Last checked at 25 Jun 2018 07:00
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, AUSTRALIA, CANADA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU NO. 596/2014 ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY NEWS SERVICE THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS FOR THE PURPOSES OF THE PROSPECTUS RULES OF THE FINANCIAL CONDUCT AUTHORITY, NOR DOES IT COMPRISE AN ADMISSION DOCUMENT PREPARED IN ACCORDANCE WITH THE AIM RULES. ACCORDINGLY, THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY OR FILED WITH THE FINANCIAL CONDUCT AUTHORITY AND IS NOT INTENDED TO PROVIDE THE BASIS FOR, OR RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF TRINITY EXPLORATION & PRODUCTION PLC OR OTHER EVALUATION OF ANY SECURITIES OF TRINITY EXPLORATION & PRODUCTION PLC OR ANY OTHER ENTITY AND SHOULD NOT BE CONSIDERED AS A RECOMMENDATION THAT ANY INVESTOR SHOULD SUBSCRIBE FOR OR PURCHASE ANY SUCH SECURITIES.
Trinity Exploration & Production plc
Conditional Firm Placing to raise approximately US$11.1 million
and
Subscription to raise approximately US$6.9 million
and
Conditional Placing and Offer to Qualifying Participants to raise approximately US$2.0 million
and
Notice of Extraordinary General Meeting
Trinity Exploration & Production plc (AIM: TRIN) ("Trinity" or the "Company"), the independent exploration and production company focused on Trinidad, is pleased to announce that it has conditionally raised total gross proceeds of US$18 million (£13.7 million) by: (i) the conditional firm placing of 56,370,645 new Ordinary Shares (the "Firm Placing Shares"), which was oversubscribed, at an issue price of 15 pence (the "Issue Price") per Firm Placing Share to certain existing and new institutional investors (the "Firm Placing"); and (ii) the conditional subscription for 35,113,689 new Ordinary Shares (the "Subscription Shares") at the Issue Price per Subscription Share by certain Directors, members of the Company's senior management team and certain holders of the Loan Notes (the "Subscription").
In addition to the Firm Placing and Subscription, the Company intends to provide all Qualifying Participants with the opportunity to subscribe for up to 10,164,926 new Ordinary Shares (the "Offer Shares") at the Issue Price per Offer Share, to raise up to US$2.0 million (£1.5 million) before expenses (the "Offer"). Cenkos, as agent of the Company, has entered into arrangements with the Conditional Placees pursuant to which the Conditional Placees will subscribe at the Issue Price for the New Ordinary Shares not taken up by Qualifying Participants under the Offer (the "Conditional Placing" and, together with the Firm Placing, the Subscription and the Offer, the "Fundraising"), subject to clawback in respect of valid applications by Qualifying Participants under the Offer. As a result of the Conditional Placing, the Company has conditionally raised total gross proceeds of US$20.0 million (£15.2 million) pursuant to the Fundraising, irrespective of the level of take-up under the Offer.
Highlights
· Gross proceeds of US$20.0 million raised pursuant to the Fundraising, of which:
− Gross proceeds of approximately US$11.1 million raised from certain existing and new institutional investors in the Company pursuant to the Firm Placing;
− Gross proceeds of approximately US$0.5 million raised from certain Directors and members of the senior management of the Company pursuant to the terms of the Subscription Agreements;
− Gross proceeds of approximately US$6.4 million raised from certain holders of Loan Notes (including certain Directors of the Company and their connected parties) who have undertaken to convert the value of some or all of their Loan Notes (being the principal amount together with accrued interest thereon) at the Issue Price pursuant to the Subscription, further details of which are provided under the heading "Loan Notes" below. Pursuant to the Subscription, 88.2 per cent. of the Loan Notes by principal value are to be converted to new Ordinary Shares;
· In aggregate, Directors (and their connected parties) and senior management of the Company are contributing approximately US$3.1 million to the Fundraising pursuant to the Subscription;
· The New Ordinary Shares will represent, in aggregate, approximately 26.5% per cent. of the Company's Enlarged Share Capital immediately following completion of the Fundraising and Admission;
· The Issue Price represents a 28.2 per cent. discount to the closing price of an Ordinary Share on 22 June 2018 (the latest practicable date prior to this Announcement);
· The net proceeds of the Fundraising will supplement the Company's existing cash resources and forecast cash flow from operations, which together are intended to be applied as follows:
− capital expenditure and associated infrastructure investment to accelerate its onshore drilling programme, positioning the Company to grow production >10% year-on-year in the short-term. As a result of a largely fixed operating cost base this will enable the Company to generate significant free cash flow and self-fund new onshore drilling activity and maintain growth from 2020 onwards;
− to repay approximately US$4.6 million, being the total amount outstanding to the BIR and the MEEI;
− to repay approximately US$0.9 million, being the total amount of principal and accrued interest owed pursuant to the terms of the Loan Notes which have not been converted at the Issue Price as part of the Fundraising;
− to selectively pursue acquisitions and other value accretive opportunities that become available in the future; and
− to maintain adequate levels of working capital.
· The Fundraising is subject to approval at an extraordinary general meeting of the Company which is scheduled for 11 July 2018 (the "Extraordinary General Meeting"); and
· A Circular to Shareholders in respect of the Fundraising, and giving notice of the Extraordinary General Meeting, is expected to be posted on 25 June 2018.
