International Oil and Gas Tech Ltd Proposed equity issue and EGM (4550O)

TIDMOGT

RNS Number : 4550O

International Oil and Gas Tech Ltd

19 September 2013

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

19 September 2013

INTERNATIONAL OIL AND GAS TECHNOLOGY LIMITED

("IOGT" or the "Company")

PROPOSED EQUITY ISSUE AND EGM

   1.      Introduction 

Further to the announcement of 12 September 2013, the Company announces a proposed equity issue to raise gross proceeds of US$ 2,121,684 through a Placing of 707,228 Placing Shares at US$3 per Share.

The Placing has now closed, the Company having received the following irrevocable commitments to subscribe in aggregate for all of the Placing Shares at the Placing Price:

   --      683,398 Placing Shares have been subscribed for by certain of the Shareholders; 
   --      21,497 Placing Shares have been subscribed for by the Directors; and 
   --      2,333 Placing Shares have been subscribed for by the Investment Manager. 

The Placing is conditional, inter alia, on Shareholder approval and Admission. A circular will be sent to Shareholders as soon as practicable and will include a notice convening the Extraordinary General Meeting to be held on 16 October 2013.

   2.      Overview 

The Company's investment portfolio comprises three investments in early-stage, growth companies. The Board has said a number of times over the last few years that the primary goal of the Company was to invest, develop and exit from investee companies and the Board has now concluded that it is time to complete orderly exits from all three remaining portfolio investments within the next 24 months and return proceeds to Shareholders. In order to avoid a rushed sales process, and bearing in mind the Company's deteriorating cash position, which has been exacerbated by the cost of litigation, the Company has canvassed Shareholders representing more than 50 per cent. of the issued share capital of the Company. Without additional funds, the Company would need to address its liquidity position by undertaking the immediate sale of some or all of its investments, as more fully described in section 4 below.

The Board is proposing the Placing to raise new equity capital with the objectives of improving its deteriorating cash position and thereby:

-- meeting the anticipated capital requirements of the Company and, to a lesser extent, its investee companies while it pursues the orderly realisation of its assets; and

-- mitigating the erosion of Shareholder value that would otherwise result from rushed sales processes or capital starvation of the investee companies.

The Company has no debt or other form of leverage, and does not consider that it is practical to obtain a debt facility since very few of the assets of the Company currently generates any income.

   3.      Portfolio update 

The unaudited NAV of the Company as at 30 June 2013 was US$ 58,195,400, equivalent to US$7.98 per Share. This NAV calculation is based on the valuation model in use for several years. The Company's portfolio investments are private companies that are still on the steep portion of their individual learning and business development curves and the Board would emphasise that its valuations of the investee companies are based in part on estimates of future performance. They also assume an orderly sale process and consistent underlying financial performance. The valuations given are Tier III valuations which require a high degree of judgment in the valuation of illiquid assets and which therefore may not reflect the price ultimately agreed between a willing buyer and a willing seller. The NAV is also calculated on the assumption that the Company continues as a going concern and that the underlying assets are realised at market rather than distressed value.

The Company's portfolio of investments currently consists of three companies: Strata (unaudited fair value of US$36.9 million as at 30 June 2013), SR2020 (US$14.0 million), and Crest Energy (US$4.0 million).

Set out below, in summary, is an update of the performance of each of these investments:

Strata

The Company owns approximately 43 per cent. of the issued share capital of Strata and a US$2 million unsecured loan note in its favour which is repayable on demand, but repayment of which is currently prohibited by Strata's other lenders for the reasons disclosed below.

Strata has for many years been one of the leading providers of UBD services in its domestic Canadian market, where it has a strong market share. Strata has established an enviable reputation amongst the major Canadian oil and gas companies with its patented RFD equipment and the quality and efficiency of its service provision.

During 2012, Strata established UBD services in Kurdistan. Operations in this region have continued to expand, with two new long-term contracts due to commence in H2/2013.

An important development has been the increasing and industry-wide acceptance of MPD services; these enable operators to increase drilling efficiency and safety by drilling close to balance with the formation pressure, with constant positive control of drilling fluids. Strata has developed a service package centred on its proprietary RFDs and automated drilling chokes. Strata's MPD services have started to gain market share in the US where, in concert with the appointment of a local country manager, the company is expanding operations with several major US operators. MPD is particularly attractive to operators in the booming shale drilling sector in the US, where safety and efficiency are coming under intense scrutiny.

This greater geographical diversification should allow Strata to mitigate the impact of downturns in the potentially more volatile Canadian home market.

Performance for H1/2013 has still been affected by the aftermath of the dramatic slump in drilling activity in Canada during H2/2012. Revenues for the six months to 31 May 2013 were C$10.3 million with EBITDA of C$0.3 million. The slow first six months means that the full-year revenue outturn is likely to be flat compared to FY/2012. As a result of the lower revenues and EBITDA in 2012 and H1/2013, Strata does not currently meet its twelve-month trailing EBITDA covenant under its debt facility. Resolution of this may require a combination of short-term cost reduction within the research and development department together with an injection of up to C$ 5 million of subordinated debt and/or equity. Investors should note that, if the foregoing cannot be achieved over the coming three months, there is a material risk that the Company's sale of its interest in Strata will need to be accelerated, with potential negative effects on exit price.

However, Strata forecasts that H2/2013 will show a significant improvement, with high current levels of equipment utilisation in all three operating regions. The outlook for the next 12 months is stronger, with monthly revenues, many already contracted, forecast to exceed significantly those of the previous twelve-month period.

The company has until recently continued with its development programme for offshore MPD technology. This will provide Strata with added technical differentiation and the potential to penetrate the lucrative offshore market.

With high equipment utilisation anticipated for the next 12 months, successful expansion into the US and Middle East, and proprietary offshore technology, the future of the investment in Strata looks most promising if its short-term cash flow issues can be resolved at a reasonable price or with an acceptable level of dilution. We are working on this issue assiduously with both Strata and its lenders.

