Highlands Natural Resources PLC Subscription & Placing, Open Offer & Notice of GM (3757K)

TIDMHNR

RNS Number : 3757K

Highlands Natural Resources PLC

06 July 2017

THIS ANNOUNCEMENT, INCLUDING THE APPIX AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTED THAT IT WILL BE SO APPROVED.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU No. 596/2014). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

6 July 2017

Highlands Natural Resources plc

("Highlands" or the "Company")

GBP2.6 million Subscription and Placing and up to GBP0.8 million Open Offer and Notice of General Meeting

Highlands, the London-listed natural resources company, is pleased to announce that it has conditionally raised gross proceeds of GBP2,586,950 through a proposed issue of 21,557,920 New Ordinary Shares at a price of 12 pence per share.

An offer for not less than GBP2 million is being conducted via the PrimaryBid.com platform. This is open to investors wishing to participate at the same price. Details of this PrimaryBid offer are in the following RNS. In addition, the Company has raised GBP0.59 million from a placing of new ordinary shares to institutional investors.The Company is also proposing separately to make an Open Offer to all Qualifying Shareholders to enable Qualifying Shareholders to have the opportunity to participate in the capital raising process at the Issue Price. It is proposed that the Open Offer will raise up to GBP0.81 million, in addition to the funds raised pursuant to the Subscription and Placing.

The primary use of proceeds from the proposed Subscription, the Placing, the PrimaryBid Offer and the Open Offer will be to drill the first well of the up to a 24 well drill programme at its East Denver Niobrara Project ("East Denver"), in Q3 2017. The remaining funds will be applied to the Company's two other core projects, DT Ultravert, a re-fracking and parent well protection technology with one patent granted and additional patents pending in the US and internationally, and Helios Two, a helium and natural gas discovery in Montana.

Highlights

-- Not less than GBP2 million to be raised by way of the Subscription from investors on PrimaryBid.com and the PrimaryBid app at a price of 12 pence per share

o Subscription open from 5.00 p.m. on 6 July 2017 and close at 9.00 p.m. on 6 July 2017;

   --     GBP0.59 million to be raised by way of placing to institutional investors 
   --     Open offer enables existing Shareholders to participate in Fundraising 
   --     Net proceeds primarily to: 

o Fund the drilling of the first well at East Denver (up to24 well drill programme planned to commence Q3 2017);

o Any remaining funds for:

-- Continued marketing of the Company's revolutionary DT Ultravert Parent Well Protection and Re-fracking technology;

-- Potential re-injection of water at Helios Two helium and natural gas project

-- Funding follows commitment secured as announced today from Raisa II, LLC ("Raisa") a leading oil and gas investment and development company based in Denver agreeing to fund up to US$32.65 million in drilling costs for East Denver

Robert Price, Chairman and CEO, commented:

"This fundraise allows us to commence drilling at East Denver, a major milestone which will contribute to the advancement of our portfolio and assist in crystallising its inherent value. With the Raisa financing agreement signed today for up to US$32.65 million and negotiations well-advanced for further third party financing for our East Denver Project, we also believe we are well placed to be able to continue drilling up to 24 wells in Q3 2017 and beyond. This would be transformational for Highlands, marking our first oil and gas production, with capital being utilised to develop the rest of our portfolio and giving us the potential to become a profitable company in 2018."

Further details on the Open Offer will be provided in due course and the Company expects to post a Prospectus to Shareholders in connection with the Open Offer tomorrow. The Fundraising is conditional, amongst other things, on Shareholder approval. The Subscription is available online via PrimaryBid.

The Prospectus, which includes full details on the Group and the terms and conditions of the Subscription, Placing and Open Offer, has been approved by the UK Listing Authority. A copy of the Prospectus is available from https://www.highlandsnr.com and a copy has been submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.hemscott.com/nsm.do.

Capitalised terms used in this announcement shall have the meanings set out in the Prospectus.

