Acquisition

RNS Number:3742V
Black Rock Oil & Gas PLC
1 May 2002


            ACQUISITION OF AFREX LIMITED BY BLACK ROCK OIL & GAS PLC



Introduction

Black Rock Oil and Gas Plc ("Black Rock" or "the Company") is pleased to
announce that it has conditionally agreed to acquire the entire issued share
capital  of Afrex Limited ("Afrex"), a company incorporated in the British
Virgin Islands. Afrex is an exploration company focusing on oil and gas
exploration in Africa and the Mediterranean.



In Malta, Afrex has interests in two offshore blocks, in Kenya, it has been
advised by the relevant authorities that agreements should be entered into over
three offshore blocks in May 2002 and in Morocco, it is in advanced negotiations
for a single offshore block.  It is also negotiating with other African
Governments for additional areas.



In the 15 months to 31 March 2002, Afrex reported on unaudited loss before
taxation of A$68,000 on nil revenue.  At 31 March 2002, Afrex had unaudited net
assets of A$306,000.



The proposed acquisition of Afrex implements Black Rock's stated strategy of
extending its exploration portfolio into Africa and the Directors of Black Rock
believe that the acquisition will be a significant step in the growth of  Black
Rock.



The consideration for the acquisition of Afrex is £900,000 to be satisfied by
the issue of 60 million new ordinary shares in Black Rock at 1.5 pence per share
with 30 million warrants, exercisable at 1 pence each prior to 31 December 2005.



In addition, and as a condition of the acquisition of Afrex, Black Rock intends
to obtain a facility for the trading of instruments representing its ordinary
shares on the Australian Stock Exchange Limited ("ASX") and also intends to
carry out a placing in Australia of ordinary shares and warrants to raise up to
£1.35 million.



Afrex Joint Ventures

All of the Afrex exploration interests are held within a joint venture ("JV")
with Pancontinental Oil & Gas NL ("Pancontinental"), a company listed on the
ASX. The Chairman of Pancontinental is Mr Henry David Kennedy, who is also a
director of Afrex and through his private group is a major shareholder in Afrex
and a proposed Director of Black Rock should the acquisition of Afrex be
completed.  Afrex has a 60% interest and Pancontinental has a 40% interest in
the JV.  Afrex has granted a 2% royalty on its entitlement to sales of oil and
gas derived from the projects to the benefit of the current shareholders of
Afrex.  Black Rock has negotiated an option to acquire this royalty interest
under certain terms and conditions.



Offshore Malta

The JV has acquired Area 5 and Area 4/Block 3, offshore Malta under an
Exploration Study Agreement (ESA) with the Maltese government.  These two blocks
total approximately 14,800 sq kms (3.6 million acres). The ESA is for an initial
term of 18 months, commencing in July 2001 and it may be renewed year by year
for a further three years. The exclusive agreement provides the right for the JV
to obtain a Production Sharing Agreement over the area at any time during the
term of the ESA.  These blocks are in the same geological province as the
offshore fields of Tunisia and Libya where large reserves are contained in
fields such as Ashtart in Tunisia (reported by ETAP (the Tunisian national oil
company) to contain reserves of 290 million barrels recoverable of oil) and
Bouri in Libya (reported by ETAP to contain over 2.5 billion barrels recoverable
of oil).



The JV has completed the acquisition, processing and preliminary interpretation
of a 75 kilometre seismic survey to evaluate the size and characteristics of a
number of interpreted Cretaceous to Eocene age bioherm / reef features, first
observed on one of two existing seismic lines in Block 5.  Similar features in
Libya and Tunisia contain significant hydrocarbon reserves.




The seismic survey consisted of two new seismic profiles, parallel to and 5
kilometres either side of an existing seismic line, as well as a new crossing
line.  On preliminary interpretation the bioherm / reef features are large and
extend past the outer seismic lines to the north, with the exception of one
feature which, on preliminary interpretation, appears to be fully closed within
the seismic grid. Structural closure of all features is indicated to the south.
The structures require further seismic verification.



Both Libya and Tunisia claim sovereignty over parts of these blocks but the JV
believes that the most significant leads they are exploring are in a part of the
area which is undisputed and claimed only by Malta.