Cenkos Securities plc ("Cenkos") is acting as lead bookrunner and Whitman Howard Limited ("Whitman Howard") as joint bookrunner in connection with the Fundraising. SPARK Advisory Partners Limited ("SPARK Advisory") is acting as the Nominated Adviser and Financial Adviser to the Company.
Bruce Dingwall CBE, Executive Chairman of Trinity, commented:
"This oversubscribed fundraising is a pivotal moment for the Company. Having focused on low cost production and growth opportunities following the restructuring of our balance sheet in early 2017, this will enable the Company to effect a step-change in production and development opportunities. The fact that we will be debt free and in a position to further develop our significant asset base means that we will be able to deliver further value and increased operating earnings to our shareholders.
"We are delighted with the strong support from existing and new shareholders and are focused on delivering on our key objectives. Our accelerated onshore drilling programme and production is geared towards underpinning self-financing operations in the years ahead and we very much look forward to building on the strong momentum achieved to date."
A copy of this announcement and the Company's latest presentation can be accessed on the Company's website: http://trinityexploration.com/highlights/fundraiser/
Enquiries
For further information please visit www.trinityexploration.com or contact:
Trinity Exploration & Production plc | +44 (0)131 240 3860 |
Bruce Dingwall CBE, Executive Chairman Jeremy Bridglalsingh, Chief Financial Officer Tracy Mackenzie, Corporate Development Manager | |
SPARK Advisory Partners Limited (Nominated Adviser and Financial Adviser) | +44 (0)20 3368 3550 |
Mark Brady Miriam Greenwood Andrew Emmott | |
Cenkos Securities PLC (Lead Bookrunner) | +44 (0)131 220 6939 |
Neil McDonald Beth McKiernan Derrick Lee Pete Lynch | |
Whitman Howard Limited (Joint Bookrunner and Equity Adviser) | +44 (0)20 7659 1234 |
Hugh Rich Nick Lovering | |
Walbrook PR Limited | +44 (0)20 7933 8780 |
Nick Rome | trinityexploration@walbrookpr.com |
Further information on the Fundraising and Admission is included in the section headed 'Additional Information on the Fundraising' below. Attention is also drawn to the section headed 'Important Information' of this Announcement.
Capitalised terms used but not defined in this Announcement shall have the meanings given to such terms in the sections headed 'Definitions' and 'Glossary' below.
About Trinity
Trinity is an independent oil and gas exploration and production company focused solely on Trinidad. Trinity operates producing and development assets both onshore and offshore, in the shallow water West and East Coasts of Trinidad. Trinity's portfolio includes current production, significant near-term production growth opportunities from low risk developments and multiple exploration prospects with the potential to deliver meaningful Reserves/Resources growth. The Company operates all of its nine licences and, across all of the Group's assets, Management's estimate of 2P reserves as at the end of 2017 was 23.2 mmbbls. The Group's 2C Contingent Resources are estimated to be 24.0 mmbbls. The Group's overall 2P plus 2C Reserves and Resources are therefore 47.2 mmbbls.
Trinity is listed on the AIM market of the London Stock Exchange under the ticker TRIN.
Competent Person's Statement
The technical information contained in this Announcement has been reviewed and approved by Graham Stuart, the Company's Technical Advisor, who has 34 years of relevant global experience in the oil industry. Mr Stuart holds a BSC (Hons) in Geology.
ADDITIONAL INFORMATION ON THE FUNDRAISING
The Company is pleased to announce that it has conditionally raised total gross proceeds of US$20.0 million (£15.2 million) pursuant to the Fundraising. Of this, US$18.0 million (£13.7 million) has been raised pursuant to the Firm Placing and Subscription. The Placing is being conducted by the Bookrunners on behalf of the Company.
In addition to the Firm Placing and Subscription, the Company intends to make the Offer to provide all Qualifying Participants with the opportunity to subscribe for Offer Shares at the Issue Price. It is proposed that the aggregate consideration to be received by the Company pursuant to the Offer will be limited to US$2 million (£1.5 million)(being the "Offer Maximum"). Qualifying Participants can apply for as many Offer Shares as they wish. However, the Directors reserve the right to exercise their absolute discretion (with the agreement of the Bookrunners) in the allocation of successful applications, including, without limitation, to ensure no Offer Shares are issued so as to exceed the Offer Maximum. Cenkos, as agent of the Company, has entered into arrangements with the Conditional Placees pursuant to which Conditional Placees will subscribe at the Issue Price for the New Ordinary Shares not taken up by Qualifying Participants under the Offer.
It is proposed that the Offer will only be open to Qualifying Participants and, save as set out in the preceding paragraph, there is no maximum or minimum subscription per Applicant. No Qualifying Participant may subscribe for Offer Shares in excess of the Offer Maximum. Multiple applications may be submitted. Qualifying Participants who are joint Shareholders may only apply for Offer Shares as joint applicants.
In order to apply for Offer Shares, Qualifying Participants should complete the Application Form in accordance with the instructions set out in the Circular to be published in due course.
The issue of the New Ordinary Shares pursuant to the Conditional Placing is subject to clawback to satisfy the rights of the Qualifying Participants to subscribe for New Ordinary Shares under the Offer.
