Proposed Fundraising to raise approximately £7 million
Proposed settlement in shares of £1 million of deferred consideration
Saltfleetby Operations Update
Notice of GM
· Proposed Fundraise of approximately £7 million to cover;
o Acceleration of the field development and production
o Development of storage at Saltfleetby
o Cover cost overrun and hedge payments
· Sidetrack currently being drilled, expected completion in January despite weather issues
· Second compressor has arrived onsite and is expected to be operational during the course of January
· Angus is actively looking at inorganic and organic growth opportunities
· Proposed partial settlement of deferred consideration due to Forum Energy in shares
Angus Energy announces its intention to raise gross proceeds of approximately £7 million by means of a placing of approximately 115,000,000 new Ordinary Shares, to raise approximately £2 million, to certain institutional and other investors (the “Placing”) and a direct subscription of 316,000,000 new Ordinary Shares, to raise approximately £5 million, (the “Subscription”) (together, the “Fundraising”), in each case at a price of 1.65 pence per share (the “Fundraising Price”).
The Company also proposes to issue Warrants to Placees and subscribers in the Fundraising on the basis of one Warrant for every two New Ordinary Shares subscribed under the Fundraising. Each Warrant grants the holder the right to subscribe for one additional new Ordinary Share at the Fundraising Price and is exercisable for a period of 3 years from the date commencing six months after the date of issue.
The Fundraising is being conducted in two tranches; with the initial tranche of new Ordinary Shares being issued under the Company’s pre-existing share capital authorities and the second tranche of new Ordinary Shares, and Warrants in respect of the entire Fundraising, being subject to shareholders passing the Resolutions at the General Meeting. The Placing Shares and certain of the Subscription Shares are to be issued in the first tranche of the Fundraising, with any Warrants to be issued to Placees and subscribers being subject to the passing of the requisite Resolutions.
The Fundraising Price represents a discount of approximately 11 per cent. to the Closing Price of 1.86 pence per Ordinary Share on 16 December 2022, being the latest practicable business day prior to the publication of this Announcement.
The Placing element of the Fundraising is to be conducted by way of an accelerated bookbuild process which will commence immediately following this Announcement and will be subject to the terms and conditions set out in Appendix III to this Announcement.
A further announcement confirming the closing of the Bookbuild and the number of new Ordinary Shares to be issued pursuant to the Placing is expected to be made in due course.
Partial Satisfaction of Deferred Consideration
In addition, and conditional upon the passing of the Resolutions, Forum Energy Services Ltd (” Forum “) has agreed in principle to accept the allotment and issue of 60,606,061 new Ordinary Shares (the “Forum Shares”) at the Fundraising Price (together with the issue of 30,303,030 Warrants on the same basis as applicable to the Fundraising) in settlement of the Company’s obligation to pay certain deferred consideration of £1,000,000 to Forum in accordance with the Saltfleetby SPA as announced on 24 May 2022. The issue of the Forum Shares, and associated Warrants, to Forum is expected to be confirmed later today and is conditional on shareholder approval at the forthcoming General Meeting.
The partial satisfaction of the deferred consideration due to Forum through the issue of the Forum Shares (the ” Forum Transaction “) is a related party transaction under the AIM Rules given Forum is wholly owned by Paul Forrest, a 15.86% shareholder and Non-Executive Director of the Company. Accordingly, the independent directors (being the Board with the exception of Paul Forrest), having consulted with the Company’s nominated adviser, Beaumont Cornish Limited, consider the terms of the Forum Transaction to be fair and reasonable insofar as shareholders are concerned.
Following the issue of the Forum Shares, Forum is expected to hold 520,856,061 Ordinary Shares in the Company representing 15.2% of the Enlarged Issued Share Capital.
· Two tranche fundraising by way of the Placing and a Subscription to raise, in aggregate, approximately £7 million (before expenses) through the issue of, in aggregate, approximately 431,000,000 new Ordinary Shares at the Fundraising Price.
