19 Dec 2008 07:00
Sirius Petroleum Plc
("Sirius" or the "Company")
Placing of Shares and Strategic Partnership
Sirius Petroleum Plc (AIM: SRSP) announces a placing for cash of 35,000,000 new ordinary shares of 0.25p each ("Ordinary Shares") at 2.0p per share (the "Placing") with both new and existing institutional shareholders for gross proceeds of £700,000 (the "Placing Shares"). Of these Placing Shares, 1,250,000 are being placed with each of Graham Porter and Mike Hirschfield, directors of the Company, whose interests will increase to 12,083,332 shares representing 2.40% of the enlarged share capital, and 8,325,000 shares representing 1.66% of the enlarged share capital, respectively. The Company intends to use the proceeds of the Placing to set up an office in Nigeria and for general working capital. A placing fee of £50,000 is to be paid to Bederra Limited in relation to the Placing. The Board have agreed to this fee on the basis that the Placing is outside of the arrangements set out in the Circular to shareholders dated 23 July 2008 (the "Circular"). The Placing Shares will be issued on 9 January 2009.
In addition to and at the same time as the Placing, the Company will issue an additional 12,000,000 Ordinary Shares at par to Sirius Oil & Gas Limited ("SO&G") as part settlement of consideration amounting to £275,000 due to SO&G as set out in the Circular. The payment of this consideration (to be settled through the issue of 110,000,000 new Ordinary Shares) was approved at the EGM held on 19 August 2008 (the "EGM"). SO&G is considered to be part of a Concert Party with Corvus Capital Inc and others (the "Concert Party") and so the number of shares issued to SO&G was limited to an amount such that the total number of shares held by the Concert Party remained below 29.9%. As a result, only 46,000,000 new Ordinary Shares were issued to SO&G immediately after the EGM with 64,000,000 shares to be issued at a later date. The Placing dilutes the effective holding of the Concert Party allowing 12,000,000 additional shares to be issued to SO&G such that the effective shareholding of the Concert Party is restored. Accordingly, SO&G's interest in the Company will increase to 58,000,000 shares representing 11.54% of the enlarged share capital.
Application has been made to the London Stock Exchange for the 35,000,000 Placing Shares and 12,000,000 new Ordinary Shares being issued to SO&G to be admitted to trading on AIM, and dealings in the Ordinary Shares are expected to commence on 9 January 2009. Each of the Placing Shares and the Ordinary Shares being issued to SO&G will rank parri passu with the Company's existing issued Ordinary Shares.
Related Party Transaction
As set out above, 2,500,000 Ordinary Shares (1,250,000 Ordinary Shares each to Messers Porter and Hirschfield) are being placed with two directors of the Company and the shares issued to the same therefore constitute a related party transaction for the purposes of the AIM Rules for Companies (the "Related Party Transaction"). Messers Porter and Hirschfield are taking shares at the same price and on the same terms as each of the other investors in the Placing. Accordingly, with the exception of Messers Porter and Hirschfield who are involved in the Related Party Transaction and were therefore not involved, the directors of the Company, having consulted with its nominated adviser, Canaccord Adams Limited, consider the terms of the Related Party Transaction to be fair and reasonable insofar as the Company's shareholders are concerned.
Strategic Partnership
The Company announced on 4 December, 2008 that it had entered into a strategic partnership letter of intent with Nigerian based Bolad Energy Company ("Bolad"), staffed by ex-employees of two ExxonMobil subsidiaries in Nigeria, who will provide invaluable technical expertise and resources in the region.
The Company is pleased to announce a second strategic partnership letter of intent with Nigerian based RT5 Petroleum Limited ("RT5"),, who will, through their local knowledge and contacts and using their significant experience in the region and industry, provide Sirius with access to opportunities in the oil and gas sector in Nigeria on an exclusive basis. As with the Bolad strategic partnership, upon the successful identification and acquisition of an opportunity by the Company, it is intended that RT5 and the Company enter into a long-form joint venture agreement (the 'JV agreement'). This JV agreement will be for an initial term of 12 months from signature and, if satisfactory to both parties, will continue for the life of future opportunities. It is intended that RT5 will not only act as operator of the oil fields identified by RT5 and subsequently acquired by Sirius but will also manage all aspects of the interface with the Nigerian government and local communities. In consideration for its assistance in securing opportunities and its operation of the oil fields and government and local communities interface, the Company and RT5 would split ownership of any asset so acquired on a 42.9% to 57.1% ratio respectively (exclusive of any third party interest).
RT5 was founded by ex-Chevron Nigeria Limited ("CNL") employees, the primary Nigerian subsidiary of Chevron Texaco Inc. The founding directors include Mr Bayo Akinpelu, who held the position of Exploration Manager at CNL and later retired from CNL as Director of Government Relations. Prince Tunde Akindele (Chairman of RT5) is a native of Okitipupa, in Ondo State, where CNL maintains a significant operational presence. He has considerable local knowledge and contacts and served on the Board of Directors of the African Business Round Table (a business body set up by the African Development Bank, Abidjan). Prince Akindele was recently elected as an Executive Member of the association of Petroleum Products Importers and Traders in Nigeria. Mr Babatunde Agboola (Chairman of the Company) is also on the board of directors in RT5. He is also a director of Bolad..
Babatunde Agboola, Chairman of the Company, said:
"We are pleased to enter into this second key strategic relationship with RT5 who will assist us in our search for acquisition opportunities. We will continue to work actively with Bolad and RT5 to pursue our stated objectives of obtaining interests in marginal fields in Nigeria."
Share Capital
Following the Placing and the issue of Ordinary Shares to SO&G, the Company will have a total enlarged share capital of 502,494,385 Ordinary Shares. Sirius does not hold any Ordinary Shares in Treasury. Therefore, the total number of voting rights in the Company is 502,494,385 and this figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Service Authority's Disclosure and Transparency Rules.
Enquiries:
Toby Hayward, Sirius Petroleum Plc tel: +44(0) 870 389 6999
John Bick, Hansard Group, tel: +44(0) 78782 061007
Andrew Chubb, Canaccord Adams Limited tel: +44(0) 207 050 6500
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.