Completion of the Fundraising is subject, inter alia, to Shareholder approval of the Resolutions to authorise the issue of the New Ordinary Shares, which will be sought at the Extraordinary General Meeting of the Company anticipated to be held at 10.00 a.m. on 11 July 2018.
A Circular containing further details of the Fundraising, including a notice convening the Extraordinary General Meeting, is expected to be dispatched to Shareholders on 25 June 2018 and will thereafter be available on the Company's website at http://trinityexploration.com/.
Application will be made for the admission of the New Ordinary Shares to trading on AIM, with Admission expected to occur no later than 8.00 a.m. on 12 July 2018 or such later time(s) and/or date(s) as Cenkos, Whitman Howard, SPARK Advisory and the Company may agree.
None of the Placing, Subscription or Offer have been underwritten.
Background to and Reasons for the Fundraising
Following the refinancing undertaken in 2017, Trinity has sustained and grown its operating earnings, on a solid foundation of a reduced and controlled cost structure, with over 80% of operating costs of a fixed nature, leading to reduced operating break-evens as production volumes have grown across its operations. Trinity has also grown its total 2P Reserves by approximately 9 per cent. during 2017 with an increase of 45 per cent. in the 2P Reserves attributable to its onshore assets.
The Board believes that the Company is now ideally positioned to benefit from increased production and an improved oil price, with incremental onshore production growth able to deliver higher-margin operating earnings. The Company remains protected against low oil prices as a result of its low break-even levels and its ongoing hedging programme (details of which can be found in the Company's announcement released on 13 November 2017), and continues to benefit from substantial tax losses which are available (US$226.1 million as at 31 December 2017).
Accelerated onshore drilling programme
The Board believes that Trinity now has the opportunity to materially grow production and cash flow from its onshore portfolio and the Fundraising is key to unlocking that additional, profitable growth in the short-term. During 2017, the Company focused on an extensive programme of workovers and recompletions which successfully grew production by 10 per cent. in H2 2017 and production averaged 2,721 bopd in Q1 2018 (compared to 2,519 in 2017). Following the successful drilling of two wells in Q1 2018, marking the end of a four year onshore drilling hiatus, the Company now intends to accelerate its onshore drilling programme. Funds are being raised to enable the Company to target drilling between 8-10 new wells per annum on an ongoing basis in order to grow and maintain production from an initial targeted base of 3,000 bopd at a rate in excess of 10 per cent. per annum in the short- and medium-term. It is anticipated that the activity supported by the Fundraising will allow the Company's onshore assets, which had operating costs of approximately US$11.1/bbl and a break-even of approximately US$16.6/bbl in 2017, to facilitate a leveraged uplift in operating earnings in the short term.
The potential of the Company's onshore assets is driven by the Company's enlarged subsurface team which has identified 14 further drilling locations to date, with further work on the prospect inventory ongoing. The Company's booked onshore reserves only reflect wells identified and budgeted, as opposed to the full well inventory potential across the Company's extensive acreage position, and the benefit of this subsurface work has begun to be reflected by the 45 per cent growth in onshore 2017 Reserves. This ability to grow Reserves from desktop subsurface work rather than being reliant on exploration drilling, offers a low risk approach to value growth.
The two new wells which the Company drilled in Q1 2018 commenced production during Q2 2018 and produced a combined 142 bopd in their first 21 days, which was in line with the Board's expectations. The ongoing drilling programme, together with a continuing programme of recompletions and workovers to arrest declines in base production, are expected to deliver further production growth in the short-to-medium term. In addition, each new onshore well adds further recompletion candidates to the inventory with additional up-hole recompletion potential at a later date.
The Company is considering acquiring existing 3D seismic data, which the Company believes will enable a more efficient high-grading of locations and potentially allow opportunities to use horizontal drilling techniques which have the ability to deliver initial production rates of 2-6x levels seen in traditional vertical wells, which could result in significantly enhanced project economics.
Strengthening of the balance sheet
The Fundraising will also facilitate the significant strengthening of the Company's balance sheet and, specifically, will allow for the accelerated and full repayment of, firstly, all outstanding liabilities to the BIR and the MEEI, being, as at 31 March 2018, approximately US$4.6 million in aggregate, and, secondly, all amounts outstanding under the Loan Notes issued in January 2017 which have not been converted as part of the Fundraising, being approximately US$0.9 million in aggregate. As part of the Fundraising, certain holders of the Loan Notes have participated in the Subscription by conditionally converting amounts totaling approximately US$6.4 million into Subscription Shares at the Issue Price. Following the Fundraising, the Company will have a debt-free balance sheet with its pro forma net cash position as at 31 December 2017 increasing from US$0.1 million to approximately US$18.5 million. The Board believes this will put the Company in an excellent position to maximise returns from the significant, low-risk 2P Reserves being targeted in the short-term.
Medium term growth potential
Whilst the primary focus of the Fundraising is on the onshore portfolio, the Board believes that the Company's East Coast Assets offer a significant opportunity to deliver a step-change in production levels in the medium term. In addition to accelerating the onshore programme, the Fundraising will also provide Trinity with the necessary capital resources to allow revision of the Trintes drilling plan and the TGAL Field Development Plan, to develop a phased approach focused on reducing technical risk and the funding requirement to optimise results. In the meantime, the Company continues to benefit from profitable production of approximately 1,000 bopd from the Trintes field where the operating breakeven was US$24.9/bbl in 2017.
