We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Molecular Energies Plc | LSE:MEN | London | Ordinary Share | GB00BMT80K89 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 7.00 | 5.00 | 10.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Oil And Gas Field Expl Svcs | 33.23M | -10.5M | -1.0128 | -0.07 | 725.58k |
From Jul 2019 to Jul 2024
TIDMPPC
RNS Number : 0488M
President Petroleum Company PLC
12 September 2012
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION.
This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of President Petroleum Company PLC or other evaluation of any securities of President Petroleum Company PLC or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.
12 September 2012
PRESIDENT PETROLEUM COMPANY PLC
(Incorporated in England and Wales with registered no. 5104249)
("President" or the "Company")
Farm-in Agreement in 2 contiguous blocks of 16,000 km2 in Paraguay
Firm Placing and Conditional Placing of 115,850,000 New Ordinary Shares at 20 pence per share
Proposed Open Offer of up to 19,998,541 New Ordinary Shares at 20 pence per share
Proposed Subscription of 18,750,000 New Ordinary Shares at 20 pence per share
President announces it has signed a Farm-In Agreement for two contiguous blocks in Paraguay and a proposed fundraising comprising a firm placing of 28,962,500 New Ordinary Shares, a conditional placing of 86,887,500 New Ordinary Shares, an open offer of up to 19,998,541 New Ordinary Shares and a subscription of 18,750,000 New Ordinary Shares, in each case at 20 pence per share to raise GBP30.92 million (approximately US$49.47 million) assuming a full take-up under the Open Offer.
The Farm-In Agreement provides for President to earn up to a 59 per cent. interest in the Pirity Block from Pirity Hidrocarburos (a subsidiary of PetroVictory); and up to a 60 per cent. interest in the Demattei Block from Crescent Global Oil Paraguay S.A. (a subsidiary of Crescent Oil LLC) in the Chaco region of Paraguay. The combined blocks have a gross risked recoverable resource potential of greater than 150 million barrels, with a net success case NPV10 estimated at over US$25 per barrel (President estimates).
This is a significant transaction for the Company in a relatively untapped region of the world, which is open for business. The transaction is a strategic fit for President, as the petroleum system is well known to the Company through its operations across the border in Argentina. The transaction builds critical mass in the region while providing entry into a new country, and utilises President's expanding technical and operational team.
Farm In Highlights:
-- Initial payment to the vendors, certain aspects of the work programme in relation to the Pirity and Demattei Blocks and other opportunities across the Group to be funded through a placing of approximately US$37.07 million, a US$6.00 million subscription, a US$15 million loan facility, and an open offer of up to approximately US$6.40 million
-- Pirity Sub Basin is an extension of a proven petroleum system in the Olmedo Sub Basin on the Argentine side of the border, which has produced in excess of 150 million barrels of oil equivalent to date
-- Farm in provides sole operatorship and control over an almost entire Cretaceous rift basin of 16,000 km(2), with a proven petroleum system, which has been inaccessible for 25 years
-- The Pirity Sub Basin has proven source rock, multiple structures, with on trend production (the Palmar Largo field in Argentina 20 km to the west has produced 44 million barrels to date, and Gran Tierra have recently discovered an extension to the field, with the well Proa X2 initially flowing over 6,000 bopd)
Rationale
-- A strategic fit in a frontier oil and gas region where President can make excellent use of its technical capabilities and knowledge of the region.
-- Paraguay is a constitutional republic, is open for business, and has an attractive hydrocarbon law, with a sliding scale royalty of a maximum of 14 per cent. and a 10 per cent. corporate tax rate. Paraguay is enjoying strong economic growth and inward investment such as a Rio Tinto aluminium smelter
-- President's US partners in the blocks have been active in Paraguay for 7 years, and enjoy strong support in Paraguay and the USA
Equity Fundraising Highlights
-- 115,850,000 New Ordinary Shares have been placed with investors at a price of 20 pence per share, to raise gross proceeds of GBP23.17 million (approximately US$37.07 million)) split between
o 84,425,000 New Ordinary Shares placed with Institutional Investors (raising approximately GBP16.89 million)
o 31,250,000 New Ordinary Shares placed with Levine Capital Management (raising approximately GBP6.25 million)
o 175,000 New Ordinary Shares placed with Directors (raising approximately GBP35,000)
-- The Issue Price represents a discount of 20 per cent. to the closing middle market price of 25 pence per Ordinary Share on 11 September 2012, being the last trading day before this announcement
-- 28,962,500 New Ordinary Shares expected to be admitted pursuant to the Placing to trading on AIM at 8.00 a.m. on 17 September 2012, with the remainder subject to, amongst other things, shareholder approval
-- Peter Levine, through Levine Capital Management to subscribe for 31,250,000 New Ordinary Shares (raising approximately US$10.00 million) in Placing, all such New Ordinary Shares to be issued by Second Admission although payment for 15,625,000 of those New Ordinary Shares will be deferred until 31 December 2012. Peter Levine will additionally provide a US$15.00 million revolving loan facility available to President for a further 24 months.
-- Certain Shareholders (including Levine Capital Management and the Directors) have irrevocably undertaken to vote or procure to the voting in favour of the Resolutions 1 and 2 relating to the Placing, Subscription and Open Offer in respect of 48,982,533 Existing Ordinary Shares, in aggregate, representing approximately 38.1 per cent. of the existing issued ordinary share capital of the Company
-- 7 for 45 Open Offer to raise up to GBP4.00 million to allow all of the Company's existing Shareholders the opportunity to participate in the fundraising
-- 18,750,000 New Ordinary Shares to be subscribed for by Pirity Hidrocarburos (raising approximately GBP3.75 million) on completion of the Acquisition. The subscription by Pirity Hidrocarburos is conditional on, amongst other things, shareholder approval and completion of the Acquisition taking place.
-- RBC Capital Markets and Jefferies are acting as Joint Bookrunners
Peter Levine, Chairman of President, commented:
"This transaction is a transformational step for President which will allow it to achieve substantial growth and reflects our determination to transform President into a mid-cap company. The high impact exploration potential in these large blocks in Paraguay is a company making opportunity, with identified prospects having gross risked recoverable resource potential of greater than 150 million barrels, with a net success case NPV10 estimated at over US$25 per barrel (President estimates). We are pursuing an on-trend play across the Argentine border into Paraguay where we have secured control over the Paraguayan side of the basin.
The ability to solely operate and control almost an entire under-drilled Cretaceous rift basin is a unique opportunity for President to leverage our extensive knowledge of the play systems from our nearby Argentine operations. Combining President's expertise, with the knowledge of our experienced partners' who enjoy significant support in Paraguay, will allow us to play a major role at this exciting time for the oil industry in Paraguay. I am also delighted by the support shown to us by our existing and new investors in supporting this important growth step for President, as it builds critical mass in the region."
An investor presentation regarding the Acquisition and Placing will be available on President's website: www.presidentpc.com.
This summary should be read in conjunction with, and is subject to, the full text of this announcement. The Schedule to this announcement (which form part of this announcement) include the terms and conditions of the Placing.
For further information contact:
President Petroleum Company
John Hamilton, Director +44 (0) 207 811 0140 Ben Wilkinson, Finance Director +44 (0) 207 811 0140
RBC Capital Markets (Nomad, Joint Broker)
Matthew Coakes, Jeremy Low, Stephen Foss +44 (0) 207 653 4000
Jefferies (Joint Broker)
Simon Hardy, Lee Morton, Max Jones +44 (0) 207 029 8316 Pelham Bell Pottinger +44 (0) 207 861 3232
James Henderson, Mark Antelme
IMPORTANT NOTICES
This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. President cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding, or which make assumptions in respect of, the future performance of the Company's principal subsidiary undertakings, the on-going exploration and appraisal of the Group's portfolio of assets, the timing of the commencement of any development of, and future production (if any) from, those assets and the sustainability of that production, the ability of the Group to discover new reserves, the prices achievable by the Group in respect of any future production, the costs of exploration, development or production, future foreign exchange rates, interest rates and currency controls, the future political and fiscal regimes in the overseas markets in which the Group operates, the Group's future financial position, plans and objectives for future operations and any other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of oil or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond President's control. As a result, President's actual future results may differ materially from the plans, goals, and expectations set forth in President's forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of President speak only as of the date they are made. Except as required by the Financial Services Authority (the "FSA"), the London Stock Exchange, the AIM Rules or applicable law or regulation, President expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in President's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This announcement has been issued by and is the sole responsibility of President and the information contained herein has not been verified by RBC Capital Markets or Jefferies.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by RBC Capital Markets or Jefferies, or by any of their respective affiliates, directors, officers, employees, professional advisers or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
RBC Capital Markets, which is authorised and regulated in the United Kingdom by the FSA, is acting for President and for no-one else in connection with the Capital Raising, and will not be responsible to anyone other than President for providing the protections afforded to clients of RBC Capital Markets nor for providing advice to any other person in relation to the Capital Raising, Acquisition or any other matter referred to herein.
Jefferies, which is authorised and regulated in the United Kingdom by the FSA, is acting for President and for no-one else in connection with the Capital Raising, and will not be responsible to anyone other than President for providing the protections afforded to clients of Jefferies nor for providing advice to any other person in relation to the Capital Raising, Acquisition or any other matter referred to herein.
The distribution of this announcement and the offering of the New Ordinary Shares in certain jurisdictions may be restricted by law or regulation. No action has been taken by President, RBC Capital Markets or Jefferies that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by President, RBC Capital Markets and Jefferies to inform themselves about, and to observe such restrictions.
The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")), (II) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS AND/OR (III) PERSONS IN THE UNITED STATES WHO ARE QUALIFIED INSTITUTIONAL BUYERS (WITHIN THE MEANING OF RULE 144A UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT RELATE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
Placees will be deemed to have read and understood this announcement, including the Appendices, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendices. In particular, each such Placee represents, warrants and acknowledges that it is: (i) a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any New Ordinary Shares that are allocated to it for the purposes of its business; and (ii) (a) outside the United States and is subscribing for the New Ordinary Shares in an "offshore transaction" (within the meaning of Regulation S under the Securities Act or (b) is subscribing for the New Ordinary Shares pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act).
This announcement, including the Appendices, is not for distribution, directly or indirectly, in or into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan or any jurisdiction into which the same would be unlawful (each a "Restricted Jurisdiction"). This announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for shares in the capital of President in a Restricted Jurisdiction. In particular, the New Ordinary Shares referred to in this announcement have not been, and will not be, registered under the Securities Act or under the securities legislation of any state of the United States, and may not be offered or sold in the United States absent registration or pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act. Subject to exceptions, the New Ordinary Shares referred to in this Announcement are being offered and sold only outside the United States in accordance with Regulation S under the Securities Act. No public offering of securities of President will be made in connection with the Capital Raising in the United Kingdom, the United States or elsewhere.
The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus or admission document has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the New Ordinary Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan. Accordingly, the New Ordinary Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into or from a Restricted Jurisdiction.
The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendices or this announcement should seek appropriate advice before taking any action.
The New Ordinary Shares to which this announcement relates may be illiquid and/or subject to restrictions on their resale. Prospective subscribers for the New Ordinary Shares offered should conduct their own due diligence on the New Ordinary Shares. If you do not understand the contents of this announcement you should consult an authorised financial adviser.
The New Ordinary Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM. Neither the content of President's website nor any website accessible by hyperlinks on President's website is incorporated in, or forms part of, this announcement.
PART A
Letter from the Chairman
Farm in Agreement in 2 contiguous blocks in Paraguay
Proposed Placing of 115,850,000 New Ordinary Shares at 20 pence per share
Proposed Open Offer of up to 19,998,541 New Ordinary Shares at 20 pence per share
Proposed Subscription of 18,750,000 New Ordinary Shares at 20 pence per share
1. Introduction
President has announced today that it has entered into conditional Farm-In Agreements to acquire certain Paraguayan Concession Interests comprising:
(a) a farm-in to earn up to a 59 per cent. working interest in the Pirity Concession from Pirity Hidrocarburos (a subsidiary of PetroVictory); and
(b) a farm-in to earn up to a 60 per cent. working interest in the Demattei Concession from Crescent Global Oil Paraguay (a subsidiary of Crescent Oil).
Under the terms of the Farm-In Agreements, President will acquire an immediate 11.8 per cent. working interest in the Pirity Concession for an initial consideration of US$10.00 million in cash and a 3 per cent. working interest in the Demattei Concession for an initial consideration of US$2.00 million in cash. The total up-front payment in cash of US$12.00 million will be used to repay back costs to the Vendors in respect of each Paraguayan Concession. It is intended that further interests in each Paraguayan Concession will be acquired incrementally by the Company should it elect to fund the agreed work programmes. A summary of the consideration amounts and working interests of the farm-ins are set out in the table below:
Hot Features
Premium
Pirity Concession Demattei Concession
----------------------------------------- ----------------------------------- --------------------------
Incremental
Work Incremental Interest Approximate Interest Approximate
Programme Earned (%) Cost (US$)(1) Earned (%) Cost (US$)(1)
----------------------------------------- -------------------- ------------- ----------- -------------
Initial payment (Back costs) 11.8% US$10m 3% US$2m
----------------------------------------- -------------------- ------------- ----------- -------------
Seismic programme 5.9% US$10m 7.125% US$10m
----------------------------------------- -------------------- ------------- ----------- -------------
Commencement of the operation
at 5.9% 7.125%
Well 1 US$10m US$10m
Well 1 11.8% 14.25%
----------------------------------------- -------------------- ------------- ----------- -------------
Well 2 11.8% US$10m 14.25% US$10m
----------------------------------------- -------------------- ------------- ----------- -------------
Well 3 11.8% US$10m 14.25% US$10m
----------------------------------------- -------------------- ------------- ----------- -------------
Total (including initial consideration) 59% US$50m 60% US$42m
----------------------------------------- -------------------- ------------- ----------- -------------
Note (1): The approximate costs set out in the table are as agreed under the Pirity Farm-In Agreement and the Demattei Farm-In Agreement between the parties thereto, and are stated on the assumption that there are no cost overruns in relation to each staged work programme. However, the Company is only obliged to pay up to US$50.00 million in respect of the agreed work programme to earn its full 59 per cent. interest in the Pirity Concession and up to US$42.00 million in respect of the agreed work programme to earn its full 60 per cent. interest in the Demattei Concession.