Kenya

The JV has recently concluded negotiations with the authorities in Kenya to
acquire three permits, L6, L8 and L9 under Production Sharing Agreements.  The
agreements for these blocks are planned to be signed in Nairobi in May 2002.
The three blocks have a combined total area of 21,433 sq kms (subject to
confirmation or amendment by the Kenyan authorities) (approximately 5.3 million
acres).  The blocks are partly onshore but mainly offshore in water depths
extending to 1,500 metres whilst primarily at depths of less than 1,000 metres.
Several large leads in the Mesozoic and Lower Tertiary in both clastic and
carbonate sequences have been identified from old seismic data.  A Tertiary
deltaic system resembles in some aspects, major hydrocarbon provinces elsewhere
in Africa.  The seismic data will be reinterpreted in the initial phase of the
work programme agreed with the Kenyan authorities.  The area appears to have all
the components necessary to host significant hydrocarbon reserves.



Other areas

The JV is in the advanced stages of negotiations with the Moroccan authorities
concerning a large offshore block and expects to conclude an agreement shortly.
Discussions between Afrex and several other African governments are also in
progress with regard to additional areas of technical and commercial merit
comparable to the Malta and Kenya projects.



Acquisition of Afrex

The consideration for the acquisition of Afrex is £900,000 to be satisfied by
the issue of 60 million new ordinary shares in Black Rock at 1.5 pence per share
with 30 million attached warrants exercisable at 1 pence prior to 31 December
2005 ("Afrex Warrants").  The Afrex Warrants are to be issued on the same terms
and conditions as the existing warrants in Black Rock other than the expiry
date.  It is proposed to seek existing warrant holder approval to amend the
expiry date of existing warrants in Black Rock to 31 December 2005 to coincide
with the expiry date for the Afrex Warrants whereupon application will be made
for admission to AIM of the Afrex Warrants.  The acquisition of Afrex is subject
to final due diligence, together with a number of other conditions precedent
including approval by Black Rock shareholders.  A summary of the material
conditions  is as follows:



1.     Black Rock must complete a fund raising of at least £100,000
through the issue of new warrants by 15 May 2002. Black Rock proposes to issue
up to 20 million warrants with an exercise price of 1 pence each, on the same
terms and conditions as the Afrex Warrants for a consideration of 1 pence per
warrant.  It is proposed to make application for admission to AIM of these
warrants conditional on existing shareholder and warrant holder approval to
amend the expiry date of existing warrants referred to above.



2.     Black Rock must satisfy all conditions precedent related to
the acquisition no later than 30 June 2002.



3.     Black Rock must obtain a listing of a foreign security
instrument of Black Rock,  (a CHESS Depository Instrument ("CDI")) on the ASX,
on or before 30 June 2002, for existing Black Rock ordinary shares and new Black
Rock shares issued pursuant to the acquisition of Afrex and to the proposed
placing in Australia.  It is intended to investigate the listing in Australia of
CDI's representing any Black Rock warrants.  An Australian prospectus will be
prepared and registered in Australia in relation to the listing of CDI's.



4.     Black Rock is to raise up to £1.35 million in conjunction
with its listing on the ASX through the issue and placing of up to 90 million
fully paid ordinary shares in Black Rock at an issue price equivalent to 1.5
pence per share with every two shares having an attaching free warrant on the
same terms and conditions as the Afrex Warrants.  An Australian prospectus will
be prepared and registered in Australia in relation to this listing and placing.
  It is proposed to make application for admission to AIM of the attaching free
warrants conditional on existing shareholder and warrant holder approval to
amend the expiry date of existing warrants.



5.     Black Rock must obtain all relevant regulatory approvals.



6.     Immediately following completion of the transaction Messrs
Henry David Kennedy and Roy Barry Rushworth are to be appointed to the Board of
Directors of Black Rock with the intention that Mr Rushworth be responsible to
the Board for all petroleum activities in an executive capacity and Mr Kennedy
be a non-executive Director.  Following the appointment of Messrs Kennedy and
Rushworth, Mr John Scott will resign from the board.



It is intended that service contracts will be entered into with the proposed
directors on completion of the transaction on terms to be agreed.





Capital Structure

The table below sets out Black Rock's capital structure assuming completion of
the acquisition of Afrex and the proposed placing in Australia.


                                          Shares            Warrants   Warrant expiry and exercise price
Existing                              85,875,200          42,100,200                1 May 2004 @ 1 pence

                                                                          (to be changed to 31 Dec 2005)

Advisors                                                   4,845,012             25 April 2003 @ 5 pence

Afrex Vendors                         60,000,000          30,000,000               31 Dec 2005 @ 1 pence

Warrant issue                                             20,000,000               31 Dec 2005 @ 1 pence
Proposed Australian Listing           90,000,000          45,000,000               31 Dec 2005 @ 1 pence
                                     235,875,200         141,945,212



Other Developments



The following agreements have been entered into and changes in Board composition
have occurred.