Use of Proceeds
As outlined above, the net proceeds of the Fundraising will supplement the Company's existing cash resources and forecast cash flow from operations which together are intended to be applied as follows:
· capital expenditure and associated infrastructure investment to accelerate its onshore drilling programme which is expected to position the Company to grow production >10% year-on-year in the short-term. As a result of a largely fixed operating cost base this should enable the Company to generate significant free cash flow and self-fund new onshore drilling activity and maintain growth from 2020 onwards;
· to repay approximately US$4.6 million, being the total amount outstanding to the BIR and the MEEI;
· to repay approximately US$0.9 million, being the total amount of principal and accrued interest owed pursuant to the terms of the Loan Notes which have not been converted at the Issue Price as part of the Fundraising;
· to selectively pursue acquisitions and other value accretive opportunities that become available in the future; and
· to maintain adequate levels of working capital.
Loan Notes
The Company has in issue the Loan Notes. The Company has the right, at any time prior to 11 January 2019, to redeem the Loan Notes, provided that the outstanding debt owed by the Group to the BIR and the MEEI has first been settled in all material respects. As described above, it is the Company's intention, following completion of the Fundraising, to repay the total amounts outstanding to the BIR and the MEEI and thereafter to redeem the total amount of principal and interest which remains outstanding to the holders of the Loan Notes. The Loan Notes are also convertible, subject to the requirements of the City Code and provided the Loan Notes have not already been redeemed, by the holders at a conversion price of US$0.08125 at any time after the second anniversary of issue being (being 11 January 2019) or on a sale of the Company or a material disposal. However, once the Company exercises its right to redeem the Loan Notes following the Fundraising, the holders of the Loan Notes would not be entitled to convert any Loan Notes.
The holders of the Loan Notes resolved on 15 June 2018 that the terms attaching to the Loan Notes be amended such that the Loan Notes shall be convertible on the occurrence of the Placing at a conversion price equal to the Issue Price.
The holders of Loan Notes with a value (including accrued interest) of approximately US$6.4 million have undertaken to convert the value of some or all of their Loan Notes at the Issue Price (the "Converting Loan Note Holders") and thereby to subscribe for approximately 32,715,504 New Ordinary Shares pursuant to the Subscription (the "Conversion"). Immediately following Admission, the Company anticipates having US$0.9 million of Loan Notes outstanding including accrued interest.
Certain of the Converting Loan Note Holders, being the David and Christina Segel Living Trust and Angus Winther, are related parties under the AIM Rules and accordingly their participation is classified as 'related party transactions' under Rule 13 of the AIM Rules. Further details are provided below.
An updated corporate presentation can be found on the Company's website at http://trinityexploration.com/.
Participation by Directors and Related Party Transactions
Certain Directors and their connected parties have agreed to participate in the Subscription to raise gross proceeds of approximately US$2.9 million (£2.2 million). In particular (i) Bruce Dingwall, Jeremy Bridglalsingh and James Menzies have agreed to participate in the Subscription by conditionally subscribing for new Ordinary Shares in cash pursuant to Subscription Agreements entered into between each of them and the Company; and (ii) Angus Winther has agreed to participate in the Subscription pursuant to the Conversion (as described above under the heading "Loan Notes").
Each Subscription Share is conditionally subscribed for at the Issue Price. Each Subscription Agreement is conditional on the following conditions being satisfied prior to the termination of the Placing Agreement:
· the passing of the Resolutions at the Extraordinary General Meeting;
· completion of the Firm Placing having taken place in accordance with its terms (save for Admission); and
· Admission of the New Ordinary Shares (other than the Offer Shares) becoming effective by 8.00 a.m. on or around 13 July 2018.
The Subscription Agreements are not conditional on the Offer completing or on Admission of the Offer Shares.
The Loan Notes held by Angus Winther are being converted at the Issue Price per new Ordinary Share pursuant to the Conversion. The David and Christina Segel Living Trust (to which David Segel, a director of the Company, is connected) is also participating in the Subscription pursuant to the Conversion of the Loan Notes held by it at the Issue Price per new Ordinary Share. Further details of the terms of Conversion are set out above under the heading "Loan Notes".
Further details of the Directors' subscriptions, and the subsequent shareholdings of the Directors and the David and Christina Segel Living Trust following Admission, are set out in the table below:
Director
| Number of existing Ordinary Shares | Number of Subscription Shares subscribed for pursuant to the Subscription | Total Ordinary Shares held immediately following Admission | % of Enlarged Share Capital immediately following the Fundraising |
Bruce Dingwall | 12,215,498 | 1,270,616 | 13,486,114 | 3.5% |
Jeremy Bridglalsingh | 80,000 | 127,062 | 207,062 | 0.05% |
Angus Winther | 23,065,178 | 6,610,466 | 29,675,644 | 7.7% |
James Menzies | 675,000 | 300,000 | 975,000 | 0.25% |
David and Christina Segel Living Trust | 33,917,256 | 6,610,466 | 40,527,722 | 10.6% |
In addition, the David and Christina Segel Living Trust, by virtue of it holding more than 10 per cent. of the Existing Ordinary Shares, is classified under the AIM Rules as a related party of the Company and its participation in the Fundraising is considered a 'related party transaction' under Rule 13 of the AIM Rules. Furthermore, David Segel, a director of the Company, is connected to the David and Christina Segel Living Trust.