The Board has also announced that the Company proposes a fundraising comprising a firm placing of 28,962,500 New Ordinary Shares, a conditional placing of 86,887,500 New Ordinary Shares, an open offer of up to 19,998,541 New Ordinary Shares and a subscription of 18,750,000 New Ordinary Shares, in each case at 20 pence per share to raise up to GBP30.92 million (approximately US$49.47 million). The Issue Price of 20 pence per New Ordinary Share represents a 20 per cent. discount to the closing middle market price of 25 pence per Existing Ordinary Share on 11 September 2012, being the last Business Day before the announcement of the Capital Raising.
The Capital Raising is being made by way of the Placing to institutional and other investors, the Subscription and an Open Offer, thus allowing the Company's existing Shareholders the opportunity to participate in the fundraising through the Open Offer. The Placing is being undertaken in two stages:
(a) 28,962,500 New Ordinary Shares have already been placed with institutions and other investors pursuant to the Firm Placing and are being issued pursuant to the Directors' existing authorities to allot shares for cash on a non pre-emptive basis, thereby raising gross proceeds of GBP5.79 million (US$9.27 million) for the Company. The Firm Placing Shares are to be admitted to trading on AIM at the time of First Admission, which is expected to take place on 17 September 2012.
(b) The second stage of the Placing will comprise a Proposed Placing of 86,887,500 further New Ordinary Shares. As the allotment and issue of the Firm Placing Shares will have exhausted the Directors' existing authorities to allot shares for cash on a non pre-emptive basis, the General Meeting is being called to seek Shareholders' approval to grant new authorities to enable the Directors, inter alia, to complete the Conditional Placing, thereby raising further gross proceeds of GBP17.38 million (US$27.80 million) for the Company. The Conditional Placing Shares are expected to be admitted to trading on AIM at the time of Second Admission, which is scheduled for 1 October 2012.
Pursuant to the Subscription, Pirity Hidrocarburos (a subsidiary of PetroVictory) has agreed to subscribe for 18,750,000 New Ordinary Shares at the Issue Price. Completion of the Subscription will take place at the time of completion of the Farm-In Agreements and is conditional on, amongst other things, completion of the Farm-In agreements and shareholder approval.
In addition to the Placing and the Subscription, President has launched an Open Offer to issue up to 19,998,541 New Ordinary Shares to Qualifying Shareholders. Qualifying Shareholders may subscribe for Open Offer Shares on the basis of 7 Open Offer Shares for every 45 Existing Ordinary Shares held on the Record Date. Shareholders subscribing for their full entitlement under the Open Offer may also request additional New Ordinary Shares through the Excess Application Facility.
Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of up to GBP4.00 million (up to US$6.40 million) for the Company. The New Ordinary Shares to be issued pursuant to the Open Offer are to be admitted to trading on AIM at the time of Second Admission, which is expected to take place on 1 October 2012.
The gross proceeds of the Placing (comprising of the Firm Placing and the Proposed Placing) and the Subscription of GBP26.92 million (US$43.07 million) and the Open Offer of up to GBP4.00 million (US$6.40 million) will be used principally to fund the obligations of the Company to acquire its initial interests in the Paraguayan Concessions and to fund the initial parts of the work programmes as set out in the provisions of the Farm-In Agreements. The remaining proceeds will be used for incremental exploration and development work on President's Argentinian assets, including the new concessions that were recently awarded at Matorras and Ocultar, new wells in Louisiana, pursuing further business development opportunities and to cover the expenses associated with the Placing, Subscription and Open Offer.
The Proposed Placing, Subscription and Open Offer are each conditional upon, inter alia, Shareholder approval which will be sought at the General Meeting to be held at 11.00 a.m. on 28 September 2012. Should Shareholder approval not be obtained at the General Meeting, the Proposed Placing, Subscription and Open Offer will not proceed. In addition, the Subscription is conditional on the completion of the Farm-In Agreements. Should the Farm-In Agreements not close, the Subscription will not proceed.
Under the terms of the Farm-In Agreements, the Company has agreed to pay US$3.00 million of the up-front payment to acquire its initial interests in the Paraguayan Concessions, at the time of First Admission and with the balance due on completion. Accordingly, the Company will use part of the funds raised from the Firm Placing to pay the US$3.00 million deposit under the Farm-In Agreements and this amount will not be returned in the event that the deposit is not refunded to the Company. Should any of the conditions to the Farm-In Agreements not be satisfied or waived by the Company then completion of the Acquisition will not take place and, in such eventuality, the Company will seek to return funds invested in the Company pursuant to the Placing and/or Open Offer.
The Board also proposes to change the name of the Company from President Petroleum Company PLC to President Energy PLC, pursuant to a Resolution being proposed at the General Meeting.
2. Information on President Petroleum Company PLC
President Petroleum Company PLC is a UK AIM listed oil and gas company, with producing licences in Argentina and Louisiana, USA, and with other exploration licences in South Australia.
President's stated aim is to achieve growth through a twin track strategy of the acquisition of new oil and gas assets and the organic development of the Group's existing assets, with a view to creating a mid-cap exploration and production company with critical mass and a strategic presence in its key areas of interest.
In July 2011 President acquired a 50 per cent. working interest in the Puesto Guardian Concession in the Salta Province of Argentina. This entry into Argentina was seen as the first stage in developing a South American business and President is seeking to build upon its regional presence. On 20 August 2012, the Company announced that the Government of Salta Province, Argentina, had awarded to President two new exploration licences called Matorras and Occultar, that are adjacent to the Puesto Guardian Concession and which cover a combined area of 2,203 km(2) . President also announced that it had separately entered into an agreement with its partner in Puesto Guardian to acquire for nominal value the entire interest in Matorras and Ocultar, with any such transfer, however, being subject to prior consent and approval of the regulatory authorities in the Province of Salta.
President is further expanding its regional presence by entering into neighbouring Paraguay, by farming into two existing oil and gas concessions, the Pirity Concession and the Demattei Concession. The entry will be funded using the proceeds of the Capital Raising.
Further information on President Petroleum Company PLC's existing strategy, current assets, reserves and resources and financial reports, inter alia, can be found on the Company's website, www.presidentpc.com.
3. Background to and reasons for the Capital Raising and the Acquisition
President has secured farm-in agreements as operator of the Pirity and Demattei Concessions which combine to cover almost all of the prospective Pirity Basin (16,000 km(2) ) in the Chaco region of Paraguay, which is virtually undrilled and a direct extension of the proven Olmedo basin on the Argentine side of the country border. President has developed the opportunity as a direct consequence of the regional knowledge and experience gained in the adjacent and contiguous Olmedo basin of Argentina. President has a deep understanding of the geology of the basin and believes these licences to be highly prospective. Whereas the Argentine Olmedo sector has been continuously explored and has produced oil and gas over the past 30 years (over 150 mmboe of cumulative production to date), the attraction of Paraguay is that the Pirity Basin (which contains large undrilled structures) has remained fallow just a few kilometres to the east for political reasons.
The Pirity Basin acreage (comprising the Pirity and Demattei blocks) is currently owned by two US private companies, Pirity Hidrocarburos (a subsidiary of PetroVictory) and Crescent Global Oil Paraguay (a subsidiary of Crescent Oil). PetroVictory and Crescent Oil are both substantially under the control of the same US citizens. Both of the Paraguayan Concessions have been the subject of litigation over recent years, although this litigation has now been settled in full. Following disputes which arose between the Vendors of the Paraguayan Concession Interests and the Paraguayan Ministry of Public Communications and Works, the Government of Paraguay issued Decrees in 2009 and 2010 declaring that the Pirity Concession and Demattei Concession had expired. Accordingly, the Vendors of the Paraguayan Concession Interests initiated legal proceedings to revoke the Decrees and re-instate the Paraguayan Concessions and thereby bring them back into full force and effect. Earlier this year, settlement agreements were entered into in relation to both of the Paraguayan Concessions, pursuant to which the parties agreed to settle all outstanding claims and thereby settle the litigation proceedings between them. In August 2012, Court Orders were issued by the Supreme Court of Paraguay, pursuant to which the settlement agreements became final and binding and all outstanding litigation was settled in full and is no longer subject to any right of appeal by the parties.
Over the past seven years, Crescent Oil has commissioned several extensive geological studies which evaluate the hydrocarbon potential of the Pirity Basin. President estimates that the 16 identified prospects have a gross risked recoverable resource potential greater than 150 mmb. A 3D seismic programme is planned to further de-risk the prospect inventory and a competent person's report is expected to be commissioned following the planned seismic programme.
Following a competitive process, with a number of parties expressing an interest in acquiring the Paraguayan Concessions, President has successfully agreed to farm into the two blocks covering the entire Paraguayan Pirity Basin. The Acquisition of the Paraguayan Concession Interests will comprise:
(c) a farm-in to earn up to a 59 per cent. working interest in the Pirity Concession (Law 3479/08) from Pirity Hidrocarburos (a subsidiary of PetroVictory); and
(d) a farm-in to earn up to a 60 per cent. working interest in the Demattei Concession (Law 3549/08) from Crescent Global Oil Paraguay (a subsidiary of Crescent Oil).
Each block is approximately 8,000 km(2) in size. In the Pirity Block adjacent to the Argentine border,
President will earn its full 59 per cent. working interest in return for funding a seismic programme and a staged three well drilling programme for a capped investment of US$50.00 million, including back costs incurred by the Vendor of US$10.00 million in the manner outlined above. In the adjacent Demattei Block, President will earn its full 60 per cent. working interest in return for funding a seismic programme and a staged three well drilling programme for a capped investment of US$42.00 million, including back costs incurred by the Vendor of US$2.00 million, again in the manner outlined in the above table. President has negotiated certain provisions to limit risk exposure and the ability to retain or assign any of its interests in the event that it elects not to complete in full the respective drilling campaign on the Pirity Concession and the Demattei Concession, respectively.
In addition to the Placing and Open Offer, Pirity Hidrocarburos has irrevocably agreed to subscribe for 18,750,000 New Ordinary Shares at the Issue Price for GBP3.75 million.
Under the terms of the Farm-In Agreements, President will acquire an immediate 11.8 per cent. working interest in the Pirity Concession for an initial consideration of US$10.00 million in cash and a 3 per cent. working interest in the Demattei Concession for an initial consideration of US$2.00 million in cash. The total up-front payment in cash of US$12.00 million will be used to repay back costs to the Vendors in respect of each Paraguayan Concession. Further interests in each Paraguayan Concession may then be acquired incrementally by the Company should it elect to fund the agreed work programmes.
US$3.00 million of the US$12.00 million up-front payment is due to be paid under the terms of the Farm-In Agreements shortly after First Admission, by way of a deposit to secure the farm-ins. This deposit will be retained by the Vendors in the event that the Company fails to pay the US$9.00 million balance of the up-front payment at the time of completion. The Farm-In Agreements are subject to various conditions including, inter alia Paraguayan Government approvals of the assignment to President of the participating interests and confirmation of the terms of the Paraguayan Concessions, in the case of Demattei Concession only the renewal/restatement of the environmental licences being given by the Paraguayan Environmental Agency which are required for the commencement of works on the Paraguayan Concessions and confirmation that all court decisions, documents, notices and other filings have been completed in respect of the litigation proceedings affecting each Paraguayan Concession.
Should any of the conditions to the Farm-In Agreements not be satisfied or waived by the Company then completion of the Acquisition will not take place. In such eventuality, the Company will seek to return to Shareholders those funds invested in the Company pursuant to the Placing and/or Open Offer in as tax efficient a manner as possible. Should the Company be unable to pay the US$9.00 million balance of the up-front payment due on completion then the US$3.00 million deposit will not be refunded to the Company and therefore will not be returned to placees who have invested as part of the Firm Placing.
4. About Paraguay
Paraguay moved to a democratic political system in 1992 following 35 years of dictatorship under General Stroessner. The right-wing Colorado party held power for the succeeding years until the 2008 election of Fernando Lugo, the first time power had passed peacefully to an opposing party. In June 2012, Fernando Lugo was impeached under the Paraguayan constitution, leading to the incumbent Vice-President Federico Franco becoming President. Elections are scheduled for April 2013 andPresident Franco has begun his presidency by demonstrating his support for foreign investment by, inter alia, approving the construction of Rio Tinto's proposed US$3.5 billion aluminium plant and expressing support for the oil and gas industry. Regional oil and gas companies such as YPF and UK listed Amerisur Resources PLC already operate in Paraguay, and a number of other companies have expressed interest in entering into the country. The UK Government has also recently announced the re-opening of the British Embassy in Asunción, which is expected to accelerate the unlocking of commercial opportunities for British companies in Paraguay.
Paraguay is a fast-growing economy, experiencing average GDP growth of 9.4 per cent. in 2010-2011. Paraguay is governed by particularly favourable hydrocarbon laws. A Tax and Royalty system provides an initial four year exploration period (which can be extended by drilling one well per year) and a twenty year exploitation period which may be extended by ten years. Tax is levied at a flat 10 per cent. rate on business profits whilst royalties are levied on production on a sliding scale from 10 per cent. for production of less than 5,000 bopd to 14 per cent. for production over 50,000 bopd. Paraguay does not currently have any hydrocarbon production and the country imports approximately 27,000 bopd. Management believes that the Paraguayan Government is eager to establish domestic production, as demonstrated by Petropar expressing a written interest to offtake up to 27,000 bopd at international prices from any future production at the farm-in blocks.
