Angus Energy PLC (AIM:ANGS) Acquisition of 49% interest in Saltfleetby

Acquisition of the remaining 49% interest in the Saltfleetby Project

Subscription of £3,000,000

Conditional Subscription of up to a further £3,000,000

Angus Energy Plc (AIM:ANGS) is pleased to announce that it has executed a share purchase agreement (“SPA”) to acquire the entire issued share capital of the Company’s current joint venture partner in the Saltfleetby Project (the “Project”), Saltfleetby Energy Limited, (” SEL ” or the ” Target “) which owns a 49% working interest in the Project (the “Acquisition”) thereby giving Angus Energy a 100% interest in the Project. To fund the Acquisition and other working capital requirements, the Company has concurrently arranged a direct subscription with affiliates of Aleph International Holdings (UK) Limited (“Aleph”) pursuant to which Aleph has subscribed for a total of 546,000,000 Ordinary Shares in the Company at a price of 1.09896011 pence, being £6,000,000 (Direct Subscription) split into an initial unconditional tranche of £3,000,000 and a second tranche of £3,000,000 conditional on Shareholder approval.

Summary of the Acquisition

The Company has executed a share purchase agreement to acquire the entire issued share capital of the Target from Forum Energy Services Limited (“Forum” or the “Seller”). The total effective consideration payable pursuant to the SPA is the sum of £14,052,000, which comprises:

· £250,000 to be paid in cash at Completion;

· the issue of 91 million Ordinary Shares at 1.09896011 pence per share (the “Funding Price”) at Completion (the “Initial Consideration Shares”);

· the issue and allotment of the 546,000,000 Ordinary Shares at a price of 1.2 pence per Ordinary Share (the (“Acquisition Price”) at Completion (the “Additional Consideration Shares”) which are subject to lock-up provisions detailed below; and

· up to £6,250,000 deferred consideration to be paid in instalments from net cash payments to Angus Energy from the Project through to 31 March 2025 (and subject to an upward or downward net cash adjustment) as and when those payments would have been available to SEL under the Company’s Senior Debt Facility of May 2021.

Following completion of the Acquisition, the Group would own a 100% working interest in, and would continue to be operator of, the Saltfleetby Licence.

As a result of the issue of the Initial Consideration Shares and Additional Consideration Shares and following the issue of the Initial Subscription Shares detailed below, Forum, will hold 637,000,000 Ordinary Shares in Angus representing approximately 28% of the Enlarged Issued Share Capital and just under 25% of the Enlarged Issued Share Capital following the issue of the Secondary Subscription Shares below.

Under the terms of the SPA, Forum will also have the right to appoint one director to the Board of Angus Energy which, subject to regulatory checks by the Company’s Nominated Adviser, is expected to be Paul Forrest, the beneficial owner of Forum. Whilst under the terms of the Direct Subscription, for so long as Aleph holds at least 10% of the issued Ordinary Shares, it shall have the right to approve the appointment of up to two Independent Non-Executive Directors to the board of the Company (and as a member of each and any committee of the Board) who are nominated by the Company.

Further details about the Acquisition and the risks associated with the transaction are set out below.

George Lucan, CEO, comments: “An opportunity has arisen to consolidate our partners’ 49% holding in the Saltfleetby asset for up to £14.052 million which represents a significant discount to the October 2021 P90 valuation of our own 51% interest at £25.4 million. That October 2021 CPR used an average price per therm for gas of under 70 pence over the entire life of the field whilst the Heren NBP forward price for gas is presently trading at a level which is over double that number out to 2025. In that regard we should note that over 70% of overall field revenues are unhedged.

Equally important to the Company’s long-term future is to attract the support of a strategic investors in the group led by Aleph, who have shown repeated commitment to Angus and have the resources and shared ambitions to grow Angus’s production in hydrocarbons and support its plans in relation to alternative and renewable energies.

Project progress at Saltfleetby is excellent with all major equipment on site, electrical and pipework tie-in underway, and select dry commissioning already begun. With a conservative estimate for wet commissioning we are confident of being able to make initial nominations, or First Gas, toward the middle of June. We aim to focus on new opportunities as soon as this milestone is achieved.”

Summary of Conditional Subscription

To support the Acquisition, and the Company’s growth ambitions, and to manage general working capital and Saltfleetby project capital expenditure in particular, Angus is pleased to announce that it has secured a group of strategic investors with whom the Company has completed, by way of a direct subscription, a conditional issue of 546,000,000 new Ordinary Shares (the “Subscription Shares”) at 1.09896011 pence per share to raise £6,000,000 with a group of family offices and private investors led by Aleph (the “Direct Subscription”). Certain affiliates of Aleph are currently part of the lender group that, along with Mercuria Energy Trading Limited, has provided total debt of £12,000,000 to Angus Energy and SEL to fund development of Saltfleetby (see RNS of 13 May 2021).

The Subscription Shares carry in aggregate rights to a further 173,100,000 shares in the Company by way of the issue of warrants, which can be exercised at any time within the next 5 years at a price of 1.09896011 pence per share.

Due to the limitations of the Company’s headroom, 273,000,000 Ordinary shares (the “Initial Subscription Shares”) are being issued and allotted today for £3,000,000, with the remaining 273,000,000 ordinary shares (the “Secondary Subscription Shares”) being issued and allotted for £3,000,000 subject to shareholder approval at the next general meeting of the Company (the “GM”) together with all of the warrants (being 86,550,000 warrants in respect of the Initial Subscription Shares and 86,550,000 in respect of the Secondary Subscription Shares). The GM is expected to be held on 15 June 2022. A further announcement will be made when the Shareholder Circular is sent to Shareholders to convene the GM.

The Funding Price represents a discount of approximately 14% per cent. to the Closing Price of 1.28 pence per Ordinary Share on 23 May 2022, being the latest practicable business day prior to the publication of this Announcement.

The Acquisition Price represents a discount of approximately 6% per cent. to the Closing Price of 1.28 pence per Ordinary Share on 23 May 2022, being the latest practicable business day prior to the publication of this Announcement.

Lender Shares

Further to the announcement made by RNS on 3 June 2021, 5,000,000 Lender Shares are to be issued and allotted in lieu of a cash facility fee pursuant to the Company’s Saltfleetby Loan Development Facility to the Lenders or their representatives at or around the first anniversary of the Loan Completion.

Admission to trading

Application will be made to the London Stock Exchange for Admission of the Initial Consideration Shares, Additional Consideration Shares, Initial Subscription Shares and Lender Shares (together the “New Shares”). It is expected that admission will become effective and dealings in the New Shares will commence at 8.00 a.m. on or around 27 May 2022 (“Admission”).

Following the issue of the New Shares, the Company will have 2,283,650,514 Ordinary Shares in issue (the “Enlarged Issued Share Capital”), each share carrying the right to one vote. The Company does not hold any Ordinary Shares in treasury. The above figure of 2,283,650,514 Ordinary Shares may be used by shareholders in the Company 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 share capital of the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

FULL DETAILS OF THE ACQUISITION AND SUBSCRIPTION ARE SET OUT BELOW

Read More

For further information on the Company, please visit www.angusenergy.co.uk or contact:

Enquiries:

Angus Energy Plc

www.angusenergy.co.uk

George Lucan

Tel: +44 (0) 208 899 6380


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