As there are no independent Directors, SPARK Advisory, the Company's nominated adviser under the AIM Rules, considers that the terms of the participation by the David and Christina Segel Living Trust, Bruce Dingwall, Jeremy Bridglalsingh, James Menzies and Angus Winther in the Fundraising are fair and reasonable insofar as Shareholders are concerned.
Notice of Extraordinary General Meeting
In accordance with the Company's articles of association, completion of the Fundraising is subject, inter alia, to Shareholder approval of the Resolutions to authorise the issue of the New Ordinary Shares, which will be sought at the Extraordinary General Meeting of the Company to be held at 10.00 a.m. on 11 July 2018 (or any adjournment thereof). The Placing is also conditional on the Placing Agreement otherwise being unconditional in all respects (save for Admission) and not having been terminated in accordance with its terms prior to Admission.
A Circular containing further details of the Fundraising, including a notice convening the Extraordinary General Meeting, is expected to be dispatched to Shareholders on 25 June 2018 and will thereafter be available on the Company's website at http://trinityexploration.com/.
The Directors have irrevocably undertaken to vote their combined shareholdings (including those connected to them) of, and beneficial interest in, 69,952,932 Ordinary Shares (24.8%) in favour of the Resolutions.
Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is currently expected that Admission will become effective and that dealings in the New Ordinary Shares will commence on AIM at 8.00 a.m. on 12 July 2018.
Recommendation
The Directors believe that the Fundraising, Admission and the passing of the Resolutions are in the best interests of the Company and Shareholders, taken as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Resolutions, as they will do in respect of their Ordinary Shares in the Company and the Ordinary Shares of persons connected with them, representing 24.8 per cent. of the Existing Ordinary Shares.
The Fundraising, is conditional, inter alia, on the Resolutions being passed by the Shareholders at the Extraordinary General Meeting (or any adjournment thereof) and, in respect of the Placing, the Placing Agreement otherwise becoming unconditional in all respects (save for Admission) and not having been terminated in accordance with its terms prior to Admission. Shareholders should be aware that if the Resolutions are not approved at the Extraordinary General Meeting, the Fundraising will not proceed.
Attention is also drawn to the section headed 'Important Information' of this Announcement.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Date for entitlements under the Offer | 5.30 p.m. on 21 June 2018 |
Dispatch of the Circular, Application Form and Form of Proxy | 25 June 2018 |
Latest time for receipt of completed Forms of Proxy and receipt of electronic proxy appointments via the CREST system for the Extraordinary General Meeting | 10.00 a.m. on 9 July 2018 |
Latest time for receipt of completed Application Forms and payment in full by cheque under the Offer | 11.00 a.m. on 10 July 2018 |
Date and time of Extraordinary General Meeting | 10.00 a.m. on 11 July 2018 |
Announcement of the results of the Extraordinary General Meeting and the Offer | 11 July 2018 |
Issue of New Ordinary Shares | 11 July 2018 |
Admission and commencement of dealings in the New Ordinary Shares expected to commence on AIM | 8.00 a.m. on 12 July 2018 |
CREST accounts expected to be credited for the New Ordinary Shares to be held in uncertificated form | 12 July 2018 |
Latest date for posting of share certificates for the New Ordinary Shares in certificated form (if applicable) | 19 July 2018 |
Each of the times and dates above refer to BST and are subject to change by the Company and/or the Bookrunners. Any such change will be notified to Shareholders by an announcement on a Regulatory Information Service. The Circular will contain further details of the expected timetable for the Fundraising, the Extraordinary General Meeting and Admission.
KEY STATISTICS
Closing price of Existing Ordinary Shares on 22 June 2018 | 20.9 pence |
Issue Price | 15 pence |
Number of Existing Ordinary Shares in issue on the Record Date | 282,399,986 |
Number of New Ordinary Shares to be issued the Company pursuant to the Placing, Subscription and Offer | 101,649,260 |
Enlarged Share Capital | 384,049,246 |
Gross proceeds of the Fundraising | US$20 million |
Net proceeds of the Fundraising | US$18.9 million |
ISIN of the Ordinary Shares | GB00B8JG4R91 |
SEDOL of the Ordinary Shares | B8JG4R9 |
DEFINITIONS
The following words and expressions shall have the following meanings in this Announcement unless the context otherwise requires:
"£" or "pence" | pounds Sterling, the lawful currency of the United Kingdom |
"Act" "Admission" | the Companies Act 2006, as amended from time to time in the case of: (i) the Placing Shares, the admission to trading on AIM of the Placing Shares becoming effective in accordance with the AIM Rules; (ii) the Subscription Shares, the admission to trading on AIM of the Subscription Shares becoming effective in accordance with the AIM Rules; and (iii) the Offer Shares, admission to trading on AIM of the Offer Shares becoming effective in accordance with the AIM Rules |
"Affiliates" | in relation to a person each of its holding companies, subsidiaries, branches, associated undertakings and Affiliates (Affiliates having the meaning given in Rule 405 or in Rule 501(b) of the Securities Act, as applicable in the context used) (including, without limitation, joint venture partners) from time to time (and subsidiaries of any such subsidiaries, branches, associated undertakings, Affiliates and holding companies) (including, without limitation, joint venture partners) and each of their and the person's respective officers, directors, supervisory board members, employees, representatives, controlling persons, shareholders and agents from time to time |