5. Current Trading and Prospects
On 11 May 2012, the Company announced its results for the year ended 31 December 2011. Subsequently, the Company has provided corporate and operational updates, including the Trading and Operational Update dated 3 August 2012. Group production for the 6 months to 30 June 2012 averaged 315 boepd, evenly split between the Group's Argentine and Louisiana operations. Average realised prices per barrel during the period were US$72 in Argentina and US$109 in Louisiana. Due to drilling activity during the period, group production for the month of June 2012 was 430 boepd, principally comprising oil production in Argentina of 235 bopd and in Louisiana of 195 boepd. Net debt position at 30 June 2012 was approximately US$3.5 million comprising cash (US$1.1 million) and debt (US$4.6 million). The Company and other members of the Group's outstanding indebtedness as at 11 September 2012 under the Existing LCM Loan Facility was US$9 million.
In Argentina, a workover and frac programme has commenced, with the first frac timed for the fourth quarter of 2012. Significant effort is being made in seismic reprocessing and reservoir studies which will provide the foundation for the continued development of drilling activity in 2013. In Louisiana, a new well is planned at East White Lake for next month, and smaller recompletions and workovers are anticipated. On 20 August 2012, President announced that the Government of Salta, Argentina had awarded the Company in Puesto Guardian two new exploration concession areas surrounding Puesto Guardian, namely Matorras and Ocultar. President will be the operator of the two concessions and has the right to acquire all of its partner's interest in the concessions for nominal value (subject to the prior consent and approval of the regulatory authorities in the Province of Salta). These areas cover a combined area of 2,203 km(2) partly surrounding the 633 km(2) Puesto Guardian Concession. Matorras (1,469 km(2) ) is on the same structural trend as the palaeozoic prospect under Martinez del Tineo that was the subject of the GCA audited resource report announced by the Company on 23 January 2012. In the palaeozoic prospect under Martinez del Tineo, GCA assessed gross unrisked mid case prospective gas and condensate resource of 570 bcf and 14.5 million barrels of condensate.
6. Use of Proceeds
The net proceeds of the Placing, Subscription and Open Offer will be used principally to fund the Company's obligations to acquire its initial interests in the Paraguayan Concessions and the initial work programmes for the Pirity Concession and Demattei Concession. In addition, the remaining funds will be used for incremental exploration and development work on President's Argentinian assets (including the recently awarded new licences), building the regional delivery team, pursuing regional business development opportunities, incremental new drilling activity in Louisiana and to cover the expenses associated with the Placing, Subscription and Open Offer, broken down as follows:
Use of Funds US$ million
------------------------------------------------- -----------
Paraguay(1) 37
Back costs (earn 11.8 per cent. working interest
in the 12
Pirity Block and 3 per cent. working interest
in the
Demattei Block)
Seismic on the Pirity Block ($10 million) and
the Demattei 12
Block ($2 million)
Corporate set-up and business development 3
Well 1 on the Pirity Block 10
Argentina 2
Exploration work programme - new acreage 2
USA (Louisiana) 1
New wells 1
Corporate 2
Deal Expenses(2) 2
Sub-Total 42
-----------
Loan repayment(3) 9
TOTAL 51
================================================= ===========
Note (1): The further work programme in Paraguay is to be funded from cash flow, farm-outs or later corporate activity;
note (2): These are estimated costs only; and note (3): The loan repayment relates to the LCM Loan Facility as detailed below.
7. Levine Capital Management Limited
LCM is an entity beneficially owned by Peter Levine, the Company's Executive Chairman, and is the Company's largest shareholder. LCM and the Related Parties, who are deemed by the UK Panel on Takeovers and Mergers to be acting in concert with LCM for the purpose of the City Code on Takeovers and Mergers, currently hold 37,714,525 Existing Ordinary Shares in aggregate, representing approximately 29.3 per cent. of the Company's Existing Ordinary Shares.
LCM (through its subsidiary, IYA Global Limited) has made available to President the Existing LCM Loan Facility until 25 October 2013, under which US$9.00 million is currently outstanding. The provision of the Existing LCM Loan Facility has enabled President to continue investing in business development and the ongoing operational programme at Puesto Guardian.
LCM and the Related Parties (as well as the remaining Directors) have irrevocably undertaken to vote or procure to vote in favour of the Resolutions 1 and 2 relating to the Placing, Subscription and Open Offer in respect of 37,714,525 Existing Ordinary Shares, in aggregate, representing approximately 29.3 per cent. of the existing issued ordinary share capital of the Company.
As part of the Placing, LCM has irrevocably agreed to subscribe for 31,250,000 Placing Shares at the Issue Price for GBP6.25 million. This will comprise the subscription by LCM of 7,812,500 Firm Placing Shares which will be settled as to GBP1.56 million at the time of First Admission, and of 23,437,500 Conditional Placing Shares which will be settled as to GBP1.56 million at the time of Second Admission and as to GBP3.13 million on 31 December 2012.
As part of the Proposals, the Company will also repay the US$9.00 million outstanding under the Existing LCM Loan Facility, in accordance with its terms. LCM has also agreed to provide the New LCM Loan Facility, under which, a US$15.00 million committed line of credit is available to the Company for a period of two years. Loan monies may be drawn down and repaid under the New LCM Loan Facility at the Company's election and provides additional operational flexibility going forwards. Interest accrues on the loan at 10 per cent. per annum on amounts drawn under the New LCM Loan Facility and 5 per cent. per annum on the undrawn balance of the facility. Following LCM's participation in the Placing, LCM will have invested over US$30.00 million in President.
8. The Subscription
Pirity Hidrocarburos has conditionally agreed to subscribe for the Subscription Shares at the Issue Price, raising a further GBP3.75 million for the Company.
The Subscription Shares subscribed for by Pirity Hidrocarburos will represent 6.6 per cent. of the Enlarged Share Capital immediately following Third Admission, assuming a full take up under the Open Offer. The settlement of the Subscription will take place on the completion of the Acquisition. Pirity Hidrocarburos has entered into a lock-up agreement with the Company pursuant to which it has agreed not to offer, dispose of, directly or indirectly, any of the Subscription Shares held by it for a period of 6 months from date of Third Admission. Should the completion of the Acquisition not occur, Pirity Hidrocarburos will not subscribe for the Subscription Shares and the Company will not receive the subscription proceeds from Pirity Hidrocarburos.
9. Directors' shareholdings
Immediately following Third Admission, it is expected that the Directors will have the following beneficial shareholdings:
Total no. of Ordinary
Shares Percentage of the Enlarged
held following Share Capital immediately
Third Admission following Third Admission*
-------------------------------- --------------------- --------------------------
Peter Levine 68,523,525 24.2
-------------------------------- --------------------- --------------------------
John Andrew Hamilton 300,000 0.11
-------------------------------- --------------------- --------------------------
Benjamin David Wilkinson 40,000 0.01
-------------------------------- --------------------- --------------------------
David Anthony Lawson Jenkins 75,000 0.03
-------------------------------- --------------------- --------------------------
Michael David Cochran 100,000 0.04
-------------------------------- --------------------- --------------------------
David Christopher Wake-Walker 253,804 0.09
-------------------------------- --------------------- --------------------------
*Assuming full take of entitlements under the Open Offer
In addition to the shares subscribed for by LCM in the Placing referred to above, David Wake-Walker has agreed to subscribe for 125,000 Placing Shares and David Jenkins has agreed to subscribe for 50,000 Placing Shares.
10. Related Party Transactions
The subscription by LCM in the Placing at the Issue Price and the provision of the New LCM Loan Facility are each classified as a related party transaction under the AIM Rules. Accordingly, the Directors, excluding Peter Levine, John Hamilton, Benjamin Wilkinson and Michael Cochran (who are not considered independent by virtue of their respective relationships with LCM), consider, having consulted with RBC, the Company's nominated adviser, that the terms of LCM's participation in the Placing and the New LCM Loan Facility are each fair and reasonable insofar as independent Shareholders are concerned.
11. Directors' recommendation
The Directors consider the Proposals to be in the best interests of the Company and its Shareholders as a whole.
Accordingly the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting. Certain Shareholders (including Levine Capital Management and the Directors) have irrevocably undertaken to vote or procure to the voting in favour of the Resolutions 1 and 2 relating to the Placing, subscription and Open Offer in respect of 48,982,533 Existing Ordinary Shares, in aggregate, representing approximately 38.1 per cent. of the existing issued ordinary share capital of the Company.
PART B
Expected Timetable of Principal Events
2012
Record Date for entitlement under the Open Offer close of business
on
7 September
Announcement of the Proposals 12 September
Posting of the Circular, Forms of Proxy and, to 12 September
Qualifying non-CREST
Shareholders only, the Application Forms
Open Offer Entitlements and Excess CREST Open 8.00 a.m. on 13
Offer Entitlements credited to stock accounts September
in CREST of Qualifying CREST Shareholders
First Admission effective and dealings in the 8.00 a.m. on 17
Firm Placing Shares expected to commence on AIM September
Expected date for crediting of Firm Placing Shares 8.00 a.m. on 17
in uncertificated form to CREST stock accounts September
Expected date of despatch of share certificates 24 September 2012
in respect of Firm Placing Shares in certificated
form
Latest recommended time and date for requesting 4.30 p.m. on 24
withdrawal of Open Offer Entitlements and Excess September
CREST Open Offer Entitlements from CREST
Latest time for depositing Open Offer Entitlements 3.00 p.m. 25 September
and Excess CREST Open Offer Entitlements into
CREST
Latest time and date for receipt of Forms of Proxy 11 a.m. on 26 September
Latest time and date for splitting Application 3.00 p.m. 26 September
Forms (to satisfy bona fide market claims)
Latest time and date for receipt of completed 11.00 a.m. on 28
Application Forms and payment in full under the September
Open Offer or settlement of relevant CREST instruction
(as appropriate)
General Meeting 11.00 a.m. on 28
September
Expected time of announcement of results of the by 4.30 p.m. on
General Meeting 28 September
Expected time and date of announcement of results 7.00 a.m. on 1 October
of the Placing and Open Offer
Second Admission effective and dealings in the 8.00 a.m. on 1 October
Conditional Placing Shares and Open Offer Shares
expected to commence on AIM
Expected date for crediting of Conditional Placing 8.00 a.m. on 1 October
Shares and Open Offer Shares in uncertificated
form to CREST stock accounts
Expected date of despatch of share certificates 8 October
in respect of Conditional Placing Shares and Open
Offer Shares in certificated form
Third Admission Following completion
of the Farm-In Agreements
Notes:
(1) If you have any questions on the procedure for acceptance and payment, you should contact Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, telephone: 0871 384 2050 from the UK or +44 121 415 0259 from overseas. Calls to the 0871 384 2050 number cost 8 pence per minute (excluding value added tax) plus your service provider's network extras. Calls to the +44 121 415 0259 number will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Please note that Equiniti cannot provide financial advice on the merits of the Capital Raising or as to whether or not you should take up your entitlement.
(2) The dates set out in the Expected Timetable of Principal Events above and mentioned throughout this document may be adjusted by President in which event details of the new dates will be notified to AIM and, where appropriate, to Shareholders.
(3) All references to time in this document are to time in London.
PART C
Risk Factors
An investment in the New Ordinary Shares is highly speculative and involves a high degree of risk due to the nature of oil and gas exploration. Before making any investment decision, prospective investors should carefully consider all the information contained in this document including, in particular, the risk factors described below. In addition to the usual risks associated with an investment in an oil and gas exploration business, the Directors believe that, in particular and in no order of priority, the following risk factors should be considered. Other factors relate principally to an investment in the New Ordinary Shares. It should be noted that this list is not exhaustive and that other risk factors may apply. Additional risks and uncertainties not currently known to the Directors, or that the Directors currently deem immaterial, may also have an adverse effect on the Group's business, financial condition and results of operations.
An investment in the Company may not be suitable for all recipients of this announcement. Investors are advised to consult an independent financial adviser authorised under the FSMA who specialises in advising on the acquisition of shares and other securities before making a decision to invest.
Risks related to the oil and gas industry
Oil and gas pricing and demand
The price of and demand for oil and gas is highly dependent on a number of factors, including worldwide supply and demand levels, energy policies, weather, competitiveness of alternative energy sources, global economic and political developments and the volatile trading patterns of the commodity futures markets. Natural gas prices also continue to be highly volatile. Changes in oil and gas prices can impact on the Company's valuation of reserves. International oil and gas prices have fluctuated widely in recent years and may continue to do so in the future. Lower oil and gas prices will adversely affect the Company's revenues, business or financial condition and the valuation of its reserves. In periods of sharply lower commodity prices, the Company may curtail production and capital spending projects and may defer or delay drilling wells because of lower cash flows. In addition, the demand for and supply of oil and gas worldwide may affect the Company's level of production.
Exploration, production and general operational risks
The exploration for and production of oil and other natural resources is speculative and involves a high degree of risk. In particular, the operations of the Company may be disrupted by a variety of risks and hazards which are beyond the control of the Company, including environmental hazards, industrial accidents, occupational and health hazards, technical failures, labour disputes, earthquakes, unusual or unexpected geological formations, flooding, earthquake and extended interruptions due to inclement or hazardous weather conditions, explosions and other accidents. These risks and hazards could also result in damage to, or destruction of wells or production facilities, personal injury, environmental damage, business interruption, monetary losses and possible legal liability.
Delays in the construction and commissioning of projects or other technical difficulties may result in the Company's current or future projected target dates for production being delayed or further capital expenditure being required. If the Company fails to meet its work and/or expenditure obligations, the rights granted therein will be forfeited and the Company may be liable to pay large sums, which could jeopardise its ability to continue operations.
