Baron Oil PLC (AIM:BOIL) Placing and subscription to raise £1.65 million

Baron Oil (AIM: BOIL), the AIM-quoted oil and gas exploration company, announces that it has conditionally raised £1.65 million (before expenses) by way of a placing and subscription (together the “Fundraising”) of a total of 2,750,000,000 new ordinary shares of 0.025p each (“Ordinary Shares”) in the Company (the “New Ordinary Shares”) at a price of 0.06 pence per share (the “Issue Price”). Allenby Capital Limited (“Allenby Capital”) is acting as broker in connection with the Fundraising, which was oversubscribed.

Andy Yeo, CEO of Baron, commented:

” We now have two major projects progressing towards key evaluation points – Chuditch PSC (Timor-Leste) and P2478 (UK) – both of which are material in terms of potential value, equity interest and prospective resources, with relatively short timelines to potential drill decisions. In particular, the additional monies committed to Baron will be sufficient to reach a decision point on Chuditch. There remains the final push to be done in the form of the interpretation of the reprocessed 3D seismic data, which is expected to commence in June and we look forward to updating the market on the results of the final 3D pre-stack depth migration data thereafter. From there, we will re-double our efforts on the farmout process. We are fortunate to be bringing Chuditch forward at a time when, after two years of COVID induced inactivity, we believe the farmout market is accelerating, supported by issues of energy security, structural imbalances in LNG and historically high prices for gas.

On P2478, energy security concerns have also played a part in an evolving UK landscape, following the reversal by the UK Government to now support further oil & gas exploration and production including an intention to hold future licensing rounds. Our initial work on P2478 should be complete by the end of 2022, leaving us time to make a drill or drop decision by July 2023.”

Indicative use of the Fundraising’s net proceeds and planned activities

The Directors anticipate the following indicative use of funds, based on the net Fundraising proceeds of approximately £1.5 million.

Approximately 55% of the net proceeds of the Fundraising will be applied towards activities in relation to the Company’s TL-SO-19-16 PSC (“Chuditch”) project and will include:

· Maximisation of the value of the reprocessing and interpretation of the 3D seismic data

· A Chuditch development scenario and cost study

· Continuing the Company’s farmout campaign, including participation in multiple oil & gas forums and conferences

· Ongoing support for the Dili office which is now fully operational

· Desktop environmental baseline studies in preparation for a drilling campaign

All of these activities will be focused on setting up a potential two well drilling campaign for Chuditch in 2023. The next key milestones will involve the completion of the reprocessing and interpretation of the 3D seismic data and its integration with other studies such as well design, petroleum systems analysis, petrophysics and physical core analysis.

Up to approximately 10% of the net proceeds of the Fundraising will be applied towards activities in relation to the Company’s UK P2478 licence (“P2478”) project, situated in the Inner Moray Firth and containing the Dunrobin prospect, including:

· Completion of reprocessing and subsequent interpretation of 3D and 2D seismic data

· Performing geochemical analysis

· Integration with other existing studies to reassess Dunrobin volumes and risk

· Development scenario studies in the case of exploration success

· Potentially conducting a farm-out initiative

These activities will be focused on evaluating and progressing P2478 ahead of a drill or drop decision by July 2023.

Approximately 35% of the net proceeds of the Fundraising will be directed towards the evaluation of potential new ventures, the withdrawal from Peru as well as covering the Company’s general and administrative expenses and other related working capital.

Director participation in the Fundraising

Andrew Yeo has subscribed for 16,150,000 New Ordinary Shares at the Issue Price in the Fundraising (the “Director Participation”). Details of the Director Participation are outlined in the table below.

The FCA notification, made in accordance with the requirements of UK MAR is appended further below.

Details of the Fundraising, Admission and total voting rights

The Fundraising comprises a placing of 2,475,000,000 New Ordinary Shares and a subscription of 275,000,000 New Ordinary Shares (together the “Fundraising Shares”) at the Issue Price . This has been raised using the authority granted to the Board at the annual general meeting held on 23 June 2021 on a non-pre-emptive basis.

Application has been made for the 2,750,000,000 Fundraising Shares to be issued pursuant to the Fundraising to be admitted to trading on AIM (“Admission”) and the date on which Admission is expected to become effective is on or around 9 May 2022.

Upon Admission, the Company’s issued ordinary share capital will consist of 14,333,612,461 Ordinary Shares with one voting right each. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company will be 14,333,612,461. With effect from Admission, this figure 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 Company under the FCA’s Disclosure Guidance and Transparency Rules.

Other

Notice 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 and as this is applied in the United Kingdom (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II as this is applied in the United Kingdom; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares the subject of the Fundraising have been subject to a product approval process, which has determined that such securities 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, distributors should note that: the price of the shares the subject of the Fundraising may decline and investors could lose all or part of their investment; the shares offer no guaranteed income and no capital protection; and an investment in the shares is compatible only with investors who do not need a guaranteed income or capital projection, 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 Fundraising. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital 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 the shares the subject of the Fundraising. Each distributor is responsible for undertaking its own target market assessment in respect of the shares and determining appropriate distribution channels.

Forward Looking Statements

This announcement includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “anticipates”, “targets”, “aims”, “continues”, “expects”, “intends”, “hopes”, “may”, “will”, “would”, “could” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not facts. They appear in a number of places throughout this announcement and include statements regarding the Directors’ beliefs or current expectations. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

For further information, please contact:

Baron Oil Plc

+44 (0) 20 7117 2849

Andy Yeo, Chief Executive


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