"AIM" | the market of that name operated by the London Stock Exchange |
"AIM Rules" | the AIM Rules for Companies and the AIM Rules for Nominated Advisers, as applicable |
"AIM Rules for Companies" | the AIM Rules for Companies governing the admission to and operation of AIM published by the London Stock Exchange as amended from time to time |
"AIM Rules for Nominated Advisers" | the AIM Rules for Nominated Advisers published by the London Stock Exchange as amended from time to time |
"Applicant" | a Qualifying Participant who lodges an Application Form under the Offer |
"Application Form" | the application form for use by Qualifying Participants to apply for Offer Shares pursuant to the Offer |
"Articles" | the articles of association of the Company in force at the date of this Announcement |
"Board" or the "Directors" | the directors of the Company, as at the date of this Announcement |
"BIR" | Board of Inland Revenue of Trinidad & Tobago |
"Bookrunners" | together Cenkos and Whitman Howard |
"BST" | British Summer Time |
"Cenkos" | Cenkos Securities plc, the Company's lead bookrunner for the purposes of the Placing, Offer and Admission |
"certificated" or "in certificated form" | an Ordinary Share recorded on the Company's share register as being held in certificated form (namely, not in CREST) |
"Circular" | the circular to be issued by the Company to Shareholders including, inter alia, details of the Fundraising, and attaching the Form of Proxy and Application Form |
"City Code" | The City Code on Takeovers and Mergers |
"Company" or "Trinity"
| Trinity Exploration & Production plc, a company incorporated in England & Wales under the Act with company number 07535869 whose registered office is at c/o Pinsent Masons LLP, 1 Park Row, Leeds, England, LS1 5AB |
"Conditional Placees" | those persons (if any) to whom New Ordinary Shares not acquired by Qualifying Participants in the Offer are to be placed |
"Conditional Placing" | the placing of the Conditional Placing Shares by Cenkos, as agent of and on behalf of the Company, at the Issue Price on the terms and subject to the conditions of the Placing Agreement |
"Conditional Placing Shares" | the 10,164,926 New Ordinary Shares (if any) which are to be issued by the Company to the Conditional Placees pursuant to the Conditional Placing |
"CREST" | the relevant system (as defined in the CREST Regulations) for the paperless settlement of trades and the holding of uncertificated securities, operated by Euroclear, in accordance with the same regulations |
"CREST Regulations" | Uncertificated Securities Regulations 2001 (SI 20013755), as amended from time to time |
"East Coast Assets" | means all the marine area governed by the Galeota Block Exploration and Production Licence, all producing and non-producing hydrocarbon fields within this area (Trintes, TGAL), all subsurface hydrocarbon leads and prospects identified within this area, and all surface and subsea infrastructure (such as platforms and pipelines) associated with the production, transport and handling of produced fluids from the Galeota Block, including the tank farm facility and office buildings situated onshore at Galeota Point, Trinidad |
"Enlarged Share Capital" | the issued Ordinary Share capital of the Company immediately following the issue of the New Ordinary Shares |
"Euroclear" | Euroclear UK & Ireland Limited, the operator of CREST |
"Existing Ordinary Shares" | the Ordinary Shares in issue as at the date of this Announcement being the entire issued share capital of the Company at the date of this Announcement |
"Extraordinary General Meeting" | the extraordinary general meeting of the Company, expected to be convened for 10.00 a.m. on 11 July 2018 or any adjournment thereof |
"FCA" or "Financial Conduct Authority" | the Financial Conduct Authority of the United Kingdom, the statutory regulator under FSMA responsible for the regulation of the United Kingdom financial services industry |
"Firm Placing" | the placing of the Firm Placing Shares by Cenkos and Whitman Howard, each as agent of and on behalf of the Company, of the Firm Placing Shares at the Issue Price on the terms and subject to the conditions of the Placing Agreement |
"Firm Placee" | persons who have agreed to subscribe for the Firm Placing Shares under the Firm Placing |
"Firm Placing Shares" | the 56,370,645 New Ordinary Shares which are to be issued by the Company to the Firm Placees pursuant to the Firm Placing |
"Form of Proxy" | the form of proxy enclosed with the Circular for use in relation to the Extraordinary General Meeting |
"FSMA" | the Financial Services and Markets Act 2000 (as amended from time to time) |
"Fundraising" | together the Placing, Subscription and the Offer |
"Galeota Block" | means the Galeota licence area situated off the south-east coast of Trinidad |
"Galeota Block Exploration and Production Licence" | the Exploration and Production (Public Petroleum Rights) Licence, Galeota Area granted to Petroleum Company of Trinidad and Tobago Limited and Trinity Exploration and Production (Galeota) Limited (formerly Bayfield Energy (Galeota) Limited) (a subsidiary of the Company incorporated in Trinidad and Tobago) dated 21 April 2009, as amended by a letter agreement dated 9 March 2012 |
"Group" | the Company and its subsidiary undertakings |
"ISIN" | International Securities Identification Number |
"Issue Price" | 15 pence per New Ordinary Share |
"Loan Notes" | the US$6,550,000 7.25 per cent. Convertible Redeemable Unsecured Loan Notes 2024 issued by the Company pursuant to the Loan Note Instrument |