Crest Energy

The Company owns 100 per cent. of the issued share capital of Crest Energy, subject to an agreement to provide for shares to be issued to management representing up to 25 per cent. of the issued share capital of Crest Energy.

Crest Energy currently focuses on providing nitrogen-purging services to national oil companies and other operators in the Middle East. Crest Energy is headquartered in Dubai, United Arab Emirates and has an operations base in al-Khobar, Saudi Arabia, from which it serves Saudi Aramco.

Crest Energy continued to increase revenues at a rapid rate during H1/2013, with revenues for the six months of US$1.3 million compared to total revenues in 2012 of just over US$1.0 million. Based on current activity levels, full-year revenues are expected to exceed US$2.2 million. Margins remained high and Crest Energy was EBITDA-positive during the first half of 2013. As in 2012, this revenue was earned exclusively from operations in Saudi Arabia by providing nitrogen-purging services using Crest Energy's membrane nitrogen-generation units.

During the last six months, Crest Energy continued to own two units: a single, high-capacity (2000 scf/m) membrane nitrogen unit that was deployed to major pipeline-purging projects and on powerstation infrastructure-purging operations and a smaller (580scf/m) unit, which is on a long-term contract and assigned exclusively to nitrogen-purging operations on power-station infrastructure in Saudi Arabia. Although Crest Energy has periodically deployed rental equipment on operations, it does not seek actively to pursue a business model based on significant usage of rental equipment, which carries lower margins with more cash-flow risk.

Crest Energy has had to decline offered work due to lack of available equipment. An increase in Crest Energy's asset base would enable it to meet at least part of this excess demand. However, to take full advantage of that demand will require further capital investment. Furthermore, current high utilisation levels of equipment restrict Crest Energy's ability to tender for new work in H2/2013 because it cannot be certain when existing contracts will finish. Without investment in new equipment, Crest Energy is likely to achieve lower revenues and working capital in the H2/2013.

SR2020

The Company owns 100 per cent. of the issued share capital and debt of SR2020, which is subject to dilution of up to 30 per cent. through an Employee Share Ownership Programme established to incentivise and retain key employees of SR2020.

SR2020 provides borehole seismic acquisition and processing services in the US. Its headquarters are in Brea, California, where the company's geophysicists undertake seismic-data processing for both its client borehole seismic data acquired by its own equipment and for data sets acquired by third parties. SR2020 processes both conventional and borehole seismic data from third parties, particularly specialising in difficult situations such as sub-salt surveys.

SR2020 has an operations base in Houston, Texas from where its proprietary tubing-conveyed borehole seismic-array equipment is deployed.

SR2020 enjoyed a three-fold increase in income during 2012. However, revenues of US$0.9 million in H1/2013 were disappointing. Reduced acquisition revenue, which was caused by a shortage of equipment, resulted in lower associated processing income. The key new acquisition equipment ordered in 2012 has been further delayed, with delivery not now expected until later in H2/2013. As a result, SR2020 expects full-year revenues to remain flat compared to 2012. Additional capital is required to purchase the new equipment and further working capital to achieve sales growth, although SR2020 has continued to strengthen its sales team to provide better customer awareness of its capabilities.

The Investment Manager is working with SR2020 to increase its revenues and exploring all avenues to address the need to improve SR2020's acquisition capabilities. However, it should be noted that the current ability of the Company to provide further support to SR2020 is limited.

   4.      Reasons for the Placing 

As disclosed in the unaudited interim financial statements of the Company to 30 June 2013 announced on 30 August 2013, the cash balance of the Company continued to reduce over the previous twelve months. As at 30 June 2012, it was US$7,901,935, by 31 December 2012 it had reduced to US$5,055, 889 and as at 30 June 2013 it was US$2,967,139. During the two six-month periods to 30 June 2013, the net follow-on investment in investee companies totalled US$1,995,000 and US$600,000 respectively. The balance of the reduction in cash was due almost entirely to the ongoing running costs of the Company and the need to fund the Company's defence in the litigation. The Company's cash balance as at the date of this document had further reduced to US$1,689,194 and the Company anticipates that to maintain solvency without the provision of further capital pursuant to the Placing, it would have to be certain of receiving the proceeds from the sale of an investment by November 2013 and would therefore immediately have to commence a distressed short-form sales process.

The Directors and the Investment Manager consider that a short-form sales process would not be in the best interests of Shareholders as a whole for the following reasons:

-- A distressed seller of assets can find it difficult to achieve an appropriate price on a sale of those assets where potential purchasers are aware of the distress. In a short-form sales process, the price likely to be achieved on a sale could be dramatically less than the relevant component NAV or the price that could be achieved on an orderly disposal;

-- Strata, which (as set out above) comprises the majority of the NAV of the Company, experienced poor trading in 2012 which continued through the first half of 2013. It is currently operating under a forbearance letter from its principal lender. Any immediate sale is therefore likely to be at a distressed price. However, the Board and the Investment Manager believe its technology and services are of very high quality, and its principal service, MPD, is increasingly becoming the industry standard form of drilling. In addition, development of its offshore equipment nears completion and its awarded and contracted work for the coming twelve months should show increased revenues.

Therefore, the Board considers that the further equity required for the Placing should be more than compensated by achieving a more appropriate exit price for the interest in Strata and avoiding the disposal of an investment with which the Board perceives has significant intrinsic value for a distressed short-form sale price.

   5.      Litigation 

Quorum issued proceedings in the High Court, Queen's Bench (Commercial Court) on 17 January 2012 claiming damages of US$15.7 million for wrongful termination of the original investment management agreement. The Company has in response advanced in the proceedings a counterclaim, as yet unquantified, alleging mismanagement of the Company's investments whilst Quorum was co-investment manager.

