Publication of Admission Doc

RNS Number:3802J
Bullion Resources PLC
07 March 2005


Embargoed for release at 07:00a.m.                                7 March 2005

                             Bullion Resources plc

                          ("Bullion" or the "Company")

             Acquisition of Nautical Holdings Limited ("Nautical")

     Approval of Waiver to be granted by the Panel on Takeovers and Mergers

                 Admission to the Alternative Investment Market

                    Change of Name to Nautical Petroleum plc

Summary


Bullion Resources plc today announces that the Company proposes to acquire
Nautical Holdings Limited, a specialist energy company focussed on production of
heavy crude oils from discovered reserves in the United Kingdom Continental
Shelf ("UKCS"). The acquisition of the entire share capital of Nautical Holdings
Limited will be effected by the issue to the Vendors of 697,500,000
Consideration Shares, for a value in the transaction of #20.93 million.


The Acquisition constitutes a reverse takeover for the purposes of the AIM
Rules. The Company intends to seek admission of the Enlarged Share Capital to
trading on AIM following completion of the Acquisition.


To align the name of the Company with the business to be acquired it is proposed
that the name of the Company be changed to Nautical Petroleum plc.


An Extraordinary General Meeting of the Company is to be held at 4.00 p.m. on 30
March 2005 at the offices of Stringer Saul, Fifth Floor, 17 Hanover Square,
London, W1S 1HU, to approve the Acquisition and other related resolutions
outlined in the AIM admission document, copies of which were sent to
shareholders today.


Insinger de Beaufort is the Nominated Adviser and Broker to the Company.


Background


The Directors of Bullion believe that the oil and gas upstream (exploration and
production) sector of the energy industry offers promising growth potential for
shareholders. The Directors of Bullion have been pursuing opportunities to
acquire interests in the resources sector, with payment to be effected by the
issue of shares.



Nautical Holdings Limited is a subsidiary of Masefield Energy Holdings AG ("
MEHAG") which itself was created in 2004 to hold the non-trading, asset based
business interests of the Masefield Group.



Nautical Holdings Limited has a 75% shareholding in Nautical Petroleum AG, which
has a 100% interest in two licences on the United Kingdom Continental Shelf ("
UKCS") namely:



  * Licence P1077 over Block 9/2b and
  * Licence P1203 over Block 3/27a



Licence P1077 was awarded to Nautical Petroleum AG by the Department of Trade
and Industry on 1 October 2003 and Licence P1203 was offered to Nautical
Petroleum AG on 17 October 2004 and it received the licence for signature on 9
February 2005. Licence P1077 contains the 9/2-1A oil discovery and is contiguous
with Licence P1203.



In block 9/2b and surrounding area Nautical has purchased and interpreted 772 km
of 2-D seismic data; purchased 192 square km of 3-D seismic data; purchased and
interpreted the digital well data for 9/2-1A and completed an extensive assay of
a sample of oil from well 9/2-1A. The programme to date confirms that there is
an oil column of at least 33 metres. The area has the potential for a large
structural closure up to 18 km long and 5 km wide which could contain up to 490
mmbo. Immediate plans are to reprocess the 3-D seismic before a detailed
interpretation is carried out.



Licence P1203 (Block 3/27a) is contiguous to the north with Block 9/2b. 476 km
of 2-D seismic and the data on wells within and in the vicinity of the block
were purchased by Nautical Petroleum AG. The interpretation of these data
generated several leads on the block. The Licence P1203 was secured with a small
work programme which includes the reprocessing of some of the existing seismic.



The third asset currently held is specialised process equipment specifically
designed for the Mariner discovery extended well test (EWT). The equipment is
suitable for use in testing of heavy oils down to 10degrees gravity and will be
used on the testing of 9/2b discovery and on any other Nautical development
programme.



The primary goal of Nautical is to acquire, develop and add value to further
heavy oil reserves initially in the UKCS. Nautical intends to take full
advantage of the current business environment namely the rationalisation of the
UKCS assets resulting from industry consolidation, and limitation on major oil
company resources, along with the existence of significant identified
discoveries, which have been appraised but remain undeveloped.


Expected Timetable


Latest time and date for submission of forms of proxy 4.00 p.m. on 28 March 2005

EGM                                                   4.00 p.m. on 30 March 2005

Expected date for Admission                                         1 April 2005


Commenting on the transaction, Ian Williams, proposed Chairman said:


"This transaction provides an exciting opportunity to create shareholder value
by leading a new phase in the development of known heavy oil reserves in the
North Sea.  Nautical plans to apply advanced oil recovery technology to exploit
secured reserves, and to use the anticipated cash flow to develop further
reserves and acquire more assets.


"There is growing interest and support within industry and government for
additional crude oil production in the UKCS.  The Nautical strategy is well
aligned with these trends. The management team is confident of developing the
Company into a significant specialised player in the North Sea energy arena."


Nautical                                           020 7550 4890
Ian Williams, Proposed Chairman
Stephen Jenkins, Proposed Chief Executive

Insinger de Beaufort                               020 7190 7000
Simon Fox
Louis Castro

Buchanan Communication                             020 7466 5000
Tim Thompson
Ben Willey
Eleanor Williamson


Introduction


On 15 February 2005, trading in the Existing Ordinary Shares was temporarily
suspended pending publication of a circular to shareholders. Your Board
announced today that the Company proposes to acquire Nautical Holdings Limited,
a specialist energy company focused on acquiring and producing on heavy crude
oils from discovered reserves in the United Kingdom Continental Shelf.  The
consideration for the Acquisition is #20,925,000, to be settled by the issue of
697,500,000 New Ordinary Shares credited as fully paid at 3p per share to the
Vendors.


The Acquisition constitutes a reverse takeover for the purposes of the AIM
Rules.  The Acquisition will require a waiver to be granted by the Panel on
Takeovers and Mergers of the requirement for the Concert Party to make a general
offer under Rule 9 of the City Code to all shareholders of Bullion.  The Company
intends to seek admission of the Enlarged Share Capital to trading on AIM
following completion of the Acquisition.  To align the name of the Company with
the business to be acquired it is proposed that the name of the Company be
changed to Nautical Petroleum plc.


Following completion of the Acquisition, the aggregate shareholding in the
Company of the Vendors (the Concert Party for City Code purposes) will amount to
697,500,000 ordinary shares representing 90 per cent. of the Enlarged Share
Capital.


Background to Bullion Resources plc


In October 2004, the Company, by selling its operating business underwent a
restructuring to facilitate a transaction as a cash shell.  As part of the
restructuring, the Company raised #625,000 through a non brokered placing.
Prior to and since that time, the Board has looked at opportunities for using
the Company's quotation and funds.  Several parties were contacted and the
merits of a number of outline proposals were evaluated.  On balance, the
Directors decided that the acquisition of Nautical Holdings Limited was the most
compelling in that it provides an opportunity to enhance shareholder value.


Background to and reasons for the acquisition of Nautical


Bullion has limited resources.  The Directors wish to improve the fortunes of
the Company and believe that the oil and gas upstream (exploration and
production) sector of the energy business offers promising growth potential for
shareholders.  The Directors have been pursuing opportunities to acquire
interests in the resources sector, with payment being largely funded by issuing
shares.  The Board believes that the Acquisition will help to revitalise the
Company's prospects.  The Acquisition will bring the following features:


  * Nautical's licences and equipment.  These assets have been evaluated by
    Landmark EAME Limited (a subsidiary of Halliburton).  Their estimate of the
    reserves for UKCS licence block 9/2b is 51 mmbo, with risked upside
    potential in block 9/2b of 395 mmbo in place.

  * Nautical's management team.  This gives the Company access to an in-house
    team of technical and commercial experts who are experienced in the oil and
    gas business, having built up the Nautical asset base since its inception in
    2003.  The Proposed Directors are Ian Williams, Stephen Jenkins, Hemant
    Thanawala, Paul Jennings, Patrick Kennedy and Philip Dimmock who have
    extensive experience in the necessary disciplines to successfully exploit
    the Enlarged Group's present and future asset base, summary details of whom
    are included under the heading "Board of Directors".

  * Nautical's management team has extensive networks in the oil and gas
    industry and in conjunction with the Masefield Group can access
    opportunities especially on a one-on-one basis, to secure favourable terms.

  * Nautical's sister companies in the Masefield Group can provide downstream
    (marketing) offtake agreements for produced heavy crude oil, thus mitigating
    market risk.  They also have access to proprietary process technology,
    through an alliance with Akzo Nobel Surface Chemistry, which converts heavy
    crude oil residues to fuel for power generation.  They are developing
    business opportunities with major EU power generators for term fuel supply
    contracts.


Business of Nautical


Nautical Holdings Limited is a subsidiary of Masefield Energy Holdings, which
itself was created in 2004 to hold all the non-trading, asset based business
interests of the Masefield Group.  The energy trading company within the
Masefield Group is Masefield AG.


The core business of Masefield AG is global trading of crude oil and refined oil
products.  Since inception in 1990, Masefield AG has expanded this business and
established worldwide representation in major oil trading hubs with
international activity serving a clientele which includes most of the recognised
participants in the global crude oil, gas and refined products markets.
Masefield AG undertakes physical oil trades with private and state sector oil
producers, oil majors, independent traders, refiners, power generators and other
consumers.  Masefield AG has expert capability in risk management and the
application of associated techniques in complex energy transactions involving
inter alia, the full range of derivative and forward markets instruments.  It
also, more recently, recruited in-house upstream specialists and has extended
external access to expertise in oil and gas resource evaluation, exploration,
extraction and the underlying technologies.



Positioned in the energy value chain, Masefield Group is able to identify and
secure assets and interests which benefit from synergies with energy trading
while offering intrinsic viability and competitive advantage through application
of the oil process technology.



The upstream focus of the Masefield Energy Holdings business strategy identified
acquisition of discovered heavy oil reserves in the North Sea as a prime supply
source for the downstream processed fuel business.  An active programme resulted
in the acquisition of two licences.  Masefield Energy Holdings was also able to
acquire ownership of specialised heavy crude oil production processing equipment
designed and supplied by Halliburton for the Extended Well Test programme
undertaken successfully on the Mariner oil field by Chevron Texaco in 1997.



All asset based interests acquired in this programme were transferred into
Masefield Energy Holdings during 2004.  Subsequently a 75 per cent. interest in
Nautical Petroleum AG, the owner of licences 9/2b and 3/27a, was transferred
into Nautical Holdings Limited in August 2004, together with full ownership of
the specialised oil production process equipment.



Assets Licences



Nautical Holdings Limited has a 75 per cent. shareholding in Nautical Petroleum
AG, which has a 100 per cent. interest in two licences in the United Kingdom
Continental Shelf, namely Licence P1077 over block 9/2b and Licence P1203 over
block 3/27a.  Licence P1077 was awarded to Nautical Petroleum AG by the
Department of Trade and Industry (DTI) on 1 October 2003 and Licence P1203 was
offered to Nautical Petroleum AG on 17 October 2004 and it received the licence
for signature on 9 February 2005.



Licence P1077 contains the 9/2-1A oil discovery and is contiguous with Licence
P1203, both located on the East Shetland Platform in the vicinity of the
well-documented Bressay and 9/3 heavy oil discoveries.



In block 9/2b and surrounding areas Nautical has purchased and interpreted 772
km of 2-D seismic data, purchased 192 square km of 3-D seismic data, purchased
and interpreted the digital well data for 9/2-1A and completed an extensive
assay of a sample of oil from well 9/2-1A.



The programme to date confirms that there is an oil column of at least 33 metres
(the base was not encountered in the well and is probably located down dip) in
the Heimdal Sandstone Member of the Lista Formation (which is Palaeocene,
Tertiary in age).  This member consists of a major sandstone unit (15 metres
thick) with 2 shallower, thinner units (3 metres and 1 metre thick).  Only the
thickest unit was tested and this flowed 15 API oil on a drill stem test (DST)
(confirmed by assay).



The area has the potential for a large structural closure up to 18 km long and 5
km wide which could contain up to 490 mmbo, as evidenced by the Equipoise 2D
seismic interpretation and published literature.



Immediate plans are to reprocess the 3-D seismic to better image the reservoir
before a detailed interpretation is carried out.  The aim will be to confirm the
large structural closure and define the distribution and architecture of the
reservoir.  The volumes in place will be refined and optimal well location
identified, leading to an appraisal / development well being drilled in the
second half of 2006.  It is expected that this will initially be a vertical well
which will be converted into a horizontal well which will be tested and retained
as a future producer.



Licence P1203 (Block 3/27a) is contiguous to the north with Block 9/2b. 476 km
of 2-D seismic and the data on wells within and in the vicinity of the block
were purchased by Nautical Petroleum AG.  The interpretation of these data
generated several leads at the Heimdal Sandstone Member level and one
significant lead at the Upper Jurassic Humber Group in the north east corner of
the block.



Encouragingly, one of the Heimdal Sandstone Member leads is analogous to the 9/
2b-1A discovery and reservoir thickness at this location should be thicker than
at 9/2b-1A since the Heimdal Sandstone thickens to the north as evidenced in
wells 3/27-2 and 3/22-2.   Hydrocarbons have migrated into the block since oil
shows were recorded in the Heimdal Sandstone in well 3/27-2 in the north west of
the block.



Deeper in the geological section at the Jurassic, Humber Group the seismic shows
a potential pinch out of the reservoir.  There are seismic anomalies at this
location, which may indicate evidence of gas (gas chimneys) which can be an
indicator of liquid hydrocarbons deeper in the geological section.



The Licence P1203 was secured with a small work programme which includes the
reprocessing of some of the existing seismic.



It is the New Board's intention that the seismic be re-interpreted in 2005 to
firm up the various leads and the New Board intends to farm out an equity share
in the block prior to drilling any well (which will be in 2007 at the earliest).



The third asset currently held is specialised process equipment specifically
designed for the Mariner discovery extended well test (EWT).  The equipment is
suitable for use in testing of heavy oils down to 10degrees gravity and will be
used on the testing of 9/2b discovery and on any other Nautical development
programmes.  When not being used by Nautical, the equipment will be hired to
third parties for well testing in order to generate revenue.  The equipment is
easily deployed since the 12 skids can be transported in 6 x 40 feet containers
and it is fully compatible with most semi submersible drilling rigs.



Minimal refurbishment is required which will reduce lead time in a deployment to
a few months (a new build normally has a lead time of up to 12 months).  The
equipment can handle up to 40,000 barrels per day of liquid production of which
25,000 barrels per day can be oil.  The resultant export stream has 0.5 per
cent. BS & W.



Ownership and control of this equipment affords Nautical commercial leverage and
competitive advantage as having the means to more rapidly appraise and develop
heavy oil accumulations and to minimise plant supply lead times allows fast
track development programmes with considerable cost savings.



The primary goal of Nautical is to acquire, develop and add value to further
heavy oil reserves initially in the United Kingdom Continental Shelf.  Nautical
intends to take full advantage of the current business environment namely the
rationalisation of United Kingdom Continental Shelf assets resulting from
industry consolidation and limitation on major oil company resources, along with
the existence of significant identified discoveries which have been appraised
but remain undeveloped.  In addition, in the opinion of the New Board, these
reserves tend to be undervalued relative to lighter Brent type crude oils.



The New Board believes that, although the development of heavy oil reserves is
economic at prices significantly less than those currently prevailing, they are
not material to larger companies but offer excellent opportunities to smaller
more focused companies like Nautical.  The New Board plans to adopt a phased
approach to oil field production development based on repeating success on a
modular basis requiring minimal fixed infrastructure.  This approach should lead
to mitigation of development risk and the reduction in fiscal exposure before a
revenue stream is generated by crude oil production and sales.



Strategy



The New Board's key strategic objectives for the Enlarged Group are:

*         initially to become a production operator and develop the 9/2b
discovery generating cash flow and increasing proven reserves within the next 2
years.  The application of heavy oil production technology has proven the
viability of producing heavy oil at commercially attractive rates in the nearby
Mariner Field.  As reservoir characteristics (such as oil quality and reservoir
geology) in both the Mariner Field and the Block 9/2b discovery are broadly
similar, the Directors and Proposed Directors believe that it is reasonable to
expect that the 9/2b discovery can be successfully developed by the application
of the technology proven at the Mariner discovery;

*         concurrently to acquire targeted reserves from third parties while
participating in future licence rounds to acquire discovered oil and exploration
acreage with modest work commitments. This reserve acquisition programme will be
achieved by issuing ordinary shares, using its available financial resources and
bank or other funding as appropriate, as well as by the drilling of development,
appraisal and exploration wells;

*         to continue to enhance liquidity in its ordinary shares through these
acquisitions whilst offering the prospect of capital growth rather than dividend
yield; and

*         to develop Bullion into a well regarded oil production company, with a
clear focus on a defined class of assets in geographic areas where the
management can add value.



Current Trading and Prospects



The Company has no current business.  In the year to 31 December 2003 Bullion
made a loss before tax of #1.94 million, which substantially reflects various
non-recurring costs relating to the disposal of the operating subsidiaries and
the subsequent re-financings.



In the four months ended 31 October 2004 Nautical recorded a loss before tax of
#2,000.  The Proposed Directors consider that substantial opportunities exist
for development and reserve acquisition and that the completion of the
Acquisition will provide Nautical with the resources and profile needed to
pursue these opportunities.



Change of Name



The Board has decided that as part of the Acquisition the name of the Company
should be changed to Nautical Petroleum plc so as to align its name to its new
business.  Therefore a resolution to this effect is to be proposed at the EGM.



Board of Directors



The Board of Directors of the Company is currently Malcolm Burne, Johan Meiring,
Colin Bird and Patrick Kennedy.  Assuming all the resolutions are duly passed at
the EGM, Malcolm Burne, Johan Meiring and Colin Bird propose to resign as
Directors at the close of business at the EGM and Patrick Kennedy will remain on
the Board as a Non Executive Director.



Following Admission Patrick Kennedy will be joined on the Board by the following
Proposed Directors:



Ian Williams



Proposed Chairman (aged 58) joined the Masefield Group in 1999 as a member of
the Group Executive committee, with responsibility for the development and
management of business ventures.  In this capacity he has led the strategy to
secure the portfolio of assets and interests and the formation of Masefield
Energy Holdings.



Ian spent over 27 years with the Royal Dutch/Shell Group in various capacities,
including as Managing Director and Deputy Chairman of Shell South Africa, Vice
President-(Downstream) of Shell Philippines and most recently as Head of
Strategy & Consultancy-(Downstream) at Shell International Petroleum Company in
London.  In senior management roles he was accountable for growth through
development and acquisition in large companies typically involving project
generation, investment evaluation and deal structuring with annual capital
budgets in the range of US$200 million plus.  Ian was closely associated with
the application of contemporary change management and was involved with the mid
90's review of the Shell Group structure.  Ian left the Shell Group in 1996.



Ian Williams has also been actively involved in related industry and business
associations.  He was the first Chairman of the Board of Governors of the
Private Sector Foundation in Namibia and during the early 90's was a committee
member of the Consultative Business Movement associated with the promotion of
negotiated political transition in South Africa.



Stephen Jenkins



Proposed Chief Executive Officer (aged 46) joined the Masefield Group in 2003
and is responsible for all up stream technical management.  He played a leading
role in securing the successful award of licence P1077 to Nautical Petroleum AG.



Stephen has over 20 years' technical and management experience in exploration
and production world-wide with a range of oil and gas companies.  Prior to
joining Masefield, he spent 11 years at Nimir Petroleum where, as Business
Development and HSE Manager, he was responsible for the development and
evaluation of acquisition strategy and all technical dimensions of the company's
strategic planning.  He successfully led multidisciplinary teams to evaluate
opportunities in North and South America, the Middle East, North Africa, and
other OECD countries.  This led to the acquisition, for nominal consideration,
and the subsequent turnaround of a Venezuelan oil producing field.



Stephen managed a drilling programme in Yemen, Russia and Tunisia/Libya which
included the quadrupling of production in a field on Sakhalin Island, Russian
Federation.  He also identified and secured a farm out with a major oil company
for a substantial carry on a large oil field in Kazakhstan.



Stephen has an MSc in Petroleum Geology and DIC from Imperial College of Science
and Technology University of London, a BSc Hons in Geology from Queens
University Belfast and is a Fellow of Geological Society of London.



Hemant Thanawala



Proposed Finance Director (aged 47) joined the Masefield Group in 2001 as its
Chief Financial Officer and is a member of the Masefield Group Executive
Committee.  He is a Chartered Accountant by qualification with over 25 years'
professional and commercial experience.



Prior to joining the Masefield Group, he served as the Chief Financial Officer
of Premier Telesports Group for three years.  The group was involved in the
entertainment sector in parts of Eastern Europe and the former Soviet Union.  He
played a key role in all material corporate finance matters including the
raising of equity finance through two private placings and listing the group on
the Vienna Stock Exchange, negotiating all material contracts and licences,
implementing rigid financial controls and reporting systems and setting up and
running the main operation base in Moscow.



Prior to joining Premier Telesports Group, he served as a finance director of
Rostel Group for 9 years, a diversified group involved in the manufacture and
distribution of consumer products either in joint ventures or through
collaboration with "blue chip" corporations such as Cadbury Schweppes Plc, Sara
Lee Corporation, Associated British Foods, Mars Corporation, Revlon, Imperial
Tobacco and Black and Decker.  He played a key role in the expansion of the
group's business in several emerging markets in Africa, Eastern Europe and the
former Soviet Union and was instrumental in the negotiation of the joint venture
with Cadbury Schweppes Plc which led to a single investment of over US$100
million in a "state-of-the-art" chocolate manufacturing facility near St.
Petersburg and associated distribution network.



Before joining Rostel Group, he was involved in professional practice in the UK,
qualifying with KPMG Thomson McLintock (now KPMG), specialising in audit, tax
and management consultancy.



Paul Jennings



Proposed Commercial Director (aged 47) joined Masefield in 2000 with
responsibility for exploration and production finance and business development.
He has over 25 years' experience in the oil and gas sector as an accountant,
economist and commercial and business development director.  Paul spent 17 years
with BP; initially working in the finance area and ultimately becoming a Lead
Petroleum Economist for BP Exploration Limited.  After leaving BP in 1992, he
spent seven years as an independent consultant, advising a number of key clients
including the Russian and Chinese governments.  In addition, during that period,
he was Commercial Director Russia for Bitech Petroleum with responsibility for
all related dealings with associates, authorities, and service providers for the
development of oil production under Russian field licences.



His key achievements include the successful acquisition and development of major
oil and gas assets in Russia and West Africa and accessing and developing
production licences in Russia. He has extensive experience of negotiating
exploration and development commercial terms, including tax and royalty issues,
at government and corporate levels.  In addition, he was a key member of the
British Petroleum plc team that identified the hydrocarbon potential of the
Angolan deep water oil province.  Since joining Masefield, Paul identified and
progressed the Quadrise Canada business opportunity which involves application
of the Akzo Nobel fuel processing technology in oil field steam generation.
This has added significant value to the Masefield asset portfolio.  He has also
played a leading role in the development of oil reserve acquisition
opportunities.



Philip Dimmock



Proposed Non-Executive Director (aged 58) has been an executive in the upstream
oil and gas business, both in the United Kingdom and internationally, for over
30 years.  He has directed the development of several oil and gas fields and has
managed mature fields, reducing costs and arresting production decline.
Throughout, he has been a champion for offshore safety.  A graduate of Pembroke
College, Oxford, a significant part of his career was with BP, where his key
positions included Manager Forties Field, Project Director Forties Pipeline
Expansion, Deputy Project Director Wytch Farm Development and Vice President
Production Alaska.  With Ranger Oil he was the Vice President of the
International Division, responsible for activities in the UK and in Africa.  He
led development projects, operations and exploration, achieving a three times
growth, both in production and reserves.  He was Chairman of Ranger Oil U.K. Ltd
and other subsidiary boards and an Executive Officer of the UK Offshore
Operators Association.  He has also recently spent time advising the Oil
Taxation Office of the Inland Revenue in London on restructuring the fiscal
regime for the oil industry.  Mr Dimmock has been a consultant manager building
the operational capability of Vanco Energy in the ultra-deepwater of a number of
African countries, where he is also responsible for government relations.



Patrick Kennedy



Patrick Kennedy (aged 51) is a Fellow of the Institute of Chartered Accountants
in England and Wales and is a member of its Faculty of Finance, having graduated
with honours in Economics and obtaining an MA in Economics. He is Chief
Executive Officer of PK Partners LLP, a firm of chartered accountants and
business advisors and has spent more then 20 years in financial services,
advising a cross section of quoted and private businesses in the UK and
overseas. Patrick is currently an Executive Director of Bullion and will,
following Admission, continue as a Non-Executive Director of the Company.



Further information relating to the Proposed Directors is contained in the
circular to shareholders.



Lock-In Agreements



Lock-in Deeds dated 7 March 2005 executed by Mr Kennedy and certain members of
the Concert Party ("Covenantors") under the terms of which each Covenantor has
undertaken, in respect of its current holding of ordinary shares, not to dispose
of such shares until one year from the date of Admission, save in accordance
with Rule 7 of the AIM Rules other than in acceptance of a takeover offer for
the whole of the issued share capital of the Company, the giving of an
irrevocable undertaking to accept an offer, the sale of shares to an offeror or
potential offeror, under an intervening court order or by personal
representatives of the Covenantor if he/she shall die during this period.  For a
further 12 months thereafter, the Covenantor will only dispose of ordinary
shares through the Company's broker from time to time.  In the event that they
or any related parties acquire ordinary shares in the future, each Covenantor
will not dispose of their ordinary shares until one year from the date of
Admission save in accordance with Rule 7 of the AIM Rules and for a further 12
months thereafter they or any related parties will only dispose of ordinary
shares through the Company's broker from time to time.



City Code



The Proposals give rise to certain considerations under the City Code.  Brief
details of the Panel, the City Code and the protections they afford are
described below.



The City Code has not, and does not seek to have, the force of law.  It has,
however, been acknowledged by both government and other regulatory authorities
that those who seek to take advantage of the facilities of the securities
markets in the United Kingdom should conduct themselves in matters relating to
takeovers in accordance with high business standards and, therefore, according
to the City Code.



The City Code is issued and administered by the Panel.  The City Code applies to
all takeover and merger transactions, however effected, where the offeree
company is, inter alia, a listed or unlisted public company resident in the
United Kingdom (and to certain categories of private limited companies).  The
Company is such a company and its shareholders are entitled to the protection
afforded by the City Code.



Under Rule 9 of the City Code, when a person or a group of persons acting in
concert acquires shares which, (when taken together with shares already held)
would result in such a person or persons holding shares carrying 30 per cent. or
more of the voting rights in a company which is subject to the City Code such
person or group is normally obliged to make a general offer to all other
shareholders to acquire the balance of the shares not held by him.  Similarly,
if any person or persons acting in concert already holds shares carrying more
than 30 per cent., but not more than 50 per cent. of the voting rights, and such
person, or any person acting in concert with him, acquires any additional shares
which increases their percentage of the voting rights, such person or group of
person is, in the same way, obliged to make a general offer to all shareholders.



An offer under Rule 9 should be in cash and at the highest price paid within the
preceding 12 months for any shares in the company by the person required to make
the offer or any person acting in concert with him.



Rule 9 also provides, inter alia, that where any person, together with persons
acting in concert with him holds more than 50 per cent. of a company's voting
rights, no obligations will normally arise from any acquisitions by such person
or any person acting in concert with him for any further shares carrying voting
rights in the Company.  However, the Panel may regard as giving rise to an
obligation to make an offer the acquisition by a single member of the concert
party of shares sufficient to increase his individual holding to 30 per cent. or
more, or if he already holds not less than 30 per cent. but more, or if he
already holds not less than 30 per cent. but not more than 50 per cent.



Persons acting in concert comprise persons who, pursuant to an agreement or
understanding (whether formal or informal), actively co-operate, through the
acquisition by any of them of shares in a company, to obtain or consolidated
control of that company.  The Panel has determined that the Concert Party should
be regarded as acting in concert for the purposes of Rule 9 of the City Code.



No member of the Concert Party currently holds any Existing Ordinary Shares.
Following the Proposals, the Concert Party will own 697,500,000 ordinary shares
in Bullion, representing 90 per cent. of the issued voting share capital of the
Company at that time.



The Panel has agreed, however, to waive any obligation of the Concert Party (or
any member of it) to make a general offer for shares in the Company that would,
on the basis referred to above, arise under Rule 9 of the City Code on
completion of the Acquisition, subject to approval by shareholders voting on a
poll.



Shareholders should be aware that, following the implementation of the Proposals
and issue of the Consideration Shares pursuant to the Acquisition Agreements,
the Concert Party will hold ordinary shares in Bullion carrying more than 50 per
cent. of the voting rights in the Company.  For so long as they continue to be
treated as acting in concert, the Concert Party may accordingly increase its
aggregate shareholding in the Company without incurring any further obligation
under Rule 9 of the City Code to make a general offer for the remaining ordinary
shares in Bullion, provided that no individual member of the Concert Party's
holding exceeds 30 per cent.



Shareholders should also be aware that, following the implementation of the
Proposals and issue of the Consideration Shares pursuant to the Acquisition
Agreement, Masefield Energy Holdings individually will hold new ordinary share
in Bullion carrying more than 50 per cent. of the voting rights in the Company.
Accordingly, Masefield Energy Holdings would, so long as its shareholding
remains over 50 per cent. be able to increase its shareholding in the Company
without incurring any further obligation under Rule 9 of the City Code to make a
general offer for the remaining ordinary shares.



Shareholders should also be aware that, although his controlling interest in
Masefield Energy Holdings, following the implementation of the Proposals and
issue of the Consideration Shares pursuant to the Acquisition Agreements, Mr. J.
Daley, a director of Masefield Energy Holdings, will control New Ordinary Shares
carrying more than 50 per cent. of the voting rights in the Company.
Accordingly, Mr. Daley would, so long as the New Ordinary Shares over which he
could exercise control remain over 50 per cent. be able to increase his
shareholding in the Company without incurring any further obligation under Rule
9 of the City Code to make a general offer for the remaining ordinary shares.



The City Code will, however, continue to apply to each other member of the
Concert Party separately and, accordingly, no individual member of the Concert
Party (other than Masefield Energy Holdings and Mr. Daley) individually may
increase its holding to 30 per cent. or more of the Enlarged Share Capital of
the Company from time to time or, if he already holds more than 30 per cent. but
less than 50 per cent., increase that shareholding without incurring an
obligation under Rule 9 of the City Code to make a general offer to
shareholders.



Further information on the Concert Party is contained in the circular to
shareholders.



Dividend Policy



The New Board intends to commence the payment of dividends when it becomes
commercially prudent to do so, subject to the availability of sufficient
distributable reserves and the need to retain funds to finance the requirements
of the Enlarged Group.



Thereafter it is the Company's intention to pursue a dividend policy which is
both prudent and progressive.



Extraordinary General Meeting



An Extraordinary General Meeting of the Company to be held at 4.00 p.m. on 30
March 2005 at the offices of Stringer Saul, Fifth Floor, 17 Hanover Square,
London, W1S 1HU.  At the meeting, the following resolutions will be proposed:



1.       an ordinary resolution (which will be approved on a poll) to approve
the waiver by the Panel of the obligation of the Concert Party (or any member of
it) to make a mandatory general offer for the Company which would otherwise
arise under Rule 9 of the City Code;



2.       an ordinary resolution to approve the Acquisition;



3.       an ordinary resolution to increase the authorised share capital of the
Company to 1,2000,000,000 ordinary shares;



4.       an ordinary resolution to give the Directors of the Company authority
under section 80 of the Act to allot relevant securities up to an aggregate
nominal amount of #11,225,000, such authority expiring at the conclusion of the
Company's next annual general meeting.



5.       a special resolution to disapply the statutory pre-emption rights
contained in section 89(1) of the Act for the purposes of certain future issues
including the excise of options and for the allotment of equity securities for
cash up to an aggregate nominal amount of #1,550,000 such authority expiring at
the conclusion of the Company's next general meeting;



6.       a special resolution to change the name of the Company to Nautical
Petroleum plc.



Recommendation



The Directors, having been so advised by Insinger de Beaufort, consider the
Proposals, including the Acquisition, the approval of the waiver of the
obligation on the Concert Party (or any member of it) to make a general offer to
Shareholders under Rule 9 of the City Code and the passing of the resolutions at
the EGM to be fair and reasonable and in the best interests of the Company and
its Shareholders.  Accordingly, the Directors unanimously recommend Shareholders
to vote in favour of the resolutions to be proposed at the EGM as they have
irrevocably undertaken to do in respect of their own beneficial and non
beneficial holdings of Existing Ordinary Shares which amount to 36,461,360
Existing Ordinary Shares (representing approximately 47.05 per cent. of the
voting rights exercisable at the EGM).



A circular has today been sent to shareholders and is available for collection
from:



Insinger de Beaufort

131 Finsbury Pavement

London

EC2A 1NT




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCVZLFBEXBBBBB