VOG.L Regulatory News (VOG)

18 Oct 2006 07:01

Victoria Oil & Gas PLC18 October 2006 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO ORFROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN Victoria Oil & Gas Plc 17 October 2006 Issue of £20 Million Convertible Bonds • Victoria announces the private placement of up to £20 million of Secured Guaranteed Convertible Bonds due 2009• Proceeds to be used for the Company's on-going exploration and development programmes in Russia and Kazakhstan Further to the announcement made on 7 September, 2006 Victoria Oil & Gas Plc("Victoria" or the "Company") announces today the closing of the privateplacement of up to £20 million of Secured Guaranteed Convertible Bonds (the"Bonds") to fund the exploration and development programmes of its assets inRussia and Kazakhstan. Victoria today has issued £11.5 million Bonds, with anoption to issue an additional £8.5 million of Bonds in the next 90 days subjectto Shareholder approval. The placement of the Bonds was managed by JefferiesInternational Limited ("Jefferies") acting as Sole Placement Agent. Proceeds of the Bonds will be used to finance the Company's exploration andproduction programmes at its assets in Russia and Kazakhstan. Victoria hasannounced that an interpretation of open-hole logs from Well 103 at its WestMedvezhye gas and condensate project had confirmed the presence of hydrocarbonsin three potentially productive intervals. Following this discovery, the Companywill begin immediate mobilisation for testing of the intervals and furtheranalysis of its next exploration targets The Bonds were privately placed at 100 per cent of the principal amount and aredenominated in Sterling. The Bonds bear a coupon of 2.5 per cent per annum until17 April, 2007 and 6.25 per cent per annum thereafter, mature in 2009 and areconvertible in to ordinary shares of the Company. The initial conversion pricewas set at a 4 per cent premium to a price determined in a pricing periodleading up to closing. The Bonds also contain other terms, including a pricereadjustment provision, restrictions on issuances of certain future debt andanti-dilution protection in the event of certain future issuances of ordinaryshares. The Company has also secured a floating rate exchangeable note facility with INGBank N.V., (the "ING Facility"), which provides for finance up to a maximum of£25 million on a draw down basis. The Company's ability to draw down on the INGFacility is restricted until early 2007 by the terms of the Bonds, (please seeAppendix for further information). Commenting today, Chairman Kevin Foo said, "We are approaching a critical periodin Victoria's development with testing of our new discovery at Well 103, thedrilling of up to three further exploration wells at West Medvezhye in Russiaand development of Kemerkol in Kazakhstan. This financing has secured ourability to complete our current development programmes and puts us in a strongposition as we head towards 2007." For further information please contact: Kevin Foo / George Donne Leesa Peters/ Laurence ReadVictoria Oil & Gas Plc Conduit PR+44 (0)207 921 8820 +44 (0)207 429 6605 +44 (0)7979 955 923 Appendix - ING Facility Victoria has entered into an arrangement, under which it can issue floating rateexchangeable notes due 2011 (the "ING Notes") to ING under an uncommittedfacility of up to £25 million. The ING Notes (which shall be issued at par)will bear interest per annum of one per cent above 3-month LIBOR. ING has theright as the sole (non-transferable) note purchaser to hedge its exposure. ING have an arrangement fee payable solely in warrants (the "Warrants"). Theamount of the Warrants will depend on the amount drawn down under the INGFacility and all Warrants expire on 11 September 2011. The exchange price for the Notes and the strike price for the Warrants will bedetermined by reference to market prices and will be subject to the Directors ofthe Company having sufficient authority to allot the necessary shares. Important Note This press release is not an offer for sale of any securities in the UnitedStates. Neither the Bonds nor the shares issuable on conversion of the Bondsmay be offered or sold within the United States, or to or for, the benefit of USPersons (as defined in Regulation S under the US Securities Act 1933 as amended)absent registration or an exemption from registration. No offering of the Bondswill be made in the United States, or to or for, the benefit of US Persons (asdefined in Regulation S under the US Securities Act of 1933 as amended). This information is provided by RNS The company news service from the London Stock Exchange