secures a funded marginal oil field opportunity on or before 31 December 2010 (the "Period") and will represent approximately 9.55% of the enlarged issued share capital. In addition, on such event, CapInvest will be paid a cash fee of 1.5% of the funds raised. In the event that the Company chooses to source funding from an alternative provider during the Period, and provided that such alternative debt finance raised is in excess of US$80 million, the share element but not the cash element will remain payable to CapInvest. CapInvest will also be subject to a 6 month Lock-in following completion of such debt funding.
CapInvest, is the sole advisor to Capital Investment Trust, ("CapTrust") which is a family office trust based in Geneva, Switzerland. CapTrust operates with other similar organisations to make direct investments and has access to funding in excess of $1 billion. Previous transactions at CapTrust have included oil and gas related fixed income investments and many other investments in various restructured corporate loan and debt instruments. The Board believes that these arrangements are in the best interest of the Company and its shareholders as a whole as the overall cost of funding will be in line with that of a commercial placing fee.
Commenting on the proposals, Chairman Babatunde Agboola said "We now have a substantial funding line which will enable us to execute our first asset deal in line with our strategy to create shareholder value through the acquisition of proven marginal oil assets in Nigeria."
www.siriuspetroleum.com
| Enquiries: | |
| Canaccord Adams Limited Neil Johnson/Andrew Chubb | tel: +44 (0) 207 050 6500 |
| Hansard Group, | tel: +44(0)7872 061007 |
| John Bick |
About Sirius Petroleum Plc:
Sirius Petroleum Plc (AIM: SRSP) is UK registered company whose shares are listed on the AIM market of the London Stock Exchange. Sirius is currently considering a number of opportunities in the oil and gas sector with particular focus on Nigeria. Whilst discussions have been encouraging, Sirius is at an early stage in its consideration of its potential targets.