· The Subscription has raised approximately £5 million through the issue of 316,000,000 Ordinary Shares to Aleph Commodities Limited (“Aleph”) and its affiliates along with counterparties introduced by Aleph. Of the 316,000,000 Ordinary Shares to be issued pursuant to the Subscription, 226,219,000 are to be allotted and issued at First Admission and 89,781,000 are conditional on shareholder approval as detailed above.
· Placing element to be conducted via an accelerated bookbuild process launching today.
· The Fundraising Shares, assuming full take-up of the Placing and receipt of shareholder approval for the Second Tranche Shares, will represent approximately 14.7 per cent. of the Enlarged Issued Share Capital.
· The net proceeds of the Fundraising will be utilised by the Company to accelerate the drilling programme to expand production, the evaluation of acquisition opportunities, fund operational activities, settle a liability that has recently arisen under the Company’s hedging arrangements and for the Group’s general working capital purposes, as further detailed below.
The Fundraising comprises a proposed Placing and Subscription of new Ordinary Shares to be effected in two tranches. The Company intends to issue, in aggregate, up to 341,219,000 new Ordinary Shares to participants in the Placing and Subscription under the Company’s pre-existing share capital authorities to allot equity securities granted at the Company’s general meeting held on 13 June 2022, to raise gross proceeds of approximately £5.6 million (the “First Tranche Shares”). The First Tranche Shares are expected to be admitted to trading on AIM on or around 23 December 2022. Subject to, inter alia, the passing of the Resolutions, the Company intends to issue approximately 90,000,000 new Ordinary Shares, by way of direct subscriptions to raise gross proceeds of approximately a further £1.4 million. The Second Tranche Shares are expected to be admitted to trading on AIM on the first business day following the General Meeting, assuming that the Resolutions are passed. A further announcement will be made at that time.
Related Party Transaction
Aleph will be issued with 90,000,000 warrants to subscribe for Ordinary Shares at the Fundraise Price on the same terms as the Warrants attached to the Fundraise (the “Broker Warrants”). Accordingly, the issue of the Broker Warrants and Subscription as organised by Aleph and subscribed for by Aleph and its affiliates is a related party transaction under the AIM Rules given Aleph and affiliates are substantial shareholders in the Company). Accordingly, the Board, having consulted with the Company’s nominated adviser, Beaumont Cornish Limited, consider the terms of the Forum Transaction to be fair and reasonable insofar as shareholders are concerned. In forming this view, the Board notes that the Placing is being undertaken on the same terms with investors which are not related parties.
Following the issue of the First Tranche Shares, Kemexon is expected to hold 219,142,894 Ordinary Shares in the Company representing 6.7% of the Enlarged Issued Share Capital.
In addition, and conditional on the passing of the Resolutions, the Company also proposes to issue Warrants to Placees and subscribers in the Fundraising and Forum on the basis of one Warrant for every two New Ordinary Shares subscribed under the Fundraising or issued pursuant to the Deferred Consideration Settlement; and proposes to issue to WH Ireland as broker to the Company approximately 5,750,000 warrants; all warrants permit the holder to subscribe for Ordinary Shares at the Fundraise Price.
WH Ireland Limited (“WH Ireland”, or the “Bookrunner”), is acting as bookrunner in connection with the Placing. The Placing Shares are being offered by way of an accelerated bookbuild (the “Bookbuild”), which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix III to this Announcement.