Increase in drilling costs and the availability of drilling equipment
The oil and gas industry historically has experienced periods of rapid cost increases. Increases in the cost of exploration and development would affect the Company's ability to invest in prospects and to purchase or hire equipment, supplies and services. In addition, the availability of drilling rigs and other equipment and services is affected by the level and location of drilling activity around the world. An increase in drilling operations may reduce the availability of equipment and services to the Company. The reduced availability of equipment and services may delay its ability to exploit reserves and adversely affect the Company's operations and profitability.
Risks related to the Group
Estimation of reserves, resources and production profiles
The estimation of oil and gas reserves and their anticipated production profiles involves subjective judgements and determinations based on available geological, technical, contractual and economic information. They are not exact determinations. In addition, these judgments may change based on new information from production or drilling activities or changes in economic factors, as well as from developments such as acquisitions and dispositions, new discoveries and extensions of existing fields and the application of improved recovery techniques. Published reserve estimates are also subject to correction for errors in the application of published rules and guidance.
The reserves, resources and production profile data contained in this document are estimates only and should not be construed as representing exact quantities. They are based on production data, prices, costs, ownership, geophysical, geological and engineering data and other historical and current information assembled by the Company and third parties. The estimates may prove to be incorrect and potential investors should not place undue reliance on the forward-looking statements contained in this document concerning the Group's reserves and resources or production levels.
If the assumptions upon which the estimates of the Group's hydrocarbon reserves, resources or production profiles have been based prove to be incorrect the Group may be unable to recover and produce the estimated levels or quality of hydrocarbons set out in this document and the Group's business, prospects, financial condition or results of operations could be materially adversely affected.
Delays in production, marketing and transportation
Various production, marketing and transportation conditions may cause delays in oil production and adversely affect the Company's business. Drilling wells in areas remote from distribution and production facilities may delay production from those wells until sufficient reserves are established to justify construction of the necessary transportation and production facilities. The Company's inability to complete wells in a timely manner would result in production delays.
In addition, marketing demands, which tend to be seasonal, may reduce or delay production from wells. The marketability and price of oil and natural gas that may be acquired or discovered by the Company will be affected by numerous factors beyond the control of the Company. The ability of the Company to market its natural gas may depend upon its ability to acquire space on pipelines that deliver natural gas to commercial markets. The Company is also subject to market fluctuations in the prices of oil and natural gas, deliverability uncertainties related to the proximity of its reserves to adequate pipeline and processing facilities and extensive government regulation relating to price, taxes, royalties, licences, land tenure, allowable production, the export of oil and natural gas and many other aspects of the oil and natural gas business. Moreover, weather conditions may impede the transportation and delivery of oil by sea.
Decommissioning costs
The Company may become responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which it may use for production of oil and gas. Abandonment and reclamation of facilities and the costs associated therewith is often referred to as "decommissioning". There are no immediate plans to establish a reserve account for these potential costs. Rather, the costs of decommissioning are expected to be paid from the proceeds of production in accordance with the practice generally employed in onshore and offshore oilfield operations. Should decommissioning be required, the costs of decommissioning may exceed the value of reserves remaining at any particular time to cover such decommissioning costs. The Company may have to draw on funds from other sources to satisfy such costs. The use of other funds to satisfy such decommissioning costs could have a materially adverse effect on the Company's financial position and future results of operations.
Third party contractors and providers of capital equipment can be scarce
The Group contracts or leases services and capital equipment from third party providers. Such equipment and services can be scarce and may not be readily available at times and places required. In addition, costs of third party services and equipment have increased significantly over recent years and may continue to rise. Scarcity of equipment and services and increased prices may in particular result from any significant increase in exploration and development activities on a region by region basis which might be driven by high demand for oil and gas. In the regions in which the Group operates there is significant demand for capital equipment and services. The unavailability and high costs of such services and equipment could result in a delay or restriction in the Group's projects and adversely affect the feasibility and profitability of such projects and therefore have an adverse effect on the Group's business, financial condition, results of operations and prospects.
Significant competition
The Company's competitors include major and independent oil and gas companies. The oil and gas business is highly competitive in the search for and acquisition of reserves and in the gathering and marketing of oil and gas production and in the recruitment and employment of qualified personnel. In addition, the Company will compete with oil and gas companies in the bidding for exploration and production licences. Some of the Company's competitors have significantly greater financial, technical and other resources than it and are able to devote greater resources to the development of their businesses. If the Company is unable successfully to compete, its business will suffer.
Limited diversification
Generally, risk is reduced through diversification. Diversification is maximised by drilling a large number of wells over a large and geographically diverse areas of prospects having different geological characteristics. The drilling and development programme, therefore, will have only a limited amount of diversification with a correspondingly higher degree of financial risk for investors.
Requirements for permits and licences
The operations of the Company require licences, permits and in some cases assignments or renewals of existing licences and permits from various governmental authorities. Governmental approvals, licences and permits are subject to the discretion of the applicable governments or governmental offices, and are outside the control of the Company. The Company's ability to obtain, sustain, renew or assign such licences and permits on acceptable terms is therefore subject to the discretion of the applicable governments as well as changes in regulations and policies. A failure to obtain, sustain, renew or assign these where needed could result in the dilution or forfeiture of interests held by the Company which could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.
Health, Safety, Environment and Security ("HSES")
The range of the Group's operated and joint venture production operations globally means that the Group's HSES risks cover a wide spectrum. These risks include major process safety incidents; failure to comply with approved policies; effects of natural disasters and pandemics; social unrest; civil war and terrorism; exposure to general operational hazards; personal health and safety; and crime. The consequences of such risks materialising can be injuries, loss of life, environmental harm and disruption to business activities. Depending on cause and severity, the materialisation of such risks may affect the Group's reputation, operational performance and financial position.
In addition, failure by the Group to comply with applicable legal requirements or recognised international standards may give rise to significant liabilities. HSES laws and regulations may over time become more complex and stringent or the subject of increasingly strict interpretation or enforcement. The terms of licences may include more stringent HSES requirements. The obtaining of exploration, development or production licences and permits may become more difficult or be the subject of delay by reason of governmental, regional or local environmental consultation, approvals or other considerations or requirements. These factors may lead to delayed or reduced exploration, development or production activity as well as to increased costs.
Environmental risk and insurance coverage
There are significant exploration and operating risks associated with drilling oil and gas wells, including blowouts, cratering, sour gas releases, uncontrollable flows of oil, natural gas or well fluids, adverse weather conditions, and fire, all of which can result in accidental spills, leakages or discharges of harmful liquids and toxic gases. The occurrence of any of these incidents can result in substantial losses to the Group due to injury or loss of life, damage to or destruction of the Company's oil and gas wells, pollution or other environmental damage. Damages occurring as a result of such risks can give rise to claims against the Company or a member of its Group, and can result in the Company's targets for drilling or production being delayed or halted.
Although the Company will exercise due care in the conduct of its business and will maintain what it believes to be customary insurance coverage for companies engaged in similar operations, the Company is not fully insured against all risk in its business. The occurrence of a significant event against which the Company is not fully insured could have a material adverse effect on its operations and financial performance. In addition, in the future some or all of the Company's insurance coverage may become unavailable or prohibitively expensive.
Working Capital
The Company may need to raise additional funds in the future in order to develop further exploration and development programmes including funding the work programme for the Pirity Block and the Demattei Block. Additional equity financing may be dilutive to Shareholders and could contain rights and preferences superior to those of the New Ordinary Shares. Debt financing may involve restrictions on the
Company's financing and operating activities. In either case, additional financing may not be available to the Company on acceptable terms. If the Company is unable to raise additional funds as needed, the scope of its operations may be reduced and or its interest in concessions diluted or expired and, as a result, the Company may be unable to fulfil its long-term expansion programme.
Foreign currency exchange rates
As an international operator, the Company's business transactions may not be denominated in the same currencies. To the extent that the Company's business transactions are not denominated in the same currency, the Company is exposed to foreign currency exchange rate risk. In addition, holders of the Company's shares are subject to foreign currency exchange rate risk to the extent that its business transactions are denominated in currencies other than the US dollar. Fluctuations in foreign currency exchange rates may adversely affect the Company's profitability. At this time, the Company does not plan actively to hedge its foreign currency exchange rate risk.
Risks related to the Acquisition
Conditionality of the Farm-In Agreements
The Company has entered into the Farm-In Agreements, pursuant to which it (or another member of its Group) will acquire the Paraguayan Concession Interests. US$3 million of the US$12 million up-front payment is due to be paid under the terms of the Farm-In Agreements shortly after First Admission, by way of a deposit to secure the farm-ins. This deposit will be retained by the Vendors in the event that the Company fails to pay the US$9 million balance of the up-front payment at the time of completion. The Farm-In Agreements are subject to various conditions including, inter alia, Paraguayan Government approvals of the assignment to the Company of the participating interests and confirmation of the terms of the Paraguayan Concessions, the renewal/restatement of the environmental licences being given by the Paraguayan Environmental Agency which are required for the commencement of works on the Paraguayan Concessions, certificates of good standing being issued by the Paraguayan Ministry of Public Works and Communications in respect of each Paraguayan Concession and confirmation that all court decisions, documents, notices and other filings have been completed in respect of the litigation proceedings affecting each Paraguayan Concession. The Paraguayan Government approvals, renewals/ restatements and confirmations may take a longer than expected period of time to obtain which could delay completion of the Acquisition and/or may have occurred by the time of the completion of the
Proposed Placing, Subscription and Open Offer. In addition, there can be no assurance that the conditions to the Farm-In Agreements will be satisfied or waived or that the Acquisition will be completed, the occurrence of which could have a material adverse effect on the share price of the Company.
Counterparty risk to the Farm-In Agreements
The Farm-In Agreements contain, inter alia, certain warranties and indemnities and ongoing obligations of the Vendors of the interests which they hold in the Paraguayan Concessions. In addition, the Joint Operating Agreements also contain certain ongoing obligations. Pirity Hidrocarburos and Crescent Global Oil Paraguay are private companies registered in Paraguay and the only assets they hold are believed to comprise of the interests they hold in the Paraguayan Concessions. Whilst the parent companies of Pirity Hidrocarburos and Crescent Global Oil Paraguay (being Petro Victory and Crescent Oil, respectively) have agreed to guarantee the obligations of the Vendors under the Farm-In Agreements, the parent companies are also private companies which may also have limited assets. Accordingly, there can be no guarantee that the Group will be able to recover all or any of the losses it may incur as a result of any breach of those warranties, indemnities or other ongoing obligations. If this occurred then the Group's business, financial condition, results of operations and prospects may be adversely affected as a result.
Joint Venture partners
Pirity Hidrocarburos (in respect to the Pirity Concession) and Crescent Global Oil Paraguay (in respect to the Demattei Concession) will hold majority working interests in each respective Paraguayan Concession until the Company has earned up to its full working interests. While the Company is the operator of each Paraguayan Concession and maintains good working relationships with each respective partner, certain decisions, approvals and other actions require the vote of both the Company and the respective partner. Any non-compliance by or disagreement with the partners may lead to delays in the pace of the work programmes that may be detrimental to the project or may otherwise have adverse consequences for the Company.
In accordance with the terms of the Farm-In Agreements, the Company is obliged to pay up to US$50 million in respect of the agreed work programme to earn its full 59 per cent. interest in the Pirity Concession and up to US$42 million in respect of the agreed work programme to earn its full 60 per cent. interest in the
Demattei Concession. The Company's financial obligations under each Farm-In Agreement are based on cost approximations which have been agreed by the parties thereto, and are stated on the assumption that there are no cost overruns in relation to each staged work programme. A cost overrun in relation to either Paraguayan Concession will be split equally and will be payable by the parties to the Farm-In Agreements respectively. The occurrence of cost overruns could however mean that the Company and its respective partners may need to obtain further financing to meet their financial obligations under the staged work programmes. In contrast to President, both Pirity Hidrocarburos and Crescent Global Oil Paraguay are private companies and are unable to access the public markets for capital. Liquidity and cash flow problems encountered by the Company's farm-in partners and/or any non-compliance by the Company's partners may lead to a delay in the agreed work programmes which could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.
Title, rights and interests
The operations of the Company require the title to, and rights and interests in, its licences and permits to be in good standing in order to carry on its intended exploration and exploitation activities. Both of the Paraguayan Concessions have been the subject of litigation over recent years, although this litigation has now been settled in full. Following disputes which arose between the Vendors of the Paraguayan Concession Interests and the Paraguayan Ministry of Public Communications and Works, the Government of Paraguay issued Decrees in 2009 and 2010 declaring that the Pirity Concession and Demattei Concession had expired. Accordingly, the Vendors of the Paraguayan Concession Interests initiated legal proceedings to revoke the Decrees and re-instate the Paraguayan Concessions and thereby bring them back into full force and effect. Earlier this year, settlement agreements were entered into in relation to both of the Paraguayan Concessions, pursuant to which the parties agreed to settle all outstanding claims and thereby settle the litigation proceedings between them. In August 2012, Court Orders were issued by the Supreme Court of Paraguay, pursuant to which the settlement agreements became final and binding and all outstanding litigation was settled in full and is no longer subject to any right of appeal by the parties.
Whilst the Company has investigated and obtained a legal opinion on the title to, and rights and interests in, its licences and permits with respect to the Paraguayan Concessions, and is satisfied that the settlement agreements are final and binding, such licences and permits may be subject to undetected defects and future unforeseen events including action by third parties, changes in Paraguayan laws and regulations or a further change in the Paraguayan Government following the appointment of a new Paraguayan President after the next presidential elections scheduled for April 2013. If a defect or unforeseen event should occur, it is possible that President may lose all or part of its interest in the licence or permit to which the defect relates and its exploration and exploitation programmes and prospects may accordingly be adversely affected.
