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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Woburn Energy | LSE:WBN | London | Ordinary Share | GB00B1YW2916 | 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% | 1.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMWBN
RNS Number : 6330E
Woburn Energy PLC
01 June 2012
For immediate release
1 June 2012
Woburn Energy Plc
("Woburn" or the "Company")
Proposed Disposal of the Company's Colombian beneficial interests
1. Introduction
The Board of Woburn is delighted to announce that the Company's 51 per cent. owned subsidiary, LQRC, has today entered into a conditional Assignment Agreement for the sale of its 50 per cent. beneficial interest in the Las Quinchas Association Contract with Ecopetrol, the sole remaining asset of LQRC. The proposed completion of the sale by LQRC is conditional on approval by Ecopetrol and the approval of Shareholders at a general meeting of the Company (the "Disposal"). Following Completion, Woburn will have no assets other than its share of the net proceeds of the Disposal, which are expected to amount to approximately US$4.5 million after settlement by LQRC and Woburn of all outstanding liabilities owed both to the Las Quinchas Association Contract operator, Pacific Rubiales, and the LQRC minority shareholder, PetroMagdalena, together with the costs and expenses of the Disposal.
The Disposal will constitute a fundamental change of business of the Company under Rule 15 of the AIM Rules, which requires the approval of the Shareholders. The Disposal will result in the Company becoming an Investing Company, as a consequence of which Rule 15 of the AIM Rules further requires the Company to obtain the approval of its Shareholders for its proposed Investing Policy going forward.
Following approval of the Disposal by Shareholders, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of the General Meeting, failing which, the Company's Ordinary Shares would then be suspended from trading on AIM. If the Company's Investing Policy has not been implemented within 18 months of the General Meeting the admission to trading on AIM of the Ordinary Shares would be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.
2. Background to the Disposal
In June last year, Woburn announced that it was seeking a buyer for its Colombian beneficial interests, which are owned by its 51 per cent. owned subsidiary, LQRC, which has a 50 per cent. non-operated beneficial interest in Las Quinchas Association Contract in Colombia. The disposal process has been managed by the Company's partner in LQRC and Colombia, PetroMagdalena, which first acquired an interest in LQRC in 2008. The operator of Las Quinchas Association Contract is Pacific Rubiales.
The Directors have been seeking to find a buyer for the Company's Colombian beneficial interests for some considerable time and they believe that the Disposal provides an attractive opportunity for the Company to realise its entire investment in its remaining Colombian oil and gas beneficialinterests for cash and settle outstanding liabilities. The cash proceeds of the Disposal will enable LQRC and Woburn to settle all outstanding liabilities owed both to the Las Quinchas Association Contract operator, Pacific Rubiales, and the LQRC minority shareholder, PetroMagdalena.
Woburn's share of the net Disposal proceeds is estimated to amount to approximately US$4.5 million after expenses.
3. Summary of the Assignment Agreement
The Disposal has been structured as an assignment of the beneficial interests of LQRC in the Las Quinchas Association Contract. The Assignment Agreement is conditional on approval by Ecopetrol and Woburn Shareholder approval. The Assignment Agreement values 100 per cent. of Las Quinchas at US$35 million, of which US$34 million has been apportioned in aggregate to the Arce and Acacia Este fields in which LQRC has a 50 per cent beneficial interest, and the balance to the Baul well (in which LQRC did not participate). The total cash consideration to be received by LQRC from the Purchaser amounts to US$16 million.
Under the terms of the Assignment Agreement, the Consideration will be paid to LQRC in ten instalments, of which the first instalment of US$1,777,778 has been paid as a deposit (from which LQRC made a first payment of US$730,000 to PSE in respect of unpaid billings), as summarised in Column A in Table 1 below. The payment date for each instalment is determined by the date on which the relevant Colombian authority, in this case Ecopetrol, approves the assignment of LQRC's beneficialinterest in the Las Quinchas Association Contract to the Purchaser or, if earlier, the date which is three (3) months following the sixtieth (60th) day after formal submission to the Colombian authority requesting assignment of the Las Quinchas Association Contract to the Purchaser.
LQRC has also entered into a private payment and settlement agreement with PSE pursuant to which PSE has agreed to advance to LQRC a proportion of the instalments that PSE will receive from the Purchaser which will be repaid to PSE out of the proceeds of the fifth, sixth, seventh, eighth, ninth and tenth instalments. LQRC has in return agreed to settle the outstanding billings due to PSE as operator of the Las Quinchas Association Contract, which currently amounts to US$4.4 million (of which US$2.15 million is to be paid to PetroMagdalena, which has settled this amount with PSE on behalf of LQRC). LQRC has further agreed pursuant to the Settlement Agreement that it will pay interest to PSE (at an annual rate of 7.5 per cent.) on any outstanding billings and advances from PSE, and that the balance of any interest will be paid immediately following payment of the Fifth Instalment. The obligations of PSE to make such advances to LQRC, and the obligations of LQRC to repay any such advances and agreed billings, is conditional on the Purchaser paying the instalments that are due to both LQRC and PSE pursuant to their respective assignment agreements with the Purchaser.
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Table 1: Payments due to LQRC
Column
A: Column
Gross B:
Instalment Instalment payment date proceeds Net proceeds
US$ US$
------------ ----------------------------- ------------------- ------------------------
First Paid 1,777,778 2,150,000
Within 3 months of the
Second Assignment Date 2,666,667 255,147
Within 6 months of the
Third Assignment Date 2,666,667 6,899,600
Within 9 months of the
Fourth Assignment Date 2,666,667 773,210
Within 12 months of the
Fifth Assignment Date 2,666,667 -
Within 3 months of payment
Sixth of the Fifth Instalment 888,889 -
Within 6 months of payment
Eighth of the Fifth Instalment 888,889 -
Within 9 months of payment
Ninth of the Fifth Instalment 888,889 -
Within 12 months of payment
Tenth of the Fifth Instalment 888,889 -
16,000,000 10,077,957
The net proceeds therefore which the Board expects LQRC to receive, after adjustment for advances received from, and thereafter repayable to, PSE, together with settlement of billings and interest payments owed to PSE, amount in aggregate to US$10.1 million, and are set out in Column B of Table 1 above, of which Woburn's net share in respect of its 51 per cent. interest in LQRC amounts to US$5.14 million. Woburn has also settled outstanding administrative and management charges owed by LQRC to PetroMagdalena, which amounts in aggregate to approximately US$0.257 million. The Board expects that LQRC will receive the second, third and fourth Instalments (as set out in Column B of Table 1 above) on or before the end of November 2012, February 2013 and May 2013 respectively.
Accordingly, after settlement of these liabilities and the cost of the transaction, the Board estimates that Woburn's net receipts in respect of its 51 per cent. interest in LQRC will amount to US$4.5 million (including net receipts under the First Instalment).
4. The Company's operations following the Disposal
The Company will be an investing company under the AIM Rules following completion of the Disposal. The Company will have no assets other than the proceeds of the Disposal.
Following the settlement of all outstanding management fees and other administrative costs owed by Woburn to PetroMagdalena, Woburn's expenses and costs of the Disposal and repayment in full of the Cetus Loan, Woburn's share of the net proceeds of the Disposal are estimated to amount to approximately US$3.4 million which will provide the Company with significant cash resources to pursue new investment opportunities in accordance with the Investing Policy and to provide working capital for the day-to-day business of the Company.
The Board will review and assess potential new investments in accordance with the Investing Policy.
5. Proposed Investing Policy
The Company's proposed Investing Policy, which is subject to shareholder approval, is set out below:
Investing Policy
The Company intends to make investments in the oil and gas sector.
The Directors intend initially to focus on Europe, the Middle East, Africa and Asia where the Directors believe that a number of opportunities exist to acquire interests in suitable projects, although other regions may be considered. Investments may be made in exploration, development or producing assets.
The Directors may consider it appropriate to take an equity interest in any proposed investment which may range from a minority position to 100 per cent. ownership. Proposed investments may be made in either quoted or unquoted companies and structured as a direct acquisition, joint venture or as a direct interest in a project.
The Company intends to be an involved and an active investor. Accordingly, where necessary, the Company may seek participation in the management or with the board of directors of an entity in which the Company invests or in the event that it is acquired then in the on-going enlarged entity.
New investments will be held for the medium to longer term, although shorter term disposal of any investments cannot be ruled out.
There will be no limit on the number of projects into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules. Where the Company builds a portfolio of related assets it is possible that there may be cross-holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate.
Investments may be made in all types of assets and there will be no investment restrictions.
The Company's primary objective is that of securing for the Shareholders, the best possible value consistent with achieving, over time, both capital growth and income for Shareholders through developing profitability coupled with dividend payments on a sustainable basis.
Following on from adopting an Investing Policy, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of the General Meeting, failing which the Ordinary Shares would then be suspended from trading on AIM. If the Investing Policy has not been implemented within 18 months of the General Meeting the admission to trading on AIM of the Ordinary Shares would be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.
The Directors believe that their broad collective experience in the areas of natural resources, acquisitions, accounting, corporate and financial management together with the opinion of consultant experts in the evaluation and exploitation of natural resources projects, which will assist them in the identification and evaluation of suitable opportunities, will enable the Company to achieve its objectives. Internationally recognised competent persons will be commissioned to prepare reports on the projects being considered by the Company, where the Directors consider it necessary. The Directors may undertake the initial project assessments themselves with additional independent technical advice as required. The Company will not have a separate investment manager.
6. Circular to shareholders
The Company is sending a circular to shareholders, which provides details on the proposed Disposal and notice of a general meeting to be held on 21 June 2012 at 10.00am.
For further information, please contact:
Woburn Energy Plc Tel: +44 (0) 20
7380 4600
Kamran Ahmed www.woburnenergy.com
Graeme Thomson
Beaumont Cornish Limited (Nominated Tel: +44 (0)20
Adviser) 7628 3396
Michael Cornish
DEFINITIONS
The following definitions apply throughout this announcement unless the context requires otherwise:
"$" or "US$" or "USD" the lawful currency of the United
States;
"Act" the Companies Act 1985 and the
Companies Act 2006 as amended,
including all secondary legislation
made under the Act;
"AIM" AIM, a market operated by the
London Stock Exchange;
"AIM Rules" the rules of the London Stock
Exchange governing admission
to, and operation of, AIM and
comprising the AIM Rules for
Companies and the AIM Rules for
Nominated Advisers;
"Alange Alberta" Alange Alberta Incorporated,
a wholly-owned subsidiary of
PetroMagdalena;
"Assignment Agreement" the conditional assignment agreement
executed 31 May 2012 and entered
into between LQRC and the Purchaser;
"Assignment Date" the date on which the relevant
Colombian authority, in this
case Ecopetrol, approves the
assignment of LQRC's beneficial
interest in the Las Quinchas
Association Contract to the Purchaser
or, if earlier, the date which
is three (3) months following
the sixtieth (60th) day after
formal submission to the Colombian
authority requesting assignment
of the Las Quinchas Association
Contract to the Purchaser;
"Cetus Investment" Cetus Investment Resources Incorporated,
a company incorporated under
the laws of the British Virgin
Islands whose registered office
is located at Morgan & Morgan
Building, Pasea Estate, Road
Town, Tortola, British Virgin
Islands. Cetus Investment is
a wholly owned subsidiary of
Zaver Petroleum International
Incorporated, which itself is
a wholly owned subsidiary of
United Paramount Holding Corporation.
Mr Hashwani, a director of the
Company, is beneficially interested
in the entire issued share capital
of United Paramount Holding Corporation
and is therefore the ultimate
controlling party of the Company;
"Cetus Loan" The GBP650,000 unsecured, non-interest
bearing loan provided by Cetus
to the Company, which is repayable
on demand;
"Company" or "Woburn" Woburn Energy PLC, a company
incorporated and registered in
England and Wales with registered
number 04128401, whose registered
office is at 16 Upper Woburn
Place, London, WC1H 0AF;
"Completion" completion of the Assignment
Agreement in accordance with
its terms;
"Directors" or the the directors of the Company;
"Board"
"Disposal" the conditional sale by LQRC
of its 50 per cent. beneficial
interest in the Las Quinchas
Association Contract pursuant
to the Assignment Agreement;
"Fifth Instalment The payment by the Purchaser
to LQRC pursuant to the Assignment
Agreement to be made within 12
months of the Assignment Date;
"Investing Company" has the meaning given in the
glossary to the AIM Rules;
"Investing Policy" the proposed investing policy
of the Company, to be pursued
by the Company following Completion;
"Las Quinchas Association the association contract between
Contract" Empresa Colombiana De Petroleos
(Ecopetrol) and Clavijo Avila
Geopozos & Company S.A. dated
29 January 1996 (as amended);
"LQRC" Las Quinchas Resource Corporation,
a company incorporated under
the laws of Barbados (West Indies)
with registered number 16000063
whose registered office is located
at c/o Oceanic Managers (Barbados)
Incorporated, Braemar Court,
Deighton Road, St. Michael, BB14017,
Barbados;
"LQRC Branch" the branch office of LQRC situated
in Colombia
"Ordinary Shares" the existing ordinary shares
of in the capital of the Company,
each of 1.0 pence;
"Pacific Rubiales" Pacific Rubiales Energy Corp,
incorporated under the laws of
the Province of British Columbia,
whose records office is located
at Suite 650 - 1188 West Georgia
Street, Vancouver, British Columbia
V6E 4A2;
"Pacific Stratus" Pacific Stratus Energy Colombia
Corp, a company organised under
the laws of Panama, with a branch
established in Colombia, a wholly-owned
subsidiary of Pacific Rubiales;
"PetroMagdalena" PetroMagdalena Energy Corporation
(formerly Alange Energy Corporation),
incorporated under the laws of
the Province of British Columbia,
whose records office is located
at Suite 650 - 1188 West Georgia
Street, Vancouver, British Columbia
V6E 4A2;
"Purchaser" the purchaser of the beneficial
interests of LQRC under the Las
Quinchas Association Contract
pursuant to the Assignment Agreement,
being Cloister Blue Corporation,
a company organised and existing
under the laws of the British
Virgin Islands with registered
number 1054513;
"Settlement Agreement" the Private Payment and Settlement
Agreement between: (1) Pacific
Stratus; and (2) LQRC, executed
31 May 2012;
"Shareholders" holders of Ordinary Shares in
the Company;
"Sterling" or "GBP" the lawful currency of the UK;
"Takeover Code" the City Code on Takeovers and
Mergers;
"UK" or the "United the United Kingdom of Great Britain
Kingdom" and Northern Ireland;
"United Paramount the parent company of Zaver Petroleum,
Holding Corporation" which is the parent company of
Cetus Investment;
"Zaver Petroleum" Zaver Petroleum International
Incorporated, a company incorporated
in the British Virgin Islands
whose registered office is located
at Morgan & Morgan Building,
Pasea Estate Road Town, Tortola,
British Virgin Islands."
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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