The exchange of documentary evidence has taken place and the exchange of witness statements is scheduled to occur in September 2013. The Board continues to take advice on the merits and defence of the case from Norton Rose Fulbright LLP and Queen's Counsel. A date for trial has been fixed for March 2014.

The Board and its advisers in this matter continue to view the claim by Quorum as entirely without merit and the damages claimed as inflated, speculative and far-fetched.

As reported in the year-end accounts, of Quorum's total claim for US$15.7 million the first head of damage claims loss of management and transaction fees during the three-year notice period and (based on the Company's NAV at the date of termination) amounts to approximately US$4 million. The recovery by Quorum of this head of damage can only occur if the Court rules at trial that (contrary to advice taken by the Board in 2010) dismissal of the co-managers was wrongful and represented a breach of contract. The second head of damages, which seeks compensation for lost future transaction fees, performance fees and options, and other consequential losses, amounts to approximately US$11.7 million. This part of the claim makes a number of assumptions, including that the Company would not only have permitted Quorum to make further and new investments but that the Company would have also raised more capital and both existing and new investments would have performed well. The Board has been advised that, as a matter of English law, Quorum will fail to recover the second head of damages. Attempts to settle the proceedings have been made in meetings and through written offers (the terms of which cannot be divulged for legal reasons) but the terms and amounts have been unacceptable.

Notwithstanding the rules of the High Court of England and Wales on the recoverability of costs of litigation, parties generally incur around 25 per cent. costs that are not recoverable even on a successful outcome. The Company has budgeted to incur a further US$1.4 million in defending the claim. Legal costs incurred to date of nearly US $1.5 million have been expensed. No provision or asset has been recognised for any future costs or recoveries. The Company has been awarded security for a proportion of its costs by the Court.

   6.      Use of proceeds 

The proceeds from the Placing are expected to be used to meet the on-going expenses, including meeting costs and expenses connected with the litigation, of the Company and to make follow-on capital investments in the investee companies.

Subject to Shareholder approval of the Resolutions, the Placing is expected to provide aggregate net proceeds to the Company of approximately US$ 2 million, excluding certain deferred costs of approximately US$ 160,000. On this basis, the Company believes that it should have sufficient working capital until at least 31 December 2014, based on assumptions which the Board considers to be reasonable on the basis of information currently available to them.

Shareholders should be aware that receipt of the Placing proceeds does not necessarily preclude the possibility of the Company having to effect a short-form sale process for some or all of its assets, which would be likely to have a negative impact on the value received by the Company. The Company's key assumptions in assessing its working capital requirements are set out in the Risk Factors section of the Circular.

   7.      Dividend policy and returns to shareholders 

The Company's investments are not income generating and therefore the Company no longer has a policy of paying dividends.

On realisations of the Company's investments, and subject to the retention of appropriate capital pending the resolution of the litigation, and to meet the Company's and the investee companies' working capital requirements, it is the intention of the Board to return capital to the Shareholders.

   8.      Further information in relation to the equity issue 

The Placing is conditional on, among other things, satisfaction of the following conditions:

   --      the passing at the EGM of the Resolutions; 

-- the Placing Agreement not having been terminated in accordance with its terms prior to Admission; and

   --      Admission becoming effective. 

In connection with the Placing, the Company, the Investment Manager and Numis Securities Limited have entered into the Placing Agreement pursuant to which and conditional upon, inter alia, admission of the Placing Shares to the Official List of the UKLA taking place on or before 31 October 2013, Numis Securities Limited has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing is not underwritten.

The Placing Agreement contains customary warranties and indemnities from the Company and the Investment Manager in favour of Numis Securities Limited, certain undertakings from the Company to Numis Securities Limited relating to the conduct of the Company's business and provisions which enable Numis Securities Limited to terminate the Placing Agreement in certain circumstances prior to admission, including where any warranties are found to be untrue, inaccurate or misleading in a material respect and also in the event of a material adverse change in the financial position or prospects of the Company or in national or international financial, market, economic or political conditions.

Under the Placing Agreement, the Company has agreed to pay Numis Securities Limited a fixed fee. The Company has also agreed to pay all other costs, charges and expenses incidental to the Placing and admission.

Applications will be made for the Placing Shares to be admitted to listing on the Official List (by way of a standard listing under Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange's Main Market. It is expected that Admission will become effective and dealings in the Placing Shares will commence at 8.00 a.m. on 21 October 2013. The Placing Shares will, when issued and fully paid, rank pari passu in all respects with the Shares.

It is expected that CREST accounts will be credited with entitlements to Placing Shares as soon as practicable after 8.00 a.m. on the day of Admission (as the case may be) and that share certificates (where applicable) will be dispatched by 25 October 2013.

   9.      Investment Management Agreement 

The Board will keep the Company's agreement with the Investment Manager under review and may seek in due course to propose a revised arrangement that provides the Investment Manager with appropriate certainty of tenure while encouraging it to complete asset realisations on a timely basis. Amendments to the agreement require the consent of both parties and accordingly there can be no assurance that any amendments will be made.

   10.    Regulatory 

The number of Shares which may be issued under the Placing will be limited to 707,228. As this number represents less than 10 per cent. of the existing Shares currently admitted to trading on the London Stock Exchange, the Company is exempt from publishing a prospectus under the Prospectus Rules.

The Company has previously given undertakings regarding certain Listing Rules which are not applicable to it as an issuer admitted to listing on the Official List by way of a standard listing under Chapter 14 of the Listing Rules.

Specifically:

-- in proposing Resolution 1 (Approval of Placing) the Company is voluntarily complying with Listing Rule 15.4.11 which if applicable to the Company would preclude issues of further Shares at prices below the NAV of those Shares without the approval of Shareholders; and

-- the Company notifies Shareholders that the subscribers to the Placing include certain major Shareholders, the Directors and the Investment Manager, each of whom would be deemed related parties to the Company under Chapter 11 of the Listing Rules if this chapter was applicable to the Company.

   11.    Placing to the Directors and Investment Manager 

The Directors have subscribed in aggregate for 21,497 Placing Shares and the Investment Manager has subscribed for 2,333 Placing Shares.

   12.    Risk Factors 

Shareholders' attention is drawn to the Risk Factors section of the Circular and specifically to the risks disclosed in relation to the Company's:

   --      lack of additional funds; 
   --      ongoing litigation; and 
   --      working capital. 
   13.    EGM 

Notice of an EGM of the Company to be held at the offices of the Company Secretary (Regency Court, Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3RH) at 10 a.m. (UK time) on 16 October 2013 is set out at the end of the Circular. Shareholders are requested to complete and return the Form of Proxy whether or not they intend to be present at the EGM. To be valid, the Form of Proxy should be completed and signed in accordance with the instructions printed on it and returned by post or by hand so as to reach the Company's registrar, as soon as possible and no later than 10 a.m. on 14 October 2013. The completion and return of a Form of Proxy will not preclude a Shareholder from attending and voting at the EGM.

A summary and explanation of the Resolutions are set out below. Please note that this is not the full text of the Resolutions and this section should be read in conjunction with the Resolutions contained in the Notice of EGM at the end of the Circular.

Resolution 1 - Approval of Placing

To approve the terms of the Placing at the Issue Price of US$3 for each Placing Share being issued pursuant to the Placing (which represents a discount of 62.4 per cent. to the unaudited NAV per existing Share as at 30 June 2013, which is the latest published NAV prior to the announcement of the Placing).

Resolution 2 - Authority to allot shares

To authorise the Directors for the purposes of Articles 4(A) of the Articles to exercise all the powers of the Company to allot the Placing Shares to the placees up to an aggregate nominal amount of US$ 707,228 (representing an amount equal to 9.70 per cent. of the issued Shares on today's date) during the period commencing on the date of the passing of the Resolutions and expiring at the conclusion of the next Annual General Meeting of the Company. The Company will allot the Placing Shares on a non pre-emptive basis. The Articles and Guernsey companies law do not require the Company to disapply pre-emption rights to issues shares on a non pre-emptive basis.

The Resolutions will be proposed as ordinary resolutions (requiring a simple majority of the votes cast).

   14.    Action to be taken 

Shareholders are asked to complete and return the Form of Proxy to the Company's registrar, so as to be received as soon as possible, and to arrive no later than 48 hours before the time of the EGM.

Completion and return of a Form of Proxy will not affect a Shareholder's right to attend and vote at the EGM should he or she wish to do so.

   15.    Importance of the Placing 

As more fully described above, the Company's cash position is deteriorating, exacerbated by the cost of litigation. If the Resolutions are not approved, the Company will not be in a position to complete the Placing and the Board anticipates that in this circumstance it will immediately have to commence a distressed short form sales process for the Company's assets. The Board anticipates that such a process would be likely to result in a significant erosion of Shareholder value.

   16.    Recommendation 

The Board considers that the Placing and each of the Resolutions are in the best interests of the Company and the Shareholders of the Company as a whole. Accordingly, the Board unanimously recommends Shareholders to vote in favour of each of the Resolutions, as the Directors intend to do with their own beneficial shareholdings held at the time of the EGM, amounting to 65,474 Shares in aggregate at the date of this document, representing approximately 0.9 per cent. of the Company's current issued Shares.

FOR FURTHER INFORMATION

Numis Securities Limited

Nathan Brown / Hugh Jonathan, Corporate Broking & Finance

Tel: [phone] / 1263

NOTES TO EDITORS

International Oil and Gas Technology Limited is an authorised closed-ended investment company incorporated in Guernsey. IOGT invests expansion capital into companies that provide services and technology to the upstream oil and gas industry. These companies have proprietary and proven technologies, services and/or processes that can be deployed more rapidly or on a larger scale through the introduction of growth capital. Such companies are likely to have recurring annual revenues of between US$5 million and US$25 million, positive EBITDA and/or significant working capital, and strong management teams. IOGT was admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange on 7 January 2008. Its stock market EPIC is OGT.L. Further information can be found at www.international-ogt.com.

EXPECTED TIMETABLE

 
 Deadline for receipt of forms        10 a.m. on 14 October 2013 
  of proxy 
 Extraordinary General Meeting        10 a.m. on 16 October 2013 
 Placing Shares issued, Admission      8 a.m. on 21 October 2013 
  effective and dealings in the 
  Placing Shares to commence 
 CREST accounts credited with          8 a.m. on 21 October 2013 
  the Placing Shares 
 Share certificates for the Placing           By 25 October 2013 
  Shares despatched 
 

The times and dates set out in this expected timetable and mentioned elsewhere in this document may be adjusted by the Company, in which event details of the new times and dates will be notified, as required, to the UK Listing Authority and the London Stock Exchange and, where appropriate, Shareholders.

DEFINITIONS

In this document the following expressions shall have the meanings set out below, save where the context may otherwise require:

   "1994 Law"           the Companies (Guernsey) Law, 1994 (as amended); 

"Admission" admission of the Placing Shares to the Official List and to trading on the London Stock Exchange becoming effective;

   "AIFM"                     alternative investment fund manager; 
   "Articles"                the articles of association of the Company; 

"Board" the board of directors of the Company, or as the context may require, the directors of the Company from time to time;

"Business Day" a day on which banks and stock exchanges in Guernsey and London are normally open for business;

   "C$"                        the lawful currency of Canada; 

"Company" or

   "IOGT"                    International Oil and Gas Technology Limited; 

"CREST" the paperless settlement procedure operated by CRESTCo under the CREST Regulations enabling securities to be evidenced otherwise than by certificates and transferred otherwise than by written instrument;

   "CRESTCo"          Euroclear UK and Ireland Limited; 
   "Crest Energy"      Crest Energy Services; 

"CREST

   Regulations"        UK Uncertificated Securities Regulations, 2001 (SI2001/3775), as amended; 
   "Directors"             the directors of the Company from time to time; 

"Disclosure and

Transparency

   Rules"                    the FCA's Disclosure Rules and Transparency Rules; 
   "EBITDA"               earnings before interest, taxes, depreciation and amortisation; 

"EGM" the extraordinary general meeting to be held at 10 a.m. on 16 October 2013;

   "AIFM Directive"    the EU Alternative Investment Fund Managers Directive (No. 2011/61/EU); 
   "FCA"                      the UK Financial Conduct Authority; 

"FSMA" the UK Financial Services and Markets Act 2000 (as may be amended from time to time);

"Investment

Management

Agreement" the investment management and advisory agreement entered into between the Company and the Investment Manager which is currently in force;

"Investment

Manager" Linton Capital LLP, a limited liability partnership incorporated under the laws of England and Wales;

   "Listing Rules"     the listing rules of the UK Listing Authority; 

"London Stock

   Exchange"             the London Stock Exchange plc; 
   "MPD"                     managed-pressure drilling; 

"NAV" the total assets of the Company less its total liabilities (including accrued but unpaid fees) valued in accordance with the Company's accounting policies adopted from time to time by the Company and expressed in US$;

   "Official List"         the official list maintained by the UK Listing Authority; 
   "OPEC"                  the Organisation of Petroleum Exporting Countries; 
   "Options"               the options which have been granted to the Optionholders; 

"Optionholders" persons connected with the former co-manager, Quorum, and with the now-defunct investment advisory committee established by that co-manager;

   "Placing"                the conditional placing of 707,228 Shares, as described in this document; 

"Placing

Agreement" means the placing agreement entered into between the Company, the Investment Manager and Numis Securities Limited dated 18 September 2013;

   "Placing Price"     US$3 per Share; 

"Placing Shares" participating redeemable preference shares of US$1 each in the share capital of the Company to be issued by the Company at the Placing Price pursuant to the Placing;

"Prospectus

   Directive"               EU Prospectus Directive (2003/71/EC); 

"Prospectus

   Rules"                    the Prospectus Rules published by the FCA from time to time; 
   "Quorum"              QOGT Inc.; 

"Resolutions" the resolutions to be proposed at the EGM in connection with the Placing, notice of which is set out in this document;

   "RFD"                     rotating flow diverter; 
   "Securities Act"     the US Securities Act of 1933, as amended; 
   "Shareholder"       a holder of Shares; 

"Shares" the participating redeemable preference shares of US$1 each in the share capital of the Company and includes the Placing Shares;

   "SR2020"              SR2020 Inc.; 
   "GBP" or "Sterling"     the lawful currency of the United Kingdom; 
   "Strata"                   STRATA Energy Services Inc.; 
   "UBD"                     underbalanced drilling; 

"UK Listing

Authority" the FCA, in its capacity as the competent authority for the purpose of Part IX of FSMA;

"US" or

"United States" the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;

"US Person" a citizen or resident of the United States, a corporation, partnership or other entity created or organised in or under the laws of the United States or any person: (i) falling within the definition of the term "United States Person" in Regulation S promulgated under the US Securities Act; or (ii) who is not a "Non-United States person" as that term is defined in Rule 4.7 promulgated under the Commodity Exchange Act;

"US$" or "US

   Dollars"                 the lawful currency of the United States; 
   "EUR"                           the Euro, being the lawful currency of the European Monetary Union. 

IMPORTANT NOTICE

This Announcement has been issued by, and is the sole responsibility of, the Company.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a Placee) by making an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Members of the public are not eligible to take part in the Placing. This Announcement and the terms and conditions set out in the Appendix to this Announcement are for information purposes only and are directed only at persons in the United Kingdom who are: (a) investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) order 2005 (the Order); or (b) persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order; or (c) persons to whom it may otherwise be lawfully communicated, (all such persons together being referred to as relevant persons). This Announcement and the terms and conditions set out in the Appendix to 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 and the terms and conditions set out in the Appendix to this Announcement relate is available only to relevant persons and will be engaged in only with relevant persons.

This Announcement provides information about the Placing, but does not invite participation in the Placing. This Announcement (including the Appendix) does not constitute, and the Company is not making, an offer to the public of transferable securities within the meaning of sections 85 and 102B of the Financial Services and Markets Act 2000, as amended (FSMA). This Announcement (including the Appendix) is therefore not an approved prospectus for the purposes of section 85 of FSMA, and has not been prepared in accordance with the prospectus rules of the FCA and as such neither its contents nor its issue has been approved by the FCA or by any authority which would be a competent authority for the purposes of any legislation that implements the Prospectus Directive.

This Announcement (including the Appendix) and the information contained herein is not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or any other state or jurisdiction into which the same would be unlawful. This Announcement (including the Appendix) is for information purposes only and shall not constitute or form part of any offer to buy, sell, subscribe for, issue, or acquire, or the solicitation of any offer to buy, sell, subscribe for, issue, or acquire any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. In particular, the Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act) and may not be offered, sold or transferred, directly or indirectly, within the United States or to, or for the account of, US Persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. No public offering of the Placing Shares is being made in the United States, Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa.

Each Placee should consult with its own advisers as to legal, tax, business and related aspects of a subscription for the Placing Shares.

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis Securities Limited or for providing advice in relation to the Placing or any matter referred to in this Announcement (including the Appendix).

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. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

No representation or warranty, express or implied, is or will be made by or on behalf of Numis Securities Limited, and no responsibility or liability is or will be accepted by Numis Securities Limited or any of their respective affiliates, as to the accuracy, completeness or verification of the information set out in this Announcement (including the Appendix), and nothing contained in this Announcement (including the Appendix) is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. Numis Securities Limited and each of its affiliates accordingly disclaim, to the fullest extent permitted by law, all and any liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this Announcement (including the Appendix) or any such statement.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this Announcement is subject to change without notice and, except as required by applicable law, the Company does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a profit forecast or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.

APPENDIX - TERMS AND CONDITIONS OF APPLICATION UNDER THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING

   1.            Introduction 

The Company and Linton Capital LLP (the "Manager") have entered into an agreement with Numis Securities Limited ("Numis"), pursuant to which Numis has been appointed as placing agent in connection with the Placing (the "Placing Agreement"). Subject to the terms and conditions set out in the Placing Agreement, Numis has agreed to use its reasonable endeavours, as agent for the Company, to procure Placees to subscribe for Placing Shares at the Placing Price. The Placing is not underwritten.

The Placing Shares will rank pari passu in all respects with the Shares currently in issue, including the right to receive all dividends and other distributions declared on or after the date on which they are issued.

   2.            Application for Admission 

Applications will be made to the London Stock Exchange and the UKLA for the Placing Shares to be admitted to trading on the London Stock Exchange and for their admission to the Official List (together, "Admission"). It is expected that Admission will take place, and dealings in the Placing Shares will commence, on or about 21 October 2013.

   3.            Conditions of the Placing 

The Placing is conditional on (inter alia) Admission and the passing of the resolutions proposed in the notice of extraordinary general meeting that will accompany the Circular.

   4.            Participation in the Placing 

Each Placee which confirms its agreement to Numis to subscribe for Placing Shares under the Placing will be bound by these terms and conditions and will be deemed to have accepted them.

The Company and/or Numis may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as it (in its absolute discretion) sees fit and/or may require any such Placee to execute a separate contract note (a "Contract Note").

Numis will determine in its absolute discretion the extent of each Placee's participation in the Placing, which may not necessarily be the same for each Placee.

Each Placee's allocation will be confirmed to Placees orally by Numis and a trade confirmation or Contract Note will be dispatched as soon as possible thereafter. The oral confirmation to such Placement will constitute an irrevocable legally binding commitment upon such person who will at that point become a Placee in favour of Numis and the Company under which it agrees to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Articles of Incorporation (the "Articles").

Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time on the basis explained below under "Registration and Settlement".

   5.            No prospectus 

Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) and the RNS announcements of Company's Interim Results announcement on 30 August 2013 and of a potential issue of equity on 12 September 2013 (the "Exchange Information") and which has not been approved by, or submitted to the Financial Conduct Authority or the London Stock Exchange and subject to the further terms set forth in the Contract Note to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including the Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or Numis or any other person and none of the Company or Numis nor any other person will be liable for any Placee's decision to participate in the 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 Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation or fraud.

   6.            Agreement to subscribe for Placing Shares 

Conditional on:

6.1.1 Admission occurring and becoming effective by 8.00 a.m. (London time) on or prior to 21 October 2013 (or such later time and/or date, not being later than 31 October 2013, as the Company and Numis may agree);

6.1.2 the Placing Agreement becoming otherwise unconditional in all respects and not having been terminated in accordance with its terms prior to Admission;

6.1.3 the passing of the resolutions approving the Placing at the EGM (or any adjournment thereof); and

   6.1.4       Numis confirming to the Placees their allocation of Placing Shares, 

a Placee agrees to become a member of the Company and agrees to subscribe for those Placing Shares allocated to it by Numis at the Placing Price.

If any of the conditions contained in the Placing Agreement are not fulfilled or waived by Numis, by the respective time or date where specified, or the Placing Agreement is terminated, the Placing will not proceed and the Placee's 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. Numis may, at their discretion and upon such terms as they think fit, waive compliance by the Company or the Manager with respect to the whole or any part of any of their respective obligations in relation to the conditions in the Placing Agreement or extend that time or date by which such conditions must be satisfied. Any such waiver or extension will not affect Placees' commitments as set out in this Announcement (and the Appendix). None of the Company, Numis 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 Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally or to terminate of the Placing Agreement, and by participating in the Placing, each Placee agrees that any such decision is in the absolute discretion of Numis.

To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have.

   7.            Payment for Placing Shares 

Each Placee must pay the Placing Price for the Placing Shares issued to the Placee in the manner and by the time directed by Numis. If any Placee fails to pay as so directed and/or by the time required, the relevant Placee's application for Placing Shares shall be rejected.

   8.            Registration and Settlement 

Settlement of transactions in the Placing Shares (ISIN: GG00B29Q2M88) following Admission will take place within CREST provided that, subject to certain exceptions, Numis reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or Contract Note stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Numis (as agent for the Company) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the CREST or certificated settlement instructions that it has in place with Numis.

It is expected that settlement in respect of the Placing Shares will be on 21 October 2013 in accordance with the instructions set out in the trade confirmation.

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 Numis.

Each Placee is deemed to agree that, if it does not comply with these obligations, Numis may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Numis' account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable and shall indemnify Numis on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on Numis all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Numis lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or Contract Note 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 or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

   9.            Representations, Warranties and Further Terms 

By agreeing to subscribe for Placing Shares, each Placee which enters into a commitment to subscribe for Placing Shares will (for itself and any person(s) procured by it to subscribe for Placing Shares and any nominee(s) for any such person(s)) be deemed to represent and warrant to each of the Company, Sanlam Securities and Numis that:

9.1.1 in agreeing to subscribe for Placing Shares under the Placing, it is relying solely on this Announcement (and its Appendix) issued by the Company and not on any other information given, or representation or statement made at any time, by any person concerning the Company or the Placing. It agrees that none of the Company, Numis, nor any of their respective officers, agents employees, will have any liability for any other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any other information or representation;

9.1.2 it acknowledges and agrees that no offering document or prospectus has been, or will be, prepared in connection with the Placing and represents and warrants that it has not received, and will not receive, an offering document or prospectus;

9.1.3 it (or the beneficial owner as applicable) has all necessary capacity to commit to participation in the Placing and to perform its obligations in relation thereto and will honour such obligations;

9.1.4 if the laws of any territory or jurisdiction outside the United Kingdom are applicable to its agreement to subscribe for Placing Shares under the Placing, it warrants that it has complied with all such laws, obtained all governmental and other consents which may be required, is duly authorised and complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with its application in any territory and that it has not taken any action or omitted to take any action which will result in the Company, Numis or any of their respective officers, agents or employees acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom in connection with the Placing;

9.1.5 it has carefully read and understands this Announcement (and its Appendix) in its entirety, it has all the information it believes necessary or appropriate in connection with its decision to subscribe for Placing Shares and acknowledges that it is acquiring Placing Shares on the terms and subject to the conditions set out in this Announcement (and its Appendix) and the Articles as in force at Admission;

9.1.6 it has not relied on Numis or any person affiliated with either of them in connection with any investigation of the accuracy of any information contained in this Announcement (and its Appendix);

9.1.7 the content of this Announcement (and its Appendix) and any Exchange Information is exclusively the responsibility of the Company and its Directors and Numis, nor any person acting on their respective behalf nor any of their affiliates are responsible for or shall have any liability for any information, representation or statement contained in this Announcement (and its Appendix) or any information published by or on behalf of the Company (including Exchange Information) and will not be liable for any decision by a Placee to participate in the Placing based on any information, representation or statement contained in this Announcement (and its Appendix) or otherwise;

9.1.8 it acknowledges that no person is authorised in connection with the Placing to give any information or make any representation other than as contained in this Announcement (and its Appendix) and, if given or made, any information or representation must not be relied upon as having been authorised by Numis, the Company or any of their respective officers, agents or employees;

9.1.9 it represents and warrants that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing 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 (depository receipts and clearance services);

9.1.10 it accepts that none of the Placing Shares have been or will be registered under the laws of the United States, Canada, the Republic of South Africa, Australia or Japan. Accordingly, the Placing Shares may not be offered, sold, issued or delivered, directly or indirectly or to, or for the account of, US Persons, within any of United States, Canada, the Republic of South Africa, Australia or Japan, unless an exemption from any registration requirement is available;

9.1.11 if it is within the United Kingdom, it is a person who falls within Articles 49(2)(a) to (d) or 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 or is a person to whom the Placing Shares may otherwise lawfully be offered under such Order, or, if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, that it is a person to whom the Placing Shares may be lawfully offered under that other jurisdiction's laws and regulations;

9.1.12 in the case of any Ordinary Shares acquired by an investor as a financial intermediary as that term is used in Article 3(2) of the EU Directive 2003/71/EC (the "Prospectus Directive"): (i) the Ordinary Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of Numis has been given to the offer or resale; or (ii) where Ordinary Shares have been acquired by it on behalf of persons in any relevant Member State other than qualified investors, the offer of those Ordinary Shares to it is not treated under the Prospectus Directive as having been made to such persons;

9.1.13 if it is outside the United Kingdom, neither this Announcement (and its Appendix) nor any other offering, marketing or other material in connection with the Placing constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to subscribe for Placing Shares pursuant to the Placing unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or materials could lawfully be provided to it or such person and Placing Shares could lawfully be distributed to and subscribed and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements;

9.1.14 it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Placing Shares and it is not acting on a non-discretionary basis for any such person;

9.1.15 if the investor is a natural person, such investor is not under the age of majority (18 years of age in the United Kingdom) on the date of such investor's agreement to subscribe for Placing Shares under the Placing and will not be any such person on the date any such Placing is accepted;

9.1.16 it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this prospectus or any other offering materials concerning the Placing or the Placing Shares to any persons within the United States or to any US Persons, nor will it do any of the foregoing;

9.1.17 it represents, warrants, acknowledges and agrees that it is not a national or resident of the United States or a corporation, partnership or other entity organised under the laws of the United States or otherwise a US Person and that it will not offer, sell, renounce, transfer or deliver, directly or indirectly, any of the Placing Shares to, or for the account of, US Persons, or into the United States or any other jurisdiction where to do so would be in breach of any applicable law and/or regulation and, in addition, it acknowledges that the Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended, or with any securities regulatory authority of any state or other jurisdiction of the United States;

9.1.18 it has all the relevant permissions, authorizations and due capacity to subscribe for the Placing Shares and to perform its obligations under these terms and conditions and it acknowledges that Numis nor any of its affiliates nor any person acting on its behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing or providing any advice in relation to the Placing and participation in the Placing is on the basis that it is not and will not be a client of Numis and that Numis does not have any duties or responsibilities to it for providing protection afforded to their respective clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertaking or indemnities contained in any placing letter;

9.1.19 it acknowledges that where it is subscribing for Placing Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account: (i) to subscribe for the Placing Shares for each such account; (ii) to make on each such account's behalf the representations, warranties and agreements set out in this Appendix; and (iii) to receive on behalf of each such account any documentation relating to the Placing in the form provided by the Company and/or Numis. It agrees that the provision of this paragraph shall survive any resale of the Placing Shares by or on behalf of any such account;

9.1.20 it irrevocably appoints any director of the Company and any director of Numis to be its agent and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for all or any of the Placing Shares for which it has given a commitment under the Placing, in the event of its own failure to do so;

9.1.21 it accepts that if the Placing does not proceed or the conditions to the Placing Agreement are not satisfied or the Placing Shares for which valid applications are received and accepted are not admitted to listing and trading on London Stock Exchange for any reason whatsoever then none of Numis, Sanlam Securities, the Company, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

9.1.22 in connection with its participation in the Placing it has observed all relevant legislation and regulations, in particular (but without limitation) those relating to money laundering ("Money Laundering Legislation") and that its application is only made on the basis that it accepts full responsibility for any requirement to verify the identity of its clients and other persons in respect of whom it has applied. In addition, it warrants that it is a person: (i) subject to the Money Laundering Regulations 2007 in force in the United Kingdom; or (ii) subject to the Money Laundering Directive (2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing); or (iii) subject to the Guernsey AML Requirements; or (iv) acting in the course of a business in relation to which an overseas regulatory authority exercises regulatory functions and is based or incorporated in, or formed under the law of, a country in which there are in force provisions at least equivalent to those required by the Money Laundering Directive;

9.1.23 it acknowledges that due to anti-money laundering requirements, Numis and the Company may require proof of identity and verification of the source of the payment before the application can be processed and that, in the event of delay or failure by the applicant to produce any information required for verification purposes, Numis and the Company may refuse to accept the application and the subscription moneys relating thereto. It holds harmless and will indemnify Numis and the Company against any liability, loss or cost ensuing due to the failure to process such application, if such information as has been required has not been provided by it;

9.1.24 it acknowledges that any person in Guernsey involved in the business of the Company who has a suspicion or belief that any other person (including the Company or any person subscribing for Placing Shares) is involved in money laundering activities, is under an obligation to report such suspicion to the Financial Intelligence Service pursuant to the Terrorism and Crime (Bailiwick of Guernsey) Law, 2002 (as amended);

9.1.25 it acknowledges and agrees that information provided by it to the Company, Registrar or Administrator will be stored on the Registrar's and the Administrator's computer systems and manually. It acknowledges and agrees that for the purposes of the Data Protection (Bailiwick of Guernsey) Law 2001 (the "Data Protection Law") and other relevant data protection legislation which may be applicable, the Registrar and the Administrator are required to specify the purposes for which they will hold personal data. The Registrar and the Administrator will only use such information for the purposes set out below (collectively, the "Purposes"), being to:

9.1.25.1 process its personal data (including sensitive personal data) as required by or in connection with its holding of Placing Shares, including processing personal data in connection with credit and money laundering checks on it;

9.1.25.2 communicate with it as necessary in connection with its affairs and generally in connection with its holding of Placing Shares;

9.1.25.3 provide personal data to such third parties as the Administrator or Registrar may consider necessary in connection with its affairs and generally in connection with its holding of Placing Shares or as the Data Protection Law may require, including to third parties outside the Bailiwick of Guernsey or the European Economic Area;

9.1.25.4 without limitation, provide such personal data to the Company or the Manager and their respective associates for processing, notwithstanding that any such party may be outside the Bailiwick of Guernsey or the European Economic Area; and

9.1.25.5 process its personal data for the Administrator's internal administration.

9.1.26 in providing the Registrar and the Administrator with information, it hereby represents and warrants to the Registrar and the Administrator that it has obtained the consent of any data subject to the Registrar and the Administrator and their respective associates holding and using their personal data for the Purposes (including the explicit consent of the data subjects for the processing of any sensitive personal data for the Purpose set out in paragraph (a)). For the purposes of this prospectus, "data subject", "personal data" and "sensitive personal data" shall have the meanings attributed to them in the Data Protection Law;

9.1.27 Numis and the Company are entitled to exercise any of their rights under the Placing Agreement or any other right in their absolute discretion without any liability whatsoever to them;

9.1.28 the representations, undertakings and warranties contained in this Appendix are irrevocable. It acknowledges that Numis and the Company and their respective affiliates will rely upon the truth and accuracy of the foregoing representations and warranties and it agrees that if any of the representations or warranties made or deemed to have been made by its subscription of the Placing Shares are no longer accurate, it shall promptly notify Numis and the Company. The Placee agrees to indemnify on an after-tax basis and hold harmless on demand each of the Company and Numis and each of their respective affiliates and any person acting on its or their behalf 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 this document;

9.1.29 where it or any person acting on behalf of it is dealing with Numis, any money held in an account with Numis on behalf of it and/or any person acting on behalf of it will not be treated as client money within the meaning of the relevant rules and regulations of the Financial Conduct Authority which therefore will not require Numis to segregate such money, as that money will be held by Numis under a banking relationship and not as trustee;

9.1.30 any of its clients, whether or not identified to Numis, will remain its sole responsibility and will not become clients of Numis for the purposes of the rules of the Financial Conduct Authority or for the purposes of any other statutory or regulatory provision;

9.1.31 it accepts that the allocation of Placing Shares shall be determined by the Company in its absolute discretion but in consultation with Numis and that the Company may scale down any Placing commitments for this purpose on such basis as it may determine; and

9.1.32 time shall be of the essence as regards its obligations to settle payment for the Placing Shares and to comply with its other obligations under the Placing.

The representations, warranties, acknowledgements and undertakings contained in these terms and conditions are given to Numis and the Company and are irrevocable and shall not be capable of termination in any circumstances.

   10.          Supply and Disclosure of Information 

If Numis, the Registrar or the Company or any of their agents request any information about a Placee's agreement to subscribe for Placing Shares under the Placing, such Placee must promptly disclose it to them.

   11.          Miscellaneous 

The rights and remedies of Numis, the Administrator, the Registrar and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

On application, if a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All documents provided in connection with the Placing will be sent at the Placee's risk. They may be returned by post to such Placee at the address notified by such Placee.

Each Placee agrees to be bound by the Articles once the Placing Shares, which the Placee has agreed to subscribe for pursuant to the Placing and all disputes and claims arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims), have been acquired by the Placee. The contract to subscribe for Placing Shares under the Placing and the appointments and authorities mentioned in this prospectus will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of Numis, the Administrator, the Company and the Registrar, each Placee irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against the Placee in any other jurisdiction.

In the case of a joint agreement to subscribe for Placing Shares under the Placing, references to a "Placee" in these terms and conditions are to each of the Placees who are a party to that joint agreement and their liability is joint and several.

All times and dates in this document may be subject to amendment.

Numis and the Company expressly reserve the right to modify the Placing (including, without limitation, the timetable and settlement) at any time before allocations are determined.

This information is provided by RNS

The company news service from the London Stock Exchange

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