Native rights of landowners
The Paraguayan Concession Interests are in relation to the Pirity Block and the Demattei Block which are located in Paraguay's occidental region which is made up of large privately held ranches. The operation of the agreed work programmes for each Paraguayan Concession Interest requires the approval and cooperation of each landowner where the blocks are located. Each of the Company's partners have maintained working relationships and dialogue with each landowner and the outcome of early discussions regarding the seismic and drilling programmes have been positive. It is normal practice to not have formal written agreements in place with landowners at the current stage of the work programmes, and obtaining approval is considered a straightforward process. There can be no guarantee, however, that the approval and co-operation of each landowner will be forthcoming, if required. Should this occur, the Paraguayan government can be requested by the concession holder of the relevant Paraguayan Concession to expropriate private properties where the prospection, exploration and exploitation of the land is declared of benefit to the public. In the unlikely outcome that the Company is unable to obtain the approval and co-operation of each landowner and there is an unsuccessful outcome from an application to expropriate the land, there could be a disruption, curtailment and/or delay in the operations and planned drilling activities of the Company, which could have a material adverse effect on its business, financial condition, results of operations and prospects.
Risks relating to the Placing, Subscription and Open Offer and the New Ordinary Shares
There may be volatility in the price of the New Ordinary Shares
The Issue Price may not be indicative of the market price for the New Ordinary Shares following Admission. The market price of the New Ordinary Shares could be volatile and subject to significant fluctuations due to a variety of factors, including changes in sentiment in the market regarding the Company, the sector or equities generally, any regulatory changes affecting the Group's operations, variations in the Group's operating results and/or business developments of the Group and/ or its competitors, the operating and share price performance of other companies in the industries and markets in which the Group operates, news reports relating to trends in the Group's markets or the wider economy and the publication of research analysts' reports regarding the Company or the sector generally.
The proportionate ownership and voting interest in the Company of Shareholders (who are not Placees) will be reduced pursuant to the Placing, Subscription and Open Offer. In addition, to the extent that Shareholders do not take up the Open Offer Shares under the Open Offer, their proportionate ownership and voting interest in the Company will be further reduced and the percentage that their Existing Ordinary Shares represents of the Enlarged Share Capital will be reduced accordingly. Subject to certain exceptions, Shareholders in the United States and other Excluded Territories will not be able to participate in the Open Offer.
Pre-emptive rights may not be available for US and other non-UK holders of ordinary shares
In the case of an increase in the share capital of the Company for cash, the Shareholders are generally entitled to pre-emption rights pursuant to the Act unless such rights are waived by a special resolution of the Shareholders at a general meeting (as proposed in respect of the Capital Raising), or in certain circumstances stated in the Articles, and such an issue could dilute the interests of the Shareholders. To the extent that pre-emptive rights are applicable, US and certain other non-UK holders of Ordinary Shares may not be able to exercise pre-emptive rights for their shares unless the Company decides to comply with applicable local laws and regulations and, in the case of US holders, unless a registration statement under the US Securities Act is effective with respect to those rights or an exemption from the registration requirements thereunder is available. The New Ordinary Shares to be issued will not be registered under the US Securities Act. Qualifying Shareholders who have a registered address, or who are resident in, or who are citizens of, countries other than the United Kingdom should consult their professional advisers about whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their Open Offer Entitlements or acquire Open Offer Shares.
Risks relating to Paraguay
Corporate Governance in Paraguay
The proposed acquisition of the Paraguayan Concession Interests will signify the Group's entry into a new country, Paraguay. The country has a low score in the Transparency International 2011 "Corruption Perceptions Index" which ranks countries and territories according to their perceived levels of public sector corruption. Paraguay ranks 154th in the world, thus highlighting there is a risk that corruption permeates government institutions and corrupts the execution of their functions.
The Group values its reputation for ethical behaviour and for financial probity and reliability and has adopted an anti-bribery policy statement and other safeguards designed to prevent the occurrence of fraud, bribery and corruption. It may not be possible, however, for the Company to detect or prevent every instance of fraud, bribery or corruption that may occur with respect to the proposed Paraguayan Concession Interests. Should this occur, the Company may be subject to civil and criminal penalties and to reputational damage. Instances of fraud, bribery and corruption, and violations of laws and regulations in Paraguay and the other jurisdictions in which the Company operates could have a material adverse effect on its results of operations and financial condition.
Political risks in Paraguay
Paraguay moved to a democratic political system in 1992 following 35 years of dictatorship under General Stroessner. The right-wing Colorado party held power for the succeeding years until the 2008 election of Fernando Lugo, the first time power had passed peacefully to an opposing party. In June 2012, Fernando Lugo was impeached under the Paraguayan constitution, leading to the incumbent Vice-President Federico Franco becoming President. Democratic elections are scheduled for 23 April 2013 with Franco stepping down from office on 15 August 2013. The heightened political instability and unrest could have a material adverse effect on the Company's ability to operate the Paraguayan Concessions.
The recent political instability and impeachment of President Lugo has caused international denunciation of the Paraguayan government, for denying its President due process and the right to a defence against his removal. In particular, these events have resulted in the suspension of Paraguay from the Union of South American Nations ("Unasur"), the intergovernmental union integrating two existing customs unions: Mercosur and the Andean Community of Nations. The suspension, which is expected to remain in place until the April 2013 elections, prevents Paraguay from participating in meetings but does not impose economic sanctions. This could result in the country's political isolation and have a significant effect on economic trade for the country, particularly if the suspension remains in place beyond April 2013. In particular, the suspension could result in sanctions being imposed on the country and also affect the funding it receives from Unasur. As a result, the Group's operations in Paraguay may be adversely affected.
In addition, future operations of President may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and oil and natural gas safety matters. As with any country, the possibility that future governments may adopt substantially different policies, which may extend to the expropriation of assets cannot be ruled out. However, there is no precedence for this.
Failure to comply strictly with applicable laws, regulations and local practices relating to property applications and tenure, could result in loss, reduction or expropriation of entitlements. The occurrence of these various factors and uncertainties cannot be accurately predicted and could have an adverse effect on the Company's business, results of operations and financial condition.
Economic risks in Paraguay
Paraguay's economy is small and remains heavily dependent on its traditional agricultural exports of soyabeans (Paraguay is the world's 4th largest exporter), cotton and meat. Approximately 20 per cent. of the country's GDP is derived from agriculture and agricultural activities employ approximately one-quarter of the country's workforce. While economic growth has been substantial in recent years with GDP growth of 9.4 per cent. between 2010-2011, Paraguay depends on imports of manufactured goods, as well as capital goods that are necessary to supply the industrial and investment requirements of the economy. Due to this over-dependence on agriculture and its reliance on imported goods, Paraguay is vulnerable to economic downturns and there can be no guarantee that Paraguay's economy would be able to withstand or rebound from a new or a continued global economic downturn. The occurrence of these various factors and uncertainties cannot be accurately predicted and could have an adverse effect on the Company's business, results of operations and financial condition.
Lack of oil and gas production in Paraguay
The Group's Paraguayan Concession Interests will be at the exploration stage only. Paraguay's oil and gas industry is dependent on imported fuel and is at the nascent stage with known hydrocarbon deposits but no proven reserves or domestic oil production.
There is no assurance that commercial quantities of crude oil and/or gas will be discovered at any of Paraguayan Property Concessions or any future properties, nor is there any assurance that the exploration or development programs of the Group thereon will yield any positive results. Even if commercial quantities of crude oil and/or natural gas are discovered, there can be no assurance that any property of the Group in Paraguay will ever be brought to a stage where oil and/or natural gas can profitably be produced thereon. Factors which may limit the ability of the Group to produce oil and/or natural gas from its properties include, but are not limited to, commodity prices, availability of additional capital and financing and the nature of any crude oil and/or natural gas deposits.
Legal system and regulatory landscape in Paraguay
Paraguay may have less developed legal systems than more established economies, which may result in risks such as: (i) potential difficulties in obtaining effective legal redress in its courts, whether in respect of a breach of law or regulation, or in an ownership dispute; (ii) a higher degree of discretion on the part of governmental authorities; (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations; (iv) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (v) relative inexperience of the judiciary and courts in such matters.
Historically, the Paraguayan Government has sought to restrict foreign investment in the country. However, over recent years, attempts have been made to attract and secure foreign investment through privatisation. In June 2006, for example, the governments of Bolivia and Paraguay approved a plan to construct a pipeline from southern Bolivia to Paraguay, which led to an increase in interest from international oil and gas companies. To attract further foreign investment, Paraguay enacted favourable hydrocarbon and tax laws which offer benefits conducive to the high risk nature of oil and natural gas exploration and development. While these measures have sought to attract the level of foreign investment required to explore and develop hydrocarbons in Paraguay, progress has been slow.
No assurance can be given that new laws, rules or tariffs will not be enacted or that existing laws, rules and tariffs will not be applied in a manner which could limit or curtail exploration, development or production by foreign companies. Any amendment to the current Paraguayan laws, rules and tariffs which govern the operations and activities of oil and gas operations such as the intended work programmes at the Paraguayan Concession Interests could have a substantial adverse impact on the Company's results of operations and financial condition.
Availability of infrastructure in Paraguay
Crude oil and natural gas exploration, development and production activities depend, to one degree or another, on third parties providing access to the necessary infrastructure. Reliable roads, bridges, power sources, water supply and disposal facilities are important determinants, which affect capital and operating costs. The Company intends to transport hydrocarbons produced from the Pirity Block and the
Demattei Block to local and/or Argentine refineries via a road network which provides a border crossing between Argentina and Paraguay approximately 200 kilometres west of Filadelfia and a further road network which provides a transport link to the proposed refinery near Tartagal. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the operations, financial condition and results of operations of the Group. While in recent years, the level of investment by foreign companies has increased, Paraguay has limited infrastructure with respect to the commercialisation of hydrocarbons.
Other risk factors
The Existing Ordinary Shares are traded on AIM rather than the main market of the London Stock Exchange. An investment in shares traded on AIM may carry a higher risk than an investment in shares listed on the Official List of the UK Listing Authority and traded on the main market of the London Stock Exchange.
Investors should be aware that the value of the New Ordinary Shares may be volatile and may go down as well as up and investors may therefore not recover their original investment, especially as the market in the New Ordinary Shares on AIM may have limited liquidity.
The market price of the New Ordinary Shares may not reflect the underlying value of the Company's net assets. The price at which investors may dispose of their shares in the Company may be influenced by a number of factors, some of which may pertain to the Company, and others of which are extraneous. Investors may realise less than the original amount invested.
The risks above do not necessarily comprise all those faced by the Company and are not intended to be presented in any assumed order of priority.
The investment offered in this document may not be suitable for all of its recipients. Investors are accordingly advised to consult an investment adviser, who is authorised under the FSMA and who or which specialises in investments of this kind before making a decision to invest.
PART D
Definitions
The following definitions apply throughout this announcement (save for the Schedule to this announcement which contains definitions which apply throughout that Schedule only) unless the context otherwise requires:
"Act" the Companies Act 2006 (as amended)
"Acquisition" the acquisition by the Group of the Paraguayan
Concession Interests pursuant to the Farm-In
Agreements
"Admission" the admission to trading on AIM of the New
Ordinary Shares to be issued pursuant to the
Capital Raising taking place in accordance
with the AIM Rules for Companies, which shall
take place in three stages at the time of
First Admission, Second Admission and Third
Admission
"AIM" the market of that name operated by the London
Stock Exchange
"AIM Rules for Companies" the AIM Rules for Companies, as published
and amended from time to time by the London
Stock Exchange
"AIM Rules for Nominated the rules for nominated advisers to AIM companies,
Advisers" as published and amended from time to time
by the London Stock Exchange
"Applicant" a Qualifying Shareholder or a person entitled
by virtue of a bona fide market claim who
lodges an Application Form under the Open
Offer
"Application Form" the application form which accompanies this
document for Qualifying non-CREST Shareholders
for use in connection with the Open Offer
"Articles" the existing articles of association of the
Company as at the date of this announcement
"boepd" barrels of oil equivalent per day
"bopd" barrels of oil per day
"Board" the board of directors of the Company from
time to time
"Business Day" any day (excluding Saturdays and Sundays)
on which banks are open in London for normal
banking business and the London Stock Exchange
is open for trading
"Capital Raising" together, the Placing, Subscription and the
Open Offer, details of which are set out in
this document
"CCSS" the CREST courier and sorting service, established
by Euroclear UK & Ireland to facilitate, inter
alia, the deposit and withdrawal of certified
securities "certificated" or "certificated
form" not in uncertificated form
"Change of Name" the proposed change of the Company's name
to President Energy PLC, such change to be
approved pursuant to a Resolution to be proposed
at the General Meeting
"Circular" the circular to be sent to shareholders containing
details of the proposals and notice of the
General Meeting
"Company" or "President" President Petroleum Company PLC
"Conditional Placing the 86,887,500 New Ordinary Shares which have
Shares" been placed conditionally with investors by
RBC and Jefferies pursuant to the Proposed
Placing
"Crescent Oil" Crescent Global Oil, LLC
"Crescent Global Oil Crescent Global Oil Paraguay S.A.