"Loan Note Instrument" | the loan note instrument dated 11 January 2017 constituting the Loan Notes, as amended from time to time |
"London Stock Exchange" | London Stock Exchange plc |
"Management" | the Board and senior management of the Company |
"MAR" | Market Abuse Regulation (EU No. 596/2014) |
"MEEI" | Ministry of Energy and Energy Industries of Trinidad & Tobago |
"Notice of Extraordinary General Meeting" | the notice convening the Extraordinary General Meeting, as set out in Part V of the Circular |
"New Ordinary Shares" | together the Placing Shares, Subscription Shares and the Offer Shares |
"Offer" | the conditional invitation to Qualifying Participants to apply for the Offer Shares at the Issue Price on the terms and conditions set out in the Circular and the Application Form |
"Offer Maximum" | the aggregate maximum subscription under the Offer for up to 10,164,926 new Ordinary Shares to raise US$2 million (gross) |
"Offer Shares" | up to 10,164,926 new Ordinary Shares conditionally offered to Qualifying Participants pursuant to the Offer |
"Ordinary Shares" | ordinary shares of US$0.01 each in the capital of the Company having the rights and being subject to the restrictions contained in the Articles |
"Overseas Shareholders" | Shareholders with registered addresses, or who are citizens or residents of, or incorporated in, countries outside of the UK |
"Placees" | the Firm Placees and Conditional Placees |
"Placing" | the Firm Placing and Conditional Placing |
"Placing Agreement" | the conditional agreement dated 25 June 2018 among the Company, Cenkos, Whitman Howard and SPARK Advisory relating to the Placing, a summary of which is contained in the Circular |
"Placing Shares" | the Firm Placing Shares and the Conditional Placing Shares |
"Qualifying Participants" | subject to any restrictions imposed on Overseas Shareholders, holders of Existing Ordinary Shares whose names appear on the register of members of the Company on the Record Date as holders of Existing Ordinary Shares and who are eligible to be offered Offer Shares under the Offer in accordance with the terms and conditions set out in the Circular and the Application Form and for the avoidance of doubt the Offer is not being made to persons with registered addresses, or who are citizens or residents of, or incorporated in any of the Restricted Jurisdictions |
"Record Date" | 5.30 p.m. on 21 June 2018 |
"Regulatory Information Service" | a service approved by the London Stock Exchange for the distribution to the public of AIM announcements and included within the list on the website of the London Stock Exchange |
"Restricted Jurisdictions" | the United States, Australia, Canada, Japan, the Republic of South Africa and any other jurisdiction where the extension or availability of the Offer would breach any applicable law |
"Resolutions" | the resolutions to be proposed at the Extraordinary General Meeting, as set out in the Notice of Extraordinary General Meeting |
"Securities Act" | the United States Securities Act of 1933, as amended from time to time |
"Shareholders" | registered holders of Ordinary Shares |
"SPARK Advisory" | SPARK Advisory Partners Limited, the Company's nominated adviser and financial adviser for the purposes of the Placing, Offer and Admission |
"Subscribers" | (i) certain Directors and members of the Company's senior management team; and (ii) certain holders of the Loan Notes, who have conditionally agreed to subscribe for the Subscription Shares pursuant to the Subscription |
"Subscription" | the conditional subscription of the Subscription Shares at the Issue Price by (i) certain Directors and members of the Company's senior management team on the terms and subject to the conditions contained in the Subscription Agreements; and (ii) certain holders of Loan Notes pursuant to the conversion of their Loan Notes |
"Subscription Agreements" | the agreements to be dated 25 June 2018 between the Company and certain Subscribers, pursuant to which certain Subscribers have agreed to subscribe for a certain number of Subscription Shares at the Issue Price |
"Subscription Shares" | the new Ordinary Shares to be conditionally issued to the Subscribers pursuant to the Subscription Agreements or the conversion of their Loan Notes (as applicable) |
"TGAL" | the subsurface areas identified as having hydrocarbon reserves as tested by the TGAL-1 Exploration well, but being fault separated from and excluding the Trintes field |
"TGAL Field Development Plan" | the document which describes the subsurface of the TGAL area and the plan for the placement of wells, subsea structures, platform, pipeline and other infrastructural items required to access and produced certain volumes of the identified hydrocarbons within the TGAL area, including associated cost estimated and economic forecasts |
"Trinidad" | one of the islands making up Trinidad and Tobago |
"Trinidad and Tobago" | the Republic of Trinidad and Tobago |
"Trintes" | the producing field within an area comprising approximately 1230 hectares located in the Galeota Block |
"UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland |
"uncertificated" or "in uncertificated form" | a share or other security recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST |
"United States" | the United States of America, its territories and possessions, any state in the United States, the District of Columbia and other areas subject to its jurisdiction |
"US$" | United States dollars, the legal currency of the United States |
"Whitman Howard" | Whitman Howard Limited, the Company's joint bookrunner an equity adviser for the purposes of the Placing, Offer and Admission |
EXCHANGE RATES
Conversions from US$ to £ in this announcement have been conducted at an exchange rate of 1.3117:1 being the relevant exchange rate on 21 June 2018.
GLOSSARY
The following glossary of terms applies throughout this Announcement unless the context otherwise requires:
"2C" | denotes a Mid or Best estimate scenario of Contingent Resources |
"2P" | Proved plus Probable Reserves. Denotes a Mid or Best estimate scenario of Reserves |
"2D seismic" | seismic data acquired in a single traverse or series of traverses. 2D seismic data provides single cross sections |
"3D seismic" | seismic data acquired as multiple, closely spaced traverses. 3D seismic data typically provides a more detailed and accurate image of the subsurface than 2D seismic |
"bbl" | barrel |
"bopd" | barrels of oil per day |
"Contingent Resources" | those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies |
"licence" | an exclusive right to explore for petroleum, usually granted by a national governing body |
"mmbbls" | million barrels |
"offshore" | the geographical area that lies seaward of the coastline |
"onshore" | the geographical area that lies landward of the coastline |
"petroleum" | a generic name for oil and gas, including crude oil, natural gas liquids, natural gas and their products |
"Prospective Resources" | those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations |
"Reserves" | those quantities of petroleum which are anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions |
"Resources" | Contingent Resources and Prospective Resources, unless otherwise specified |
IMPORTANT INFORMATION
This Announcement has been issued by, and is the sole responsibility, of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Cenkos, Whitman Howard or SPARK Advisory or by any of their respective Affiliates as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
The distribution or transmission of this Announcement and the offering of the New Ordinary Shares in certain jurisdictions may be restricted or prohibited by law or regulation. Persons distributing this Announcement must satisfy themselves that it is lawful to do so. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. No action has been taken by the Company or the Bookrunners that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Bookrunners to inform themselves about, and to observe, such restrictions. In particular, this announcement may not be distributed, directly or indirectly, in or into the United States, Canada, the Republic of South Africa, Australia or Japan. Overseas Shareholders and any person (including, without limitation, nominees and trustees), who have a contractual or other legal obligation to forward this document to a jurisdiction outside the UK should seek appropriate advice before taking any action.
This Announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company. In particular, the New Ordinary Shares have not been qualified for sale under the applicable laws of any of Canada, Australia, the Republic of South Africa, or Japan and, subject to certain exceptions, may not be offered or sold to any national, resident or citizen of Canada, Australia, the Republic of South Africa or Japan.
The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act"), or with any securities regulatory authority of any state or jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in the United States absent registration under the Securities Act or an available exemption from, or as part of a transaction not subject to, the registration requirements of the Securities Act and in each case, in compliance with any applicable securities laws of any state or other jurisdiction of the United States. No public offering of the securities referred to herein is being made in the United States.
This Announcement includes "forward-looking statements" which includes all statements other than statements of historical fact, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of Management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could", "indicative", "possible" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. By way of example only, oil prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future and the fiscal regime which applies to oil & gas exploration and production activities may be significantly amended by the Government of Trinidad & Tobago. Fluctuations in oil and natural gas prices and, in particular, a material decline in the price of oil or natural gas, or amendments to the fiscal regime in Trinidad may have a materially adverse effect on the Company's business, financial condition and results of operations. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this Announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules.
No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
Cenkos, which is authorised and regulated by the FCA in the United Kingdom, is acting as lead bookrunner to the Company in connection with the Placing. Cenkos will not be responsible to any person other than the Company for providing the protections afforded to clients of Cenkos or for providing advice to any other person in connection with the Placing or any acquisition of shares in the Company. Cenkos is not making any representation or warranty, express or implied, as to the contents of this Announcement. Cenkos has not authorised the contents of, or any part of, this Announcement, and no liability whatsoever is accepted by Cenkos for the accuracy of any information or opinions contained in this Announcement or for the omission of any material information.
Whitman Howard, which is authorised and regulated by the FCA in the United Kingdom, is acting as joint bookrunner and equity adviser to the Company in connection with the Placing. Whitman Howard will not be responsible to any person other than the Company for providing the protections afforded to clients of Whitman Howard or for providing advice to any other person in connection with the Placing or any acquisition of shares in the Company. Whitman Howard is not making any representation or warranty, express or implied, as to the contents of this Announcement. Whitman Howard has not authorised the contents of, or any part of, this Announcement, and no liability whatsoever is accepted by Whitman Howard for the accuracy of any information or opinions contained in this Announcement or for the omission of any material information.
SPARK Advisory, which is authorised and regulated by the FCA in the United Kingdom, is acting as nominated adviser and financial adviser to the Company for the purposes of the AIM Rules in connection with the Fundraising and, as nominated adviser, its responsibilities are owed solely to the London Stock Exchange and are not owed to the Company or its Directors or to any other person or entity. SPARK Advisory will not be responsible to any person other than the Company for providing the protections afforded to clients of SPARK Advisory or for providing advice to any other person in connection with the Fundraising or any acquisition of shares in the Company. SPARK Advisory is not making any representation or warranty, express or implied, as to the contents of this Announcement. SPARK Advisory has not authorised the contents of, or any part of, this Announcement, and no liability whatsoever is accepted by SPARK Advisory for the accuracy of any information or opinions contained in this Announcement or for the omission of any material information.
The New Ordinary Shares will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.
Information to Distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Placees should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; Placing Shares offer no guaranteed income and no capital protection; and an investment in Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to Placing Shares.