Regency Mines Plc (“Regency” or the “Company”), the natural resource company with interests in oil and mineral exploration, announces that the Company has agreed to sell 19 of the 50 shares in Horse Hill Limited (“HHDL”) announced on 22 February 2016 and 23 February 2016.
· Sale of 1.9% of HHDL for £323,000
· Regency reinvests £268,502 in UKOG shares at 1.55p a share or lower
· Regency retains 3.1% of HHDL
· If Regency sells remaining 3.1%, UKOG has right of first refusal for 18 months
Andrew Bell, Regency Chairman, states:
“With this transaction we retain a direct interest in the promising Horse Hill assets, but also gain exposure to Horse Hill and other key Weald Basin assets through a holding in UKOG.
We set a new benchmark price on our holding, and increase the liquidity of our assets and realise a holding gain.
We look forward to participating in the active exploration of the Weald Basin, which we expect to continue as the potential of this new hydrocarbon province is increasingly recognised.”
Under the agreement signed on 7 July 2017 the Company has agreed to sell to UK Oil and Gas Investments PLC (AIM:UKOG)(“UKOG”) a 1.9% interest out of the 5% interest it holds in HHDL for a purchase price of £323,000 (“Consideration”).
HHDL is a special purpose company that owns a 65% participating interest in and has the operatorship of license PEDL 137 and the adjacent license PEDL 246 in the UK Weald Basin. The Horse Hill-1 well, where a discovery was announced on 24 October 2014, is located within onshore exploration license PEDL 137, on the northern side of the Weald Basin near Gatwick Airport.
The Consideration will be settled by (a) a cash payment of £54,498 to be applied to Regency’s proportionate share of HHDL cash call 8, and (b) a cash payment of £323,000 to be applied to the subscription of new UKOG shares at the lower of (i) the 30 day volume weighted average price (“Relevant Price”) as at the date of completion of the sale and (ii) the Relevant Price as at 28 June 2017.
The Relevant Price as at 28 June 2017 was 1.55 pence and the closing price of UKOG shares as at 7 July 2017 was 2.85 pence.
The 19 shares in HHDL were acquired for £152,000 in February 2017 and are carried in Regency’s books at £284,809 as at the last audited balance sheet date, 30th June 2016.
Regency has granted UKOG a right of first refusal for 18 months over the 31 shares in HHDL not sold in this transaction.
The transaction is conditional on all relevant approvals being received.
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