Paraguay"
"CREST" the relevant system for the paperless settlement
of trades and the holding of uncertificated
securities operated by Euroclear UK & Ireland
in accordance with the CREST Regulations
"CREST member" a person who has been admitted by Euroclear
UK & Ireland as a system-member (as defined
in the CREST Regulations)
"CREST participant" a person who is, in relation to CREST, a system
participant (as defined in the CREST Regulations)
"CREST payment" shall have the meaning given in the CREST
Manual issued by Euroclear UK & Ireland
"CREST Regulations" the Uncertified Securities Regulations 2001,
as amended
"CREST sponsor" a CREST participant admitted to CREST as a
CREST sponsor
"CREST sponsored member" a CREST member admitted to CREST as a sponsored
member (which includes all CREST Personal
Members)
"Deferred Shares" the existing deferred shares of 29 pence each
of the Company
"Demattei Block" the oil and gas exploration and exploitation
area designated as "Demattei Block" which
is located in Paraguay's occidental region
"Demattei Concession" the concession contract enacted into Paraguayan
Law No. 3549 of 16 July 2008 in respect of
the Demattei Block
"Demattei Farm-In the conditional agreement dated 11 September
Agreement" 2012 between Crescent Global Oil Paraguay,
Crescent Oil and the Company, pursuant to
which terms the Company would acquire certain
of its interest in the Demattei Concession
on an incremental basis
"Demattei Joint Venture the agreement to be entered into between the
Agreement" Company and Crescent Global Oil Paraguay S.A.
governing future operations on the Demattei
Concession and pursuant to which terms the
Company would act as operator of the Demattei
Concession
"Directors" the directors of the Company at the date of
this announcement
"Enlarged Share Capital" the issued ordinary share capital of the Company
immediately following Third Admission
"enabled for settlement" in relation to Open Offer Entitlements or
Excess Open Offer Entitlements, enabled for
the limited purpose of settlement of claim
transactions and unmatched stock event transactions
(each as described in the CREST Manual issued
by Euroclear UK & Ireland)
"Euroclear UK & Ireland" Euroclear UK & Ireland Limited, the operator
or "Euroclear" of CREST
"Excess Application the arrangement pursuant to which Qualifying
Facility" Shareholders may apply for Open Offer Shares
in excess of their Open Offer Entitlements
"Excess CREST Open in respect of each Qualifying CREST Shareholder,
Offer the entitlement
"Entitlement" to apply for Open Offer Shares in addition
to his Open Offer Entitlement credited to
his stock account in CREST, pursuant to the
Excess Application Facility, which is conditional
on him taking up his Open Offer Entitlement
in full and which may be subject to scaling
back in accordance with the provisions of
the Open Offer
"Excess Open Offer an entitlement for each Qualifying Shareholder
Entitlement" to apply to subscribe for Open Offer Shares
in addition to his Open Offer Entitlement
pursuant to the Excess Application Facility
which is conditional on him taking up his
Open Offer Entitlement in full and which may
be subject to scaling back in accordance with
the provisions of the Open Offer
"Excess Shares" New Ordinary Shares in addition to the Open
Offer Entitlement for which Qualifying Shareholders
may apply under the Excess Application Facility
"Excluded Territories" the United States, Australia, Canada, Japan,
the Republic of South Africa, the Republic
of Ireland and any other jurisdiction where
the extension or availability of the Open
Offer would breach any applicable law or regulations
"Existing LCM Loan the existing loan facilities of US$9 million
Facility" made available to the Company and other members
of the Group by IYA Global Limited, a subsidiary
of LCM
"Existing Ordinary the existing issued ordinary shares of 1 penny
Shares" each in the capital of the Company as at the
date of this announcement
"Farm-In Agreements" the Demattei Farm-In Agreement and the Pirity
Farm-In Agreement
"Firm Placing" the placing of the Firm Placing Shares at
the Issue Price by RBC and Jefferies pursuant
to the Placing and Open Offer Agreement
"Firm Placing Shares" the 28,962,500 New Ordinary Shares which have
been placed firm by RBC and Jefferies and
are to be issued by the Company to investors
pursuant to the Firm Placing
"First Admission" the admission to trading on AIM of the Firm
Placing Shares, which is expected to take
place on 17 September 2012
"Form of Proxy" the form of proxy relating to the General
Meeting being sent to Shareholders
"FSA" the Financial Services Authority of the United
Kingdom
"FSMA" the Financial Services and Markets Act 2000
(as amended)
"GCA" Gaffney, Cline & Associates, Inc. of Suite
1000, 1300 Post Oak Blvd., Houston, Texas
77056, USA
"General Meeting" the general meeting of the Company convened
for 11.00 a.m. on 28 September 2012 (or any
adjournment of it), notice of which is set
out in the Circular
"Group" the Company and its subsidiary undertakings
"ISIN" International Securities Identification Number
"Issue Price" 20 pence per New Ordinary Share
"Jefferies" Jefferies Hoare Govett, a division of Jefferies
International Limited, the Company's Joint
Broker
"Joint Operating Agreements" the Pirity Joint Operating Agreement and the
Demattei Joint Operating Agreement
"London Stock Exchange" London Stock Exchange plc
"LCM" Levine Capital Management Limited, a company
registered in the British Virgin Islands under
number 1533154 with registered office at OMC
Chambers, Wickhams Cay 1, Road Town, Tortola,
British Virgin Islands.
"Member Account ID" the identification code or number attached
to any member account in CREST
"mmb" million barrels
"mmboe" million barrels of oil equivalent
"Money Laundering the Money Laundering Regulations 2007 (as
Regulations" amended)
"New LCM Loan Facility" the US$15 million revolving loan term facility
to be provided by LCM (or an associated party
of LCM and/or Peter Levine) to President
"New Ordinary Shares" up to 154,598,541 ordinary shares of 1 penny
each in the capital of the Company to be issued
pursuant to the Capital Raising
"Official List" the Official List of the UK Listing Authority
"Open Offer" the invitation to Qualifying Shareholders
to subscribe for Open Offer Shares at the
Issue Price on the terms of and subject to
the conditions set out or referred to in the
Circular and, where relevant, in the Application
Form
"Open Offer Entitlement" the pro rata basic entitlement for Qualifying
Shareholders to apply to subscribe for 7 Open
Offer Shares for every 45 Existing Ordinary
Shares held by them on the Record Date pursuant
to the Open Offer
"Open Offer Shares" the 19,998,541 New Ordinary Shares for which
Qualifying Shareholders are being invited
to apply under the terms of the Open Offer
"Overseas Shareholders" Shareholders who are resident in, or who are
citizens of, or who have registered addresses
in, territories other than the United Kingdom
"Paraguay" the Republic of Paraguay
"Paraguayan Concession" the Pirity Concession and the Demattei Concession
"Paraguayan Concession certain interests in the Pirity Concession
Interests" and the Demattei Concession to be acquired
by the Group pursuant to the Acquisition
"Participant ID" the identification code or membership number
used in CREST to identify a particular CREST
member or other CREST participant
"PetroVictory" PetroVictory LLC
"Pirity Block" the oil and gas prospecting, exploration and
exploitation area designated as "Pirity Block"
which is located in Paraguay's occidental
region
"Pirity Concession" the concession contract enacted into Paraguayan
Law No. 3479 of 13 May 2008 in respect of
the Pirity Block
"Pirity Farm-In Agreement" the conditional agreement dated 11 September
2012 between Pirity Hidrocarburos, PetroVictory
and the Company, pursuant to which terms the
Company would acquire certain of its interest
in the Pirity Concession on an incremental
basis
"Pirity Hidrocarburos" Pirity Hidrocarburos S.R.L.
"Pirity Joint Operating the agreement to be entered into between the
Agreement" Company and Pirity Hidrocarburos governing
future operations on the Pirity Concession
and pursuant to which terms the Company would
act as operator of the Pirity Concession
"Placees" the persons who conditionally agree to subscribe
for the Placing Shares
"Placing" the Firm Placing and the Proposed Placing
"Placing and Open the agreement dated 11 September 2012 between
Offer Agreement" the Company, RBC and Jefferies relating to
the Placing and Open Offer
"Placing Shares" the Firm Placing Shares and Conditional Placing
Shares
"Proposed Placing" the conditional placing by RBC and Jefferies
of the Conditional Placing Shares at the Issue
Price pursuant to the Placing and Open Offer
Agreement
"Proposals" together, the Capital Raising, the Acquisition
and the Change of Name
"Prospectus Rules" the rules made by the FSA under Part VI of
FSMA in relation to offers of transferable
securities to the public and admission of
transferable securities to trading on a regulated
market
"Puesto Guardian Concession" the exploitation concession over the CNO-8
"Puesto Guardian Area" located in the Province
of Salta, Argentina granted by means of a
Presidential Decree 1596/1991 dated 15 August
1991 of the National Executive Branch (as
subsequently amended)
"Qualifying CREST Qualifying Shareholders whose Existing Ordinary
Shareholders" Shares on the register of members of the Company
at the close of business on the Record Date
are held in uncertificated form
"Qualifying non-CREST Qualifying Shareholders whose Existing Ordinary
Shareholders" Shares on the register of members of the Company
at the close of business on the Record Date
are held in certificated form
"Qualifying Shareholders" holders of Existing Ordinary Shares on the
Company's register of members at the Record
Date (other than certain Overseas Shareholders)
"RBC" or "RBC Capital RBC Europe Limited (trading as RBC Capital
Markets" Markets), the Company's Nominated Adviser
and Joint Broker
"Record Date" close of business on 7 September 2012
"Registrar", "Receiving Equiniti Limited, Aspect House, Spencer Road,
Agent" or "Equiniti" Lancing, West Sussex, BN99 6DA
"Related Parties" the related parties of LCM being John Hamilton,
Benjamin Wilkinson, Michael Cochran and Richard
Hubbard
"Resolutions" the resolutions set out in the notice of the
General Meeting
"Second Admission" the admission to trading on AIM of the Conditional
Placing Shares and Open Offer Shares, which
is expected to take place on 1 October 2012
"Shareholders" holders of Existing Ordinary Shares
"stock account" an account within a member account in CREST
to which a holding of a particular share or
other security in CREST is credited
"subsidiary" a "subsidiary undertaking" as that term is
defined in the Act
"Subscription" the conditional subscription of 18,750,000
Subscription Shares at the Issue Price by
Pirity Hidrocarburos
"Subscription Shares" the 18,750,000 New Ordinary Shares which are
to be issued by the Company to Pirity Hidrocarburos
pursuant to the Subscription
"Third Admission" the admission to trading on AIM of the Subscription
Shares expected to take place following completion
of the Farm-In Agreements
"uncertificated" or recorded on the relevant register or other
"uncertificated form" record of the share or other security concerned
as being held in uncertificated form in CREST,
and title to which, by virtue of the CREST
Regulations, may be transferred by means of
CREST
"UK Listing Authority" the FSA acting in its capacity as the competent
authority for the purposes of Part VI of FSMA
"United Kingdom" or the United Kingdom of Great Britain and Northern
"UK" Ireland
"GBP" or "Pounds" UK pounds sterling, being the lawful currency
of the United Kingdom
"United States", "USA" the United States of America, its territories
or "US" and possessions and any state of the United
States of America and the District of Columbia
"US$" or "US Dollars" US dollars, being the lawful currency of the
United States
"US Securities Act" the United States Securities Act of 1933,
(as amended)"
THE TERMS AND CONDITIONS CONTAINED IN THIS SCHEDULE HAVE BEEN EXTRACTED FROM THE SCHEDULE TO THE PLACING LETTERS WHICH HAVE BEEN SENT TO PLACEES IN RELATION TO THE PLACING
SCHEDULE
"PLACING TERMS AND CONDITIONS
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE NEW ORDINARY SHARES.
This schedule does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of the Company or other evaluation of any securities of the Company or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.
Details of the Cash Placing and the Conditional Placing
RBC Capital Markets (a trading name of RBC Europe Limited; "RBC Capital Markets") and Jefferies Hoare Govett (a division of Jefferies International Limited; "Jefferies") are proposing to enter into an agreement with the Company (the "Placing Agreement") under which terms, subject to the conditions set out in that agreement, the Banks will agree to use their respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price with certain institutional and other investors or, in the event of any default by any subscriber in respect of the Placing Shares (other than LCM or any Placee subscribing for Company Settled Shares), subscribe for such shares themselves , as further described in the Placing Letter (including this schedule) and as set out in the Placing Agreement.
The Placing Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared or made following Admission.
Open Offer
The Company is also separately making the Open Offer to raise a maximum of GBP4.000 millionfrom existing Shareholders.
Applications for admission to trading
Applications will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM. Admission is conditional upon, amongst other things, certain conditions in the Placing Agreement being satisfied and the Placing Agreement not having been terminated in accordance with its terms.
It is expected that Admission of the Cash Placing Shares will become effective at 8.00 a.m. on 17 September 2012 and that dealings in the Cash Placing Shares will commence at that time.
It is expected that Admission of the Conditional Placing Shares will become effective at 8.00 a.m. on 1 October 2012 and that dealings in the Conditional Placing Shares will commence at that time.
Participation in, and principal terms of, the Cash Placing and the Conditional Placing
The Banks are arranging the Cash Placing and the Conditional Placing as agents for and on behalf of the Company. The Banks will determine in their absolute discretion the extent of each Placee's participation in the Cash Placing and the Conditional Placing, which will not necessarily be the same for each Placee. No commissions will be paid to or by Placees in respect of their agreement to acquire any Placing Shares.
Each Placee will be required to pay to the Banks, on the Company's behalf, the Placing Price for each Placing Share agreed to be acquired by it under the Cash Placing and the Conditional Placing in accordance with the terms set out in the Placing Letter (including this schedule). Each Placee's obligation to acquire and pay for Placing Shares under the Cash Placing and the Conditional Placing will be owed to the Banks and the Company. Each Placee has an immediate, separate, irrevocable and binding obligation, owed to the Banks, to pay to them (or as they may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for. Each Placee will be deemed to have read and understood the terms and conditions set out in the Placing Letter (including this schedule) in their entirety, to be participating in the Cash Placing and the Conditional Placing upon the terms and conditions contained in the Placing Letter (including this schedule), and to be providing the representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in the Placing Letter (including this schedule). To the fullest extent permitted by law and applicable Financial Services Authority ("FSA") rules (the "FSA Rules"), none of (i) RBC Capital Markets or Jefferies, (ii) any of their respective directors, officers, employees or consultants, nor (iii) to the extent not contained within (i) or (ii), any person connected with RBC Capital Markets or Jefferies as defined in the FSA Rules ((i), (ii) and (iii) being together "affiliates" and individually an "affiliate"), shall have any liability to Placees or to any person other than the Company in respect of the Cash Placing or the Conditional Placing.
The Cash Placing Shares will be allotted to Placees pursuant to share authorities approved by Shareholders at the Company's recent annual general meeting held on 13 June 2012.
The allotment of the Conditional Placing Shares will require the passing of the Resolutions at the General Meeting. If passed, the Resolutions will grant authorities to Directors to allot further shares for cash on a non pre-emptive basis. Allotment of the Conditional Placing Shares will take place as soon as practicable following the General Meeting, conditional on Second Admission.
Conditions of the Conditional Placing
The obligations of the Banks in respect of the Conditional Placing under the Placing Agreement are conditional on, amongst other things:
(a) the Company having complied with all of its obligations under the Placing Agreement (to the extent such obligations fall to be performed prior to Second Admission);
(b) the warranties contained in the Placing Agreement being true, accurate and not misleading in any respect as at the date of the Placing Agreement and at all times up to and including Second Admission (in each case in the opinion of either of the Banks, acting in good faith) by reference to the facts and circumstances existing from time to time;
(c) in the opinion of either of the Banks, acting in good faith, there having been no material adverse change, whether or not foreseeable at the date of the Placing Agreement, in, or any development involving a prospective material adverse change in or affecting, the condition (financial operational, legal or otherwise) or the assets, earnings, management, business affairs, business prospects or financial prospects of the Company or of the Group (taken as a whole), whether or not arising in the ordinary course of business;
(d) the posting by no later than 12 September 2012 (by first class pre-paid mail) of the Circular to Shareholders and such other persons (if any) entitled to receive notice of the General Meeting in accordance with the Company's Articles of Association together (where applicable) with a Form of Proxy and, to Qualifying Shareholders (other than certain overseas Qualifying Shareholders), the Application Form;
(e) the Open Offer Entitlements being admitted as a participating security (as defined in the CREST Regulations) to CREST; Open Offer Entitlements being credited to the CREST stock accounts of Qualifying CREST Shareholders in the proportions set out in the Circular; and the Open Offer Entitlements becoming enabled for settlement within CREST, in each case by not later than the Business Day following the date of posting of the Circular;
(f) the passing of the Resolutions by the requisite majority without material amendment at the General Meeting (or at any adjournment thereof);
(g) First Admission having occurred; (h) the Farm-in Agreements remaining in full force and effect; and
(i) Second Admission taking place by not later than 8.00 a.m. on 1 October 2012 (or such other later date as may be agreed between the parties).
Conditions of the Cash Placing
The obligations of RBC Capital Markets and Jefferies in respect of the Cash Placing under the Placing Agreement are conditional on, amongst other things:
(a) the conditions set out in paragraphs (a) to (i) above, except that:
(i) the conditions set out at paragraphs (d), (e), (f), (g) and (i) shall not be applicable; and
(ii) the references to Admission of the Conditional Placing Shares or Second Admission in paragraphs (a) and (b) shall be deemed to be references to Admission of the Cash Placing Shares or First Admission; and
(b) First Admission taking place by not later than 8.00 a.m. on 17 September 2012 (or such other later date as may be agreed between the parties).
If any of the respective conditions contained in the Placing Agreement in relation to the Cash Placing and the Conditional Placing are not fulfilled or waived by the Banks, by the respective time or date where specified, the Cash Placing and/or the Conditional Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
The Banks and the Company may agree in writing to extend the time and/or date by which any of the conditions contained in the Placing Agreement are required to be fulfilled to no later than 3.00 p.m. on the Long Stop Date.
The Banks may, in their absolute discretion and on such terms as they think appropriate, waive fulfilment by the Company of the whole or any part of any or all of the Company's obligations in relation to the conditions in the Placing Agreement (to the extent permitted by applicable law or regulation). Any such extension or waiver will not affect Placees' commitments as set out in the Placing Letter.
None of the Banks, the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Cash Placing or the Conditional Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Cash Placing or the Conditional Placing generally, and by participating in the Cash Placing and the Conditional Placing, each Placee agrees that any such decision is within the absolute discretion of the Banks.
Termination of the Placing Agreement
The Banks are entitled, at any time before Second Admission, to terminate the Placing Agreement in relation to their obligations in respect of the New Ordinary Shares by giving notice to the Company if, amongst other things, any of the following events have occurred:
(a) any of the warranties under the Placing Agreement being untrue, inaccurate or misleading in any respect when made or becoming untrue, inaccurate or misleading in any respect (in each case in the opinion of either of the Banks, acting in good faith) by reference to the facts and circumstances existing from time to time or any matter arising which might reasonably be expected to give an entitlement on the part of the Banks to make a claim under the indemnities set out in the Placing Agreement; or
(b) any statement made in any of the Marketing Documents being untrue, inaccurate or misleading in any respect when made or becoming untrue, inaccurate or misleading in any respect (in each case in the opinion of the Banks, acting in good faith) by reference to the facts and circumstances existing from time to time, or any matter arising which might, if the Marketing Documents were issued at that time, constitute a material omission from them or a misleading inaccuracy in any announcements released by the Company through a Regulatory Information Service or other document issued to shareholders of the Company or otherwise to the public by any member of the Group, in each case since the Accounts Date; or
(c) any of the following has occurred:
(i) the suspension of trading in securities generally on the London Stock Exchange or the New York Stock Exchange or trading is limited or minimum prices established on any such exchange; or
(ii) the declaration of a banking moratorium in London or by the US federal or New York State authorities or any material disruption to commercial banking or securities settlement or clearance services in the US or the UK; or
(iii) any adverse change, whether or not foreseeable at the date of the Placing Agreement, or development involving a prospective adverse change, in the financial markets in the United States, the United Kingdom, Argentina or Paraguay or any member of the European Union, or in international financial, economic, political, industrial or market conditions or currency exchange rates or any incident of terrorism or outbreak or escalation of hostilities or any declaration by the UK or the US of a national emergency or war or any other calamity or crisis; or
(iv) an adverse change, whether or not foreseeable at the date of this Agreement, or a prospective adverse change occurring since the date of this Agreement in (A) US or UK, Argentina or Paraguay taxation affecting the Group or the Ordinary Shares or the transfer of the Ordinary Shares; (B) the hydrocarbon industry (including, without limitation, governmental regulation or policy regarding hydrocarbon concessions or licences, or rights thereto) in Argentina or Paraguay; or (C) the imposition of exchange controls by the United States or the United Kingdom or Argentina or Paraguay,
which events described in (i), (ii), (iii) or (iv) above either of the Banks considers in its opinion (acting in good faith) may have an adverse effect on the financial or trading position or the business or prospects of the Group which is material in the context of Group as a whole or which renders it impracticable or inadvisable to market the New Ordinary Shares or to enforce the contracts for the sale of the New Ordinary Shares; or
(d) in the opinion of either of the Banks (acting in good faith), any material adverse change, whether or not foreseeable at the date of the Placing Agreement, in, or any development involving a prospective material adverse change in or affecting, the condition (financial operational, legal or otherwise) or the assets, earnings, management, business affairs, business prospects or financial prospects of the Company or of the Group (taken as a whole), whether or not arising in the ordinary course of business.
Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.
By participating in the Placing, Placees agree that the exercise by the Banks of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Banks and that the Banks need not make any reference to Placees and that the Banks shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.
No prospectus
No offering document, prospectus or admission document has been or will be submitted to be approved by the FSA or submitted to the London Stock Exchange in relation to the Cash Placing or the Conditional Placing and Placees' commitments will be made solely on the basis of the information contained in the Placing Letter (including this schedule and the draft Press Announcement attached at Appendix 1 to the Placing Letter).
Each Placee, by accepting a participation in the Cash Placing and the Conditional Placing agrees that the content of the Placing Letter (including this schedule) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Banks or any other person and none of the Banks, the Company nor any other person will be liable for any Placee's decision to participate in the Cash Placing and the Conditional Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Cash Placing and the Conditional Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Registration and settlement
Settlement of transactions in the New Ordinary Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in either Bank's opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.
Participation in the Cash Placing or the Conditional Placing is only available to persons who are invited to participate in it by the Banks.
Each Placee's commitment to acquire a fixed number of Placing Shares under the Cash Placing or the Conditional Placing will be agreed orally or in writing or via email with either of the Banks or via the Bloomberg messaging system, and such agreement will constitute a legally binding commitment on such Placee's part to acquire such number of Placing Shares at the Placing Price, subject to the terms and conditions set out in the Placing Letter (including this schedule), and the Company's Articles of Association.
Each Placee allocated Placing Shares in the Cash Placing and the Conditional Placing will be sent a contract note (if affirmation is not sent electronically) stating the number of Placing Shares allocated to it at the Placing Price and settlement instructions.
Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the Banks. Settlement should be through RBC Capital Markets against CREST ID: 388, account designation: RBC, or through Jefferies against CREST ID: 393, as the case may be. For the avoidance of doubt, allocations in respect of the Cash Placing will be booked with a trade date of 12 September 2012 and settlement date of First Admission and allocations in respect of the Conditional Placing will be booked with a trade date of 12 September 2012 and settlement date of Second Admission.
The Company will deliver the Placing Shares to the CREST accounts operated by the Banks as agents for the Company and the Banks will enter their delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.
It is expected that settlement in respect of the Cash Placing Shares will take place on the date of First Admission and settlement in respect of the Conditional Placing Shares will take place on the date of Second Admission, each on a delivery versus payment basis.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Banks.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Cash Placing or the Conditional Placing.
Representations and warranties
By participating in the Cash Placing and the Conditional Placing, each Placee (and any person acting on such Placee's behalf) acknowledges, undertakes, represents, warrants and agrees (as the case may be) the following. It:
1 has read the Placing Letter (including this schedule) in its entirety;
2 acknowledges and agrees that no offering document, prospectus or admission document has been or will be prepared in connection with the Cash Placing or the Conditional Placing and represents and warrants that it has not received a prospectus, admission document or other offering document in connection with the Cash Placing, the Conditional Placing or the New Ordinary Shares;
3 acknowledges that the ordinary shares in the capital of the Company are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such Exchange Information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company without undue difficulty;
4 acknowledges that none of the Banks or the Company or any of their respective affiliates or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the New Ordinary Shares or the Company or any other person other than the Placing Letter (including this schedule); nor has it requested any of the Banks, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;
5 acknowledges that (i) it and, if different, the beneficial owner of the New Ordinary Shares is not, and at the time the New Ordinary Shares are acquired will not be located in or residents of a Restricted Jurisdiction, and (ii) the New Ordinary Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, the Republic of South Africa, the Republic of Ireland or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into those jurisdictions;
6 acknowledges that the New Ordinary Shares have not been and will not be registered under the Securities Act and further acknowledges that the New Ordinary Shares are being offered and sold only (i) outside the United States pursuant to Regulation S under the Securities Act in an "offshore transaction" (as such term is defined in Regulation S under the Securities Act) or (ii) in the United States only to limited number of QIBs, pursuant to an exemption from registration under the Securities Act in a transaction not involving any public offering;
7 represents and warrants that it is (and any such account for which it is acting is) either (i) a QIB that has executed and returned to the Banks or their affiliates a US Investor Letter; or (ii) outside the United States and is acquiring the New Ordinary Shares in an "offshore transaction", as defined in and in accordance with, Regulation S under the Securities Act;
8 acknowledges that the New Ordinary Shares have not been and will not be qualified for distribution by a prospectus under applicable Canadian securities laws, and may only be offered and sold pursuant to an exemption from the prospectus requirements of those laws. Accordingly, the New Ordinary Shares may only be offered and sold to purchasers in Canada who are "accredited investors" within the meaning of Canadian securities laws and otherwise in compliance with all applicable Canadian securities laws;
9 acknowledges that the content of the Placing Letter (including this schedule) is exclusively the responsibility of the Company and that neither of the Banks nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in the Placing Letter (including this schedule) or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Cash Placing or the Conditional Placing based on any information, representation or statement contained in the Placing Letter (including this schedule) or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the New Ordinary Shares is contained in the Placing Letter (including this schedule and the draft Press Announcement attached to the Placing Letter at Appendix 1), and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the New Ordinary Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of the Banks or the Company and none of the Banks or the Company will be liable for any Placee's decision to accept an invitation to participate in the Cash Placing or the Conditional Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Cash Placing or the Conditional Placing;
10 acknowledges that neither of the Banks nor any person acting on behalf of the Banks nor any of their affiliates has or shall have any liability for any publicly available or filed information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
11 represents and warrants that neither it, nor the person specified by it for registration as a holder of New Ordinary Shares is, or is acting as nominee or agent for, and that the New Ordinary Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);
12 represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;
13 if a financial intermediary, as that term is used in Article 3(2) of EU Directive 2003/71/EC (the "Prospectus Directive") (including any relevant implementing measure in any member state), represents and warrants that the New Ordinary Shares subscribed for by it in the Cash Placing and Conditional Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of the Banks has been given to the proposed offer or resale;
14 represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Second Admission, will not offer or sell any New Ordinary Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ("FSMA");
15 represents and warrants that it has not offered or sold and will not offer or sell any New Ordinary Shares to persons in the European Economic Area prior to Second Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (Directive 2003/71/EC) (including any relevant implementing measure in any member state);
16 represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the New Ordinary Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;
17 represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the New Ordinary Shares in, from or otherwise involving, the United Kingdom;
18 (a) represents and warrants that it is a person falling within Article 19(5) and/or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom the Placing Letter (including this schedule) may otherwise be lawfully communicated; and (b) acknowledges that any offer of New Ordinary Shares may only be directed at persons to the extent in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive and represents and agrees that it is such a qualified investor;
19 represents and warrants that it is entitled to subscribe for New Ordinary Shares under the laws of all relevant jurisdictions which apply to it, and that its subscription of the New Ordinary Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;
20 undertakes that it (and any person acting on its behalf) will make payment for the New Ordinary Shares allocated to it in accordance with the Placing Letter (including this schedule) on the due time and date set out herein, failing which the relevant New Ordinary Shares may be placed with other subscribers or sold as the Banks may in their discretion determine and without liability to such Placee;
21 acknowledges that neither of the Banks, nor any of their respective affiliates, nor any person acting on behalf of the Banks, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Cash Placing and/or the Conditional Placing and that participation in the Cash Placing and the Conditional Placing is on the basis that it is not and will not be a client of either of the Banks for the purposes of the Cash Placing and/or the Conditional Placing and that the Banks have no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Cash Placing or the Conditional Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
22 undertakes that the person whom it specifies for registration as holder of the New Ordinary Shares will be (i) itself or (ii) its nominee, as the case may be. Neither the Banks nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company and the Banks in respect of the same on the basis that the New Ordinary Shares will be allotted to the CREST stock account of RBC Capital Markets or Jefferies as the case may be who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;
23 acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the New Ordinary Shares (together with any interest chargeable thereon) may be taken by the Company or the Banks in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;
24 acknowledges that RBC Capital Markets and Jefferies and their respective affiliates will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises the Banks to produce the Press Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth therein;
25 agrees to indemnify and hold the Company, the Banks and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in the Placing Letter (including this schedule) and further agrees that the provisions of the Placing Letter (including this schedule) shall survive after completion of the Cash Placing and the Conditional Placing;
26 represents and warrants that it will acquire any New Ordinary Shares subscribed for by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;
27 acknowledges that its commitment to subscribe for New Ordinary Shares on the terms set out herein and in the relevant contract note will continue notwithstanding any amendment that may in future be made to the terms of the Cash Placing and/or the Conditional Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Cash Placing and/or the Conditional Placing. The foregoing representations, warranties and confirmations are given for the benefit of the Company as well as each of the Banks. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the New Ordinary Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of New Ordinary Shares is, or is acting as nominee or agent for, and that the New Ordinary Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the New Ordinary Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither the Company nor the Banks shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Banks accordingly;
28 understands that no action has been or will be taken by any of the Company, the Banks or any person acting on behalf of the Company or the Banks that would, or is intended to, permit a public offer of the New Ordinary Shares in any country or jurisdiction where any such action for that purpose is required;
29 in making any decision to subscribe for the New Ordinary Shares, confirms that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the New Ordinary Shares. It further confirms that it is experienced in investing in securities of this nature in this sector, is familiar with the market in which the Company operates and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Cash Placing and/or the Conditional Placing. It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms and conditions set out in the Placing Letter (including this schedule), including the merits and risks involved;
30 represents and warrants that it has (a) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (b) had access to review publicly available information concerning the Group that it considers necessary or appropriate and sufficient in making an investment decision; (c) reviewed such information as it believes is necessary or appropriate in connection with its subscription of the New Ordinary Shares; and (d) made its investment decision based upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of the Banks or any of their respective Affiliates;
31 understands and agrees that it may not rely on any investigation that the Banks or any person acting on their behalf may or may not have conducted with respect to the Company, its Group, or the Cash Placing and/or the Conditional Placing and the Banks have not made any representation to it, express or implied, with respect to the merits of the Cash Placing and/or the Conditional Placing, the subscription for the New Ordinary Shares, or as to the condition, financial or otherwise, of the Company, its Group, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to subscribe for the New Ordinary Shares. It acknowledges and agrees that no information has been prepared by the Banks or the Company for the purposes of the Cash Placing and/or the Conditional Placing;
32 acknowledges and agrees that all representations, warranties, acknowledgements, undertakings and agreements which have been made in the Placing Letter (including this schedule) shall survive the transaction and the delivery of the New Ordinary Shares; and
33 accordingly it acknowledges and agrees that it will not hold the Banks or any of their respective affiliates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Group or information made available (whether in written or oral form) in presentations or as part of roadshow discussions with investors relating to the Group (the "Information") and that neither the Banks nor any person acting on behalf of either of the Banks, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any New Ordinary Shares or the agreement by them to subscribe for any New Ordinary Shares.
Each Placee and any person acting on behalf of each Placee acknowledges and agrees that either of the Banks and any of their respective affiliates may, in their absolute discretion, agree to become a Placee in respect of some or all of the New Ordinary Shares.
When a Placee or person acting on behalf of the Placee is dealing with either RBC Capital Markets or Jefferies, any money held in an account with RBC Capital Markets or Jefferies on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Bank's money in accordance with the client money rules and will be used by such Bank in the course of its own business; and the Placee will rank only as a general creditor of such Bank.
All times and dates in the Placing Letter (including this schedule) may be subject to amendment. The Banks shall notify the Placees and any person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
DEFINITIONS
The following definitions apply throughout this Schedule to this announcement only and unless the context otherwise requires:
"Accounts Date" 31 December 2011
"Admission" the First Admission and/or the Second
Admission, as the context requires
"Affiliates" any person that directly, or indirectly
through one or more intermediaries,
controls or is controlled by, or is
under common control with, the person
specified
"AIM" the market of that name operated by
the London Stock Exchange
"Application Form" the application form in the agreed
form for use by Qualifying Shareholders
in connection with the Open Offer
"Associate" in relation to a person, each of its
affiliates, controlling entities, subsidiaries,
branches and associates (as defined
by applicable laws and regulations)
"Banks" RBC Capital Markets and Jefferies,
or either one of these as the context
requires
"Business Day" a day not being a Saturday or a Sunday
on which banks are open for business
in the City of London
"Cash Placing" the placing of the Cash Placing Shares,
based on the Company's existing share
allotment authority, on the terms of
the Issue Documents
"Cash Placing Shares" the 28,962,500 new Ordinary Shares
to be placed with Placees pursuant
to the Cash Placing
"Circular" the circular to be issued by the Company
to Shareholders including, inter alia,
details of the Cash Placing and the
Conditional Placing and details and
terms of the Open Offer, and attaching
the Form of Proxy and, to Qualifying
Shareholders (other than certain overseas
Qualifying Shareholders), the Application
Form
"Company" or "the Company" President Petroleum Company PLC
or "President"
"Company Settled Shares" the New Ordinary Shares to be subscribed
by certain Placees pursuant to the
Cash Placing and the Conditional Placing
who will make payment in respect of
such New Ordinary Shares directly to
the Company
"Concessions" means the Pirity Concession and the
Demattei Concession
"Conditional Placing" the placing of the Conditional Placing
Shares, subject to the passing of the
Resolutions, on the terms of the Issue
Documents
"Conditional Placing Shares" the 86,887,500 new Ordinary Shares
to be placed with Placees pursuant
to the Conditional Placing
"CREST" the relevant system (as defined in
the Uncertificated Securities Regulations
2001) for the paperless settlement
of trades and the holding of uncertificated
securities operated by Euroclear UK
& Ireland Limited
"Pirity Placing Shares" the 18,750,000 new Ordinary Shares
to be subscribed by Pirity Hidrocarburos
S.R.L. pursuant to the terms of the
Pirity Placing Letter
"Pirity Placing Letter" the placing letter and attached form
of acceptance or confirmation sent
by the Company to Pirity Hidrocarburos
S.R.L. setting out the terms and conditions
of their subscription for 18,750,000
New Ordinary Shares for a subscription
amount of US$6 million
"Demattei Concession" the lands in the Republic of Paraguay
designated as "Block Demattei" under
"Concession Contract" enacted into
Paraguayan law No. 3549 on 16 July
2008
"Demattei Farm-in Agreement" the agreement dated the same date as
this Agreement entered into by Crescent
Global Oil Paraguay S.A.; Crescent
Global Oil, LLC and the Company pursuant
to which the Company can earn up to
a 60 per cent interest in the Demattei
Concession
"Directors" or "Board" the directors of the Company, or any
duly authorised committee thereof
"Excess Application Facility" the arrangement pursuant to which Qualifying
Shareholders may apply for Open Offer
Shares in excess of their Open Offer
Entitlements
"Excess Open Offer Entitlement" an entitlement for each Qualifying
Shareholder to apply to subscribe for
Open Offer shares in addition to his
Open Offer Entitlement pursuant to
the Excess Application Facility
"Existing Ordinary Shares" the 128,562,055 Ordinary Shares in
issue at the date of this Placing Letter
"Farm-in" the farm-in by the Company in respect
of the Pirity Concession and the Demattei
Concession pursuant to the Farm-in
Agreements
"Farm-in Agreements" the Pirity Farm-in Agreement and the
Demattei Farm-in Agreement
"First Admission" admission of the Cash Placing Shares
to trading on AIM becoming effective
(pursuant to Rule 6 of the AIM Companies
Rules)
"Form of Proxy" the form of proxy in relation to the
General Meeting, to be sent to each
of the Shareholders together with the
Circular
"FSA" the Financial Services Authority in
its capacity as the competent authority
for the purposes of Part VI of FSMA
"FSMA" the Financial Services and Markets
Act of 2000 (as amended)
"General Meeting" the meeting of the Company, at which
the Resolution will be proposed, to
be held at 11.00 a.m. on 28 September
2012, notice of which is contained
in the Circular
"GMT" Greenwich Mean Time
"Group" the Company, its subsidiaries and its
subsidiary undertakings
"Issue Documents" the Press Announcement, the Circular,
the Application Form and the Placing
Letters
"Issue Price" 20 pence per New Ordinary Share, being
the same as the Placing Price
"Jefferies" Jefferies Hoare Govett (a division
of Jefferies International Limited),
the Company's joint bookrunner, together
with RBC Capital Markets
"London Stock Exchange" London Stock Exchange plc
"LCM" or "Levine Capital Levine Capital Management Limited,
Management" a company registered in the British
Virgin Islands
"LCM Placing Shares" the 31,250,000 New Ordinary Shares
to be subscribed by LCM or any other
entity controlled by Peter Levine pursuant
to the Cash Placing and the Conditional
Placing
"Long Stop Date" 15 October 2012
"Management Presentation" the slides and text used in the Company's
presentation to potential Placees
"Marketing Documents" the Press Announcement, the Management
Presentation and the Circular
"New Ordinary Shares" the 135,848,541 Ordinary Shares to
be issued by the Company pursuant to
the Cash Placing, the Conditional Placing
and the Open Offer
"Open Offer" the open offer to Qualifying Shareholders
(on the terms set out in the Issue
Documents) of up to 19,998,542 New
Ordinary Shares at the Issue Price
"Open Offer Entitlement" an entitlement to apply to subscribe
for one New Ordinary Share, allocated
to Qualifying Shareholders pursuant
to the Open Offer
"Ordinary Shares" ordinary shares of 1 pence each in
the capital of the Company
"Pirity Concession" lands in the Republic of Paraguay designated
as "Block Pirity" under "Concession
Contract" enacted into Paraguayan law
No. 3479 on 13 May 2008
"Pirity Farm-in Agreement" means the agreement dated the same
date as this Agreement entered into
by Pirity Hidrocarburos S.R.L, Petro
Victory LLC, and the Company pursuant
to which the Company can earn up to
a 59 per cent interest in the Pirity
Concession
"Placee" means those persons (including individuals,
funds or otherwise) who will agree
to subscribe for Placing Shares pursuant
to the Cash Placing and/or the Conditional
Placing on the terms and conditions
contained in the Placing Letter
"Placing" the Cash Placing and/or the Conditional
Placing as the context may require
"Placing Agreement" the agreement to be entered into between
(i) the Company (ii) RBC Capital Markets
and (iii) Jefferies relating to the
Cash Placing, Conditional Placing and
Open Offer, further details of which
are set out in the Placing Letter
"Placing Letter" the placing letter relating to the
Placing sent by the Banks to each of
the Placees, (excluding LCM and the
placees in respect of Company Settled
Shares) together with the schedules
and appendices thereto
"Placing Price" 20 pence per Placing Share
"Press Announcement" the press announcement and the appendices
thereto in the agreed form giving details
of the Farm-in Agreements, the Cash
Placing, the Conditional Placing and
the Open Offer to be released on the
same date as the signing of the Placing
Agreement
"Placing Shares" 115,850,000 New Ordinary Shares, being
the Cash Placing Shares and the Conditional
Placing, including the LCM Placing
Shares and the Company Settled Shares,
and "Placing Share" means any one of
them but excluding the Pirity Placing
Shares
"QIB" qualified institutional buyers within
the meaning of Rule 144A under the
Securities Act
"Qualifying Shareholders" holders of Ordinary Shares on the register
of members of the Company as at close
of business on the record date set
out in the Circular who are eligible
to be offered New Ordinary Shares under
the Open Offer in accordance with the
terms and conditions of the Issue Documents;
and Qualifying CREST Shareholders means
Qualifying Shareholders whose Ordinary
Shares are in uncertificated form
"RBC Capital Markets" RBC Europe Limited (trading as RBC
Capital Markets), the Company's nominated
adviser and joint bookrunner, together
with Jefferies
"Regulation S" Regulation S under the Securities Act
"Regulatory Information a regulatory information service that
Service" is approved by the London Stock Exchange
for the release of AIM announcements
and is on the list of regulatory information
services maintained by the London Stock
Exchange
"Resolutions" the resolutions of the Company authorising
the Directors to allot the New Ordinary
Shares and disapplying Shareholders'
pre-emption rights but excluding the
resolution to change the name of the
Company, as set out in the Circular
"Restricted Jurisdiction" Australia, the Republic of South Africa,
the Republic of Ireland or Japan or
any other jurisdiction in which it
would be unlawful to distribute the
Placing Letter or subscribe for New
Ordinary Shares
"Second Admission" admission of the Conditional Placing
Shares to trading on AIM becoming effective
(pursuant to Rule 6 of the AIM Companies
Rules)
"Securities Act" the US Securities Act of 1933, as amended
"Shareholders" holders of Ordinary Shares from time
to time
UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
"United States" or "US" United States of America, its territories
and possessions, any state of the United
States of America and the District
of Columbia and all other areas subject
to its jurisdiction
"US Investor Letter" the investor representation letter
and attached confirmation sent by the
Banks to relevant Placees setting out
the terms and conditions of the Placing,
in the agreed form
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGUGWBUPPUPP
1 Year Molecular Energies Chart |
1 Month Molecular Energies Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