1.        As part of the acquisition of Afrex, Black Rock Resources (UK) Limited
(BRR), a subsidiary of Black Rock, has entered into a Heads of Agreement with
PGA Consultants Pty Ltd ("PGA"), a company associated with Mr John Scott,
regarding a farm-out and financing arrangement for up to 75% of Black Rock's
interest in BRR which holds the Black Rock group's onshore UK licences as
follows:


Region                                               Project
Weald Basin Southern England                         PEDL 042, 026 and 099
Wessex Basin Southern England                        PEDL 098 and PEDL 113



The proposed sale of the interest in BRR to PGA is based on the following
material terms:



(i)    Black Rock will grant to PGA an option to acquire up to 75
per cent of BRR or up to 75 per cent of BRR's interest in the licences held by
BRR.



(ii)   The option must be exercised within a period of six months
from completion of the Afrex acquisition ("Option Period").



(iii)  During the Option Period:



(a)    BRR may relinquish some or all of the licences in which case the parties
must not acquire an interest in the area the subject of the relinquished licence
for a period of not less than three years; and/or



(b)   BRR may fund obligations in respect of the licences in which case the
repayment to BRR of any expenditure becomes a condition of the exercise of the
option.



(iv)   PGA must use all reasonable endeavours to obtain financing for
BRR including, without limitation by raising new capital, a merger of BRR with
another company, by farming out obligations in the licences or as otherwise
agreed between the parties provided that no refinancing results in Black Rock
diluting its equity interest in BRR below 25 percent without the prior approval
of Black Rock.



(v)    The financing referred to in paragraph (iv) above must
include as a minimum all estimated expenditure to be incurred by BRR up to but
not including the drilling of first well in each licence but including the
drilling of the well in one of the licences.



(vi)   If it is necessary to dilute an interest of a party in order
to obtain financing as contemplated by paragraphs (iv) and (v) above any such
dilution will come from the sale or other disposal of PGA's shares in BRR or its
pro rata interest in the licences as required.



(vii)  The grant of any option contemplated by the parties is subject
to any required approvals and formal documentation.



The Heads of Agreement between PGA and BRR does not involve any proceeds to
Black Rock as the intention with PGA is for PGA to obtain financing for the
licences for Black Rock.  Black Rock wishes to maintain an interest in the
licences through its shareholding in BRR in exchange for financing organised by
PGA.  The valuation of the licences held by BRR as previously disclosed in Black
Rock's admission document to AIM of April 2001 together with the acquisition of
PEDL113 at cost is approximately US$1.7 million.




As the proposed arrangements with PGA fall within the related party rules of AIM
the Directors of Black Rock, excluding Mr John Scott, having consulted with
their nominated advisor, who has concurred with the opinion of the Directors of
Black Rock, other than John Scott, that the proposed terms of the transaction
with PGA are fair and reasonable insofar as Black Rock shareholders are
concerned.



2.    Mr John Tarrant recently resigned from the Board of Black Rock and as
consideration for the cancellation of his employment contract, Black Rock has
agreed to issue to him 1,250,000 new Black Rock ordinary shares at an issue
price of 1.5 pence per share credited as fully paid in respect of his retirement
and a payment in cash of A$10,000.



3.    Mr Nick Archibald resigned from the Board of Black Rock on 30 April 2002
due to the expansion of his primary business of Fractal Graphics Pty Ltd.



Circular to Shareholders and Extraordinary General Meeting



Further details of the proposed Afrex acquisition, the placing and the
arrangements with PGA will be set out, together with a copy of the Australia
prospectus relating to the CDI's in the notice of extraordinary general meetings
which will be sent to shareholders in relation to the proposals above.



The Directors of Afrex accept responsibility for the information contained in
this announcement relating to Afrex. To the best of the knowledge and belief of
the Directors of Afrex (who have taken all reasonable care to ensure that such
is the case), such information is in accordance with the facts and does not omit
anything likely to affect the importance of such information.



The Directors of Black Rock accept responsibility for the information contained
in this announcement other than that for which the Directors of Afrex are
responsible.  To the best of the knowledge and belief of the Directors of Black
Rock (who have taken all reasonable care to ensure that such is the case), such
information is in accordance with the facts and does not omit anything likely to
affect the importance of such information.



For further information contact:


David Steinepreis, Chairman, Pert, W. Australia
Phone: [phone]                         Email: [e-mail]

John Scott, Managing Director, Perth, W. Australia
Phone: [phone]                         Email: [e-mail]

Julian Riddick, Director, London
Phone: [phone]                          Email: [e-mail]



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