For further information, please visit www.highlandsnr.com or contact:

 
                        Highlands Natural       [phone] 
 Robert Price            Resources plc           1066 
                                               [phone] 
 Brinsley Holman        Keith Bayley Rogers     4098 
 
                        St Brides Partners     [phone] 
 Lottie Brocklehurst     Ltd                    1177 
                        St Brides Partners     [phone] 
 Hugo de Salis           Ltd                    1177 
 

This announcement contains certain statements that are or may be deemed to be "forward-looking statements" which are based on current expectations and projections about current events. These statements typically contain words such as "targets", "believes", "intends", "may", "will", "should", "expects" and "anticipates" and words of similar import. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. 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 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.

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 who require advice should consult an independent financial adviser.

The distribution of this announcement and the offering of the New Ordinary Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company to inform themselves about, and to observe, any such restrictions.

Principal terms of the Subscription, the Placing and the Open Offer

The Company intends to issue 16,666,667 New Ordinary Shares through the Subscription, 4,891,253 New Ordinary Shares through the Placing and up to 6,783,734 New Ordinary Shares through the Open Offer at 12 pence per New Ordinary Share to raise gross proceeds of up to approximately GBP3.4 million (assuming the Open Offer is subscribed in full). The Subscription, the Placing and the Open Offer require Shareholder approval, which will be sought at the General Meeting. The Issue Price of 12 pence per New Ordinary Share represents a 21.31 per cent. discount to the closing price of 15.25 pence on 5 July 2017 (being the latest practicable date prior to the announcement of the Fundraising). The Fundraising is not being underwritten but PrimaryBid has committed pursuant to the terms of the Subscription Letter, conditional upon amongst other things Admission, to the Company that the gross proceeds of the Subscription will not be less than GBP2 million. In addition, Raisa has unconditionally agreed to pay Highlands US$776,000 in cash pursuant to the terms of the JDA and conditional upon amongst other things Admission, the Company has committed funds of GBP586,950 under the Placing. The committed funds from the Subscription, the Placing and Raisa amount to, in aggregate, approximately US$3.52 million (net of expenses).

Subscription

PrimaryBid is facilitating the Subscription by providing a platform through which potential investors may subscribe for Subscription Shares. For further information on PrimaryBid or the procedure for application under the offer element of the Subscription, potential investors may visit www.PrimaryBid.com; or call PrimaryBid on [phone], or download the PrimaryBid app from the App Store or Google Play.

PrimaryBid is an online funding platform that enables retail investors who successfully register with PrimaryBid to gain access to placings and fundraisings of listed companies. The platform is open to all investors to enable companies to readily access the large and active private investor market.

PrimaryBid Limited is an appointed representative of Darwin Strategic Ltd, which is authorised and regulated by the Financial Conduct Authority. The Company has entered into the Subscription Letter in relation to the issue of Subscription Shares at the Issue Price. Potential investors will be able to subscribe for Subscription Shares at the Issue Price for a limited amount of time via the PrimaryBid platform as further detailed below, although the Company has contracted only with PrimaryBid and will not contract direct with any of PrimaryBid's investors. Details and timings of how and when investors may apply for Subscription Shares facilitated through the PrimaryBid platform will be announced via an RIS by the Company in conjunction with publication of this Prospectus but it is expected that the Subscription will open at 5.00 p.m. on 6 July 2017 and close at 9.00 p.m. on 6 July 2017.

Pursuant to the Subscription Letter, 16,666,667 New Ordinary Shares will be issued fully paid to PrimaryBid at the Issue Price for an aggregate amount of GBP2 million (before expenses). Anyone wishing to subscribe for Subscription Shares will be required to pay for them in advance of Admission through PrimaryBid's website. The Company understands that the proceeds of the Subscription will be paid into the client account of Jarvis and held until Admission, at which point the proceeds (less the commission to be paid to PrimaryBid pursuant to the Subscription Letter and as further described in paragraph 15.7 of Part XIV) shall be released to the Company. On Admission, the Company will arrange for the delivery of the Subscription Shares to PrimaryBid in CREST against payment for them by PrimaryBid. PrimaryBid will arrange for Subscription Shares to be allocated to its individual investors in accordance with their respective subscriptions on the PrimaryBid platform. To the extent that any Subscription Shares have not been applied for by investors through the PrimaryBid platform, such Subscription Shares shall be for the account of PrimaryBid.