Admission of the entirety of the First Tranche Shares is conditional, inter alia, upon the placing agreement dated 18 December 2022 between the Company and the Bookrunner (the “Placing Agreement”) not having been terminated and becoming unconditional prior to 8.00 a.m. on 23 December 2022 (or such later time(s) and / or date(s) as the Company and the Bookrunner shall agree, not being later than the Long Stop Date). The First Tranche does not require Shareholder approval as the First Tranche Shares will be issued pursuant to the Company’s pre-existing share capital authorities granted at the general meeting held on 13 June 2022. Note that completion of the First Subscription and the Second Subscription respectively, is not conditional on the completion of the Placing, nor on the admission of the Placing Shares to trading on AIM. However, completion of the Placing is conditional upon the First Subscription completing. Admission of the Second Tranche Shares is conditional, inter alia, upon the approval of Shareholders at the General Meeting proposed to be held no later than 25 January 2023, notice of which will be despatched to shareholders in due course.
The obligations of the Bookrunner under the Placing Agreement are conditional upon, amongst other things:
• admission of the First Tranche Shares becoming effective by no later than 8.00 a.m. on 23 December 2022 (or such later time and / or date as the Company and the Bookrunner shall agree, not being later than the Long Stop Date);
• the delivery by the Company to the Bookrunner of certain documents required under the Placing Agreement;
• the Company having fully performed its obligations under the Placing Agreement to the extent that such obligations fall to be performed prior to First Admission; and
• the Placing Agreement not having been terminated by the Bookrunner in accordance with its terms.
The timing of the closure of the Bookbuild and the allocation of the Placing Shares to be issued at the Fundraising Price are to be determined at the discretion of the Company and the Bookrunner.
Saltfleetby Operations Update
Saltfleetby Update – Sidetrack
The Company is pleased to announce that the third hole section on well Saltfleetb y SF7V has been drilled to a measured depth of 2,492 meters (md) within the uppermost reservoir section. The upper sections of the well are now cased off ready to drill ahead through the main reservoir. The reservoir will be drilled at approximately 90 degrees to a TD of around 3100m and will include a long section through the most productive of the reservoir sections alongside a previous well that was the most productive in the field but which was abandoned in the past for technical reasons.
Progress has slowed down significantly due to extremely cold weather in the locality which resulted in surface equipment failures and logistical delays. This was then compounded by nationwide strike action which is directly affecting crew and freight logistics . However, by completing the current section operations can be suspended safely over the C hristmas period with resumption of the final open hole drilling on 5 January 2023 for approximately 10 days followed by well testing and connection to the process plant.
Saltfleetby Update – Production and Process plant
The second gas compressor arrived on site on Friday 16 December 2022 and Angus is allowing for approximately one month to tie the unit into the rest of the plant prior to initiating dynamic commissioning. The month of December 2022 experienced more than its fair share of process upsets due to experiencing ambient temperatures of minus 10 degrees Celsius, nonetheless average production rates remain ahead of hedged volumes. Full production figures will be reported as usual at the end of the calendar quarter.
Placing and Subscription: Admission to trading
Application will be made to the London Stock Exchange for admission of the First Tranche Shares to trading on AIM. It is expected that admission will become effective and dealings in the First Tranche Shares will commence at 8.00 a.m. on or around 23 December 2022.
A further announcement will be made following the closure of the Bookbuild, confirming final details of the Placing.
The expected timetable of principal events is set out in Appendix I to this Announcement.
The Placing is not being underwritten and the Fundraising is not conditional on a minimum amount being raised.
The Company will also make a further announcement in due course with respect to the publication of the formal notice of the General Meeting with respect to seeking shareholder approval for, inter alia, the proposed issue of the Second Tranche Shares and the Warrants.
Qualified Person’s Statement: Andrew Hollis, the Technical Director of the Company, who has over 40 years of relevant experience in the oil and gas industry, has approved the information contained in this announcement. Mr Hollis is a Fellow of the Geological Society and member of the Society of Petroleum Engineers.
For further information on the Company, please visit www.angusenergy.co.uk or contact:
Angus Energy Plc
T: +44 (0) 208 899 6380
If anyone reads this article found it useful, helpful? Then please subscribe www.share-talk.com or follow SHARE TALK on our Twitter page for future updates.
Terms of Website Use
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned