Update and Proposed Cancellation of Admission

 

TIDMCDS 
 
RNS Number : 0840M 
CDS Oil & Gas Group PLC 
18 May 2010 
 

 
 
               CDS Oil and Gas Group plc - "CDS" or the "Company" 
 
    Update and Proposed cancellation of admission of Ordinary Shares to AIM 
 
On 29 September 2009, it was announced that CDS's Principal Shareholders (being 
Feltown Assets Inc., Werton Finance S.A. and Red Law Corporation Services Inc.) 
had agreed to continue to support the financial needs of the Company as it 
sought partners to assist with the funding of the Company's exploration 
activities.  Since then, the Company has been in discussions with a number of 
prospective investors that have not yet resulted in funding being available. 
Whilst the Company believes that these discussions will, at some stage, reach a 
satisfactory conclusion, negotiations are still ongoing and the Company remains 
dependent upon the Principal Shareholders for financial support in the form of 
loans to the Company. 
 
The board of directors of CDS (the "Board") is of the opinion that CDS's 
financial situation is not appropriate for an AIM quoted company.  Accordingly, 
the Board wishes to announce its intention to apply for the cancellation of 
admission to trading on AIM of the ordinary shares of the Company, subject to 
shareholder approval at a general meeting. It is anticipated that the effective 
date of the cancellation will be 23 June 2010 following the general meeting to 
be held on or around 15 June 2010. 
 
Rationale for the Cancellation 
 
In arriving at this decision, the Board has considered: (1) the only source of 
funding currently available to the Company are loans provided by the Principal 
Shareholders; (2) the significant ongoing costs associated with maintaining a 
quotation on AIM; (3) the relative inactivity, in ordinary share trading volume 
terms, of the Company's shares due largely to the absence of a significant free 
float; and (4) the removal of the ongoing obligations and costs associated with 
the Company's continued compliance with the AIM Rules for Companies. 
 
The cancellation will result in the Company significantly reducing its 
administrative costs. Accordingly, the Board unanimously believes that it is in 
the best interests of the shareholders to seek cancellation at the earliest 
opportunity. 
 
The Board has received undertakings to vote in favour of the resolution to be 
proposed at the general meeting to effect the cancellation from shareholders 
holding shares representing, in aggregate, 71.28 per cent. of the issued share 
capital of the Company. 
 
Effect of Cancellation 
 
Following cancellation, the Ordinary Shares will not be quoted on any publicly 
quoted market in the UK or elsewhere.  Should the cancellation be approved, the 
Company intends to act in an appropriate manner befitting a company that no 
longer trades through a public market. 
 
The principal effects of cancellation will be: 
 
·      there will no longer be a formal market mechanism enabling the 
shareholders to trade their shares through the AIM Market. The Company's 
Depositary Interest and CREST facility will be cancelled and the volume of 
trading in the Ordinary Shares is likely to be severely reduced 
 
·      the Company will not be bound to announce material events, nor announce 
interim or final results (although annual accounts will still be sent to 
shareholders prior to an AGM being held, in accordance with the Company's 
articles of association) 
 
·      the Company will no longer be required to comply with any of the 
corporate governance requirements for companies trading on AIM 
 
A circular providing further details on the proposed cancellation and general 
meeting is being prepared and will be posted to shareholders shortly. The 
circular will also available on the Company's website: www.cdsogg.com. 
 
Exploration Update 
 
Following an agreement reached with the Environmental Agency (SEAM) concerning 
the extension of the environmental license of the Boqueron block, operations are 
resuming in connection with the exploration programme submitted to and reviewed 
by the Ministry of Public Works and Communication (MOPC). Subject to funding, 
the Company aims to drill 3 wells by the end of November 2010 with preparation 
work beginning at the end of this month. The Company has recruited Mr Ruben 
Soria, a drilling engineer who has worked with Halliburton, Repsol-YPF, BG and 
Schlumberger and who has extensive experience in South America, and Bolivia in 
particular, to lead the execution of this programme. 
 
+---------------------------------+------------------+ 
| Further information:            |                  | 
+---------------------------------+------------------+ 
| CDS Oil and Gas Group           |                  | 
+---------------------------------+------------------+ 
| Patrice Roman - CEO             | [phone] | 
+---------------------------------+------------------+ 
| Westhouse Securities Limited    |                  | 
+---------------------------------+------------------+ 
| Richard Baty / Petre Norton     | +020 7601 6100   | 
+---------------------------------+------------------+ 
|                                 |                  | 
+---------------------------------+------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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