The Subscription is conditional on the Resolutions being passed, Admission and the closing of the Placing at the same time as the Subscription (that is, on Admission). PrimaryBid has, pursuant to the Subscription Letter, guaranteed to the Company that the gross proceeds of the Subscription will be GBP2 million. However, subject to demand from potential investors, PrimaryBid may at its discretion increase the Subscription to a maximum of 41,666,667 New Ordinary Shares, thereby raising gross proceeds of up to GBP5 million through the Subscription.

The Subscription Shares will, when issued, represent approximately not less than 17.3 per cent of the Enlarged Issued Share Capital (assuming that the Open Offer is subscribed for in full). All allotments and issuance of Subscription Shares are at the sole discretion of the Company save that the aggregate number of Ordinary Shares to be issued pursuant to the Subscription will not exceed 41,666,667 New Ordinary Shares and no existing Ordinary Shares are being offered for sale.

Allocation of Subscription Shares will be filled on a "first come, first served" basis and the Company may close the Subscription to further subscriptions at any time for any reasons. In particular the Company may close the Subscription so as not to exceed the maximum number of Subscription Shares. Any excess funds received by the Company (or PrimaryBid as agent for the Company) from subscribers for Subscription Shares will be returned.

The Subscription is conditional on completion of the Placing at the same time as the Subscription, that is, on Admission. The Subscription is not conditional on the closing of the Open Offer.

The Company consents to the use of this Prospectus by PrimaryBid in connection with the Subscription in the United Kingdom from the date of this Prospectus until 9.00 p.m. on 6 July 2017.

The offer period within which any subsequent resale or final placement of financial securities by PrimaryBid can be made, and for which consent is given to PrimaryBid to use this Prospectus from the date of this Prospectus and closes at 9.00 p.m. on 6 July 2017 unless closed prior to that date (any such closure to be announced via a Regulatory Information Service Provider).

When using the Prospectus, PrimaryBid must state on its website that it uses the Prospectus in accordance with the Company's consent. PrimaryBid is required to provide the terms and conditions of the Subscription to any prospective investor who has expressed an interest in participating in the Subscription to PrimaryBid. Information on the terms and conditions of any subsequent resale or final placement of securities by PrimaryBid is to be provided at the time of the offer by PrimaryBid. The Company consents to the use of this Prospectus by PrimaryBid and accepts responsibility for the content of this Prospectus including with respect to any subsequent resale or final placement of securities by PrimaryBid.

Any new information with respect to PrimaryBid unknown at the time of approval of this Prospectus will be available on the Company's website at http://highlandsnr.com/.

Placing

Placees have conditionally agreed to subscribe for 4,891,253 New Ordinary Shares at the Issue Price (representing gross proceeds of GBP0.59 million). The Placing Shares are not subject to clawback and are not part of the Open Offer. The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared after the date of their issue.

The Placing is conditional, amongst other things, on:

(a) the approval of the Resolutions, which grant the Directors authority to allot Ordinary Shares and disapply statutory pre-emption rights in relation to such allotment;

(b) Admission;

(c) the Subscription closing at the same time as the Placing, that is, on Admission; and

(d) no force majeure event occurring prior to Admission.

Accordingly, if any of such conditions are not satisfied, or, if applicable, waived, the Placing will not proceed. It should be noted that the Placing is not conditional on completion of the Open Offer.

The Placing is subject to the terms and conditions of the Placing Agreement, further details of which are set out in the Prospectus.

Open Offer

The Company also intends to raise up to approximately GBP0.81 million (gross) through an Open Offer of 6,783,734 New Ordinary Shares at the Issue Price. The Open Offer is conditional on the Resolutions being passed, Admission and the Subscription and the Placing completing at the same time (that is, at Admission) as the Open Offer. Qualifying Shareholders are being given the opportunity to subscribe for New Ordinary Shares pro rata to their existing shareholdings at the Issue Price on the basis of:

1 Open Offer Share for every 10 Existing Ordinary Shares

held and registered in their name at the Record Date. Qualifying Shareholders may apply for any whole number of New Ordinary Shares. Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down according to the Directors' discretion.

Fractions of Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. The Open Offer Shares when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared after the date of their issue.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their entitlements under the Open Offer.

Application has been made for the Open Offer Entitlements and Excess Open Offer Entitlements to be admitted to CREST. It is expected that the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 10 July 2017. The Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 10 July 2017. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Qualifying Shareholders may apply for Excess Shares pursuant to the Excess Application Facility. Qualifying non-CREST Shareholders will receive an Application Form, which sets out their maximum entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them, and gives them the opportunity to apply for Excess Shares under the Excess Application Facility. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements and Excess Open Offer Entitlements as soon as possible after 8.00 a.m. on 10 July 2017.

Shareholders should note that the Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in the Prospectus and, where relevant, in the Application Form.

Applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements. In addition and subject to availability, the Excess Application Facility will enable Qualifying Shareholders to apply for any whole number of Excess Shares in excess of their Open Offer Entitlements to the extent that other Qualifying Shareholders do not take up their Open Offer Entitlement in full. Qualifying non-CREST Shareholders should complete the relevant sections of the Application Form. Qualifying CREST Shareholders will have Excess Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4(b) of Part VIII on how to apply for the Excess Shares pursuant to the Excess Application Facility. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down according to the Directors' discretion.

The Fundraising as a whole is conditional upon the passing of the Resolutions. Accordingly, if such condition is not satisfied the Fundraising will not proceed and, in the case of the Open Offer, any Open Offer Entitlements and Excess Open Offer Entitlements admitted to CREST will thereafter be disabled. If the Resolutions are passed, whether or not a specific element of the Fundraising will proceed will then depend on the satisfaction of any additional conditions to which that specific element of the Fundraising is subject. The Subscription is conditional on the simultaneous completion of the Placing, but is not conditional on the Open Offer completing. In the event that the Subscription and the Placing do not both complete, no application for Admission will be made. The Placing is conditional on, amongst other things, the simultaneous completion of the Subscription, but is not conditional on the Open Offer completing. The Open Offer is conditional upon both the Subscription and the Placing completing at the same time.

Effect of the subscription, the placing and the open offer

Upon Admission, the Enlarged Issued Share Capital is expected to be 96,179,003 Ordinary Shares. On this basis, New Ordinary Shares issued through the Subscription, the Placing and the Open Offer will represent 29.5 per cent. of the Enlarged Issued Share Capital. New Ordinary Shares issued through the Subscription will represent 17.3 per cent. of the Enlarged Issued Share Capital, New Ordinary Shares issued through the Placing will represent 5.1 per cent. of the Enlarged Issued Share Capital and New Ordinary Shares issued through the Open Offer will represent 7.1 per cent. of the Enlarged Issued Share Capital. All of these figures assume that the Open Offer is subscribed for in full.

Following the issue of the New Ordinary Shares to be allotted pursuant to the Fundraising, Qualifying Shareholders who do not take up any of their Open Offer Entitlement will suffer a dilution of approximately 29.5 per cent. to their interests in the Company, assuming full take up under the Open Offer. If a Qualifying Shareholder takes up his Open Offer Entitlement in full he will suffer a dilution of 22.4 per cent. to his interest in the Company, assuming full take up under the Open Offer.

Use of proceeds

The Subscription, the Placing and the Open Offer will raise up to approximately GBP3 million (before expenses and assuming that the Open Offer is fully subscribed) for the Company. Of the total proceeds of the Fundraising, the minimum committed proceeds of the Fundraising (before expenses and for these purposes excluding the