Option for acquisition signed

4 Oct 2007 07:01

Roxi Petroleum Plc04 October 2007 Roxi Petroleum Plc("Roxi" or the "Company") Option Agreement for Acquisition Signed Highlights Option to acquire 50% of ADA Group - ADA Group is the 100% owner of two oil and gas assets near Aktobe, Kazakhstan - Considerable development and exploration upside • West Zhanazhol contract area: Two undeveloped fields: the Zhanatan field and the Bashinkol field that is currently under production test and has five additional leads • Egizkara contract area: one discovery and five structural leads Roxi Petroleum plc, a Central Asian focused oil & gas company with assets inKazakhstan, announces it has purchased an option to acquire 50% interests in ADAOil LLP and ADA LLP (together the "ADA Group") that have 100% of the rights totwo oil and gas assets located in the Aktobe Oblast of Kazakhstan. The consideration for the option is US$2 million and the option is exercisableon or before 31 March 2008. On exercise of the option, the total considerationto acquire the 50% interests in the ADA Group is US$425 million. Roxi has the option to pay the consideration in cash or by the issue of new RoxiPetroleum shares, or a mix of US$75 million in cash and US$350 million payableby the issue of new Roxi Petroleum shares. Any Roxi Petroleum shares issued asconsideration for this acquisition will be issued at a price of 80p per share. The option is subject to a number of conditions, including the completion of thepreviously announced acquisition of the 59% interest in Eragon Petroleum plc andthe share price of Roxi being at least at an average of 80 pence per share forthe 20 dealing days prior to the exercise of the option. Following completion of the acquisitions of Eragon Petroleum plc and the ADAGroup the maximum number of shares that could be issued for the acquisition ofthe ADA Group interests would represent approximately 46 per cent of theenlarged share capital of Roxi.. ADA Oil LLP operates the West Zhanazhol exploration contract in the AktobeOblast of Western Kazakhstan that contains two undeveloped fields. These are theZhanatan field, which contains reservoirs in the Carboniferous KT-II carbonatesand Visean sandstones, and the Bashinkol field which has oil currently undertest production from shallow Triassic sandstones. Five further explorationstructures and leads have also been identified by ADA Oil. ADA LLP operates the Egizkara exploration contract area located 150kms northwest of West Zhanazhol. The block contains the shallow Cretaceous Egizkaradiscovery and five structural leads in the Mesozoic post salt sequence. If Roxi exercises the option, the acquisition of the ADA Group interests wouldconstitute a reverse takeover of the Company under the AIM Rules for Companiesand would fall under the ambit of Rule 9 of the Takeover Code. Therefore, thecompletion would be conditional upon, inter alia, both the approval of the ADAGroup acquisition by Roxi shareholders in a general meeting and upon admissionof the enlarged share capital of Roxi to trading on AIM. Roxi's shares are currently suspended pending the publication of a re-admissiondocument and shareholder circular in relation to the acquisition of EragonPetroleum plc. Further details of the ADA Group option and the assets subject tothe option will be provided on publication of that re-admission document laterthis year. Commenting on the option agreement Rob Schoonbrood, Chief Executive Officer ofRoxi said: "I am delighted that Roxi has secured an option over these very exciting assets. The ADA Group assets together with the assets in Eragon Petroleum plc and theassets already owned by Roxi will make the Company a more significant presencein our chosen markets". 4th October 2007 Enquiries: Roxi Petroleum PlcClive Carver Tel: +44 (0) 20 3159 5315 College HillPaddy Blewer/ Nick Elwes Tel: +44(0) 207 457 2020 W H Ireland LtdJames Joyce/David Porter Tel: +44(0) 207 220 1666 This information is provided by RNS The company news service from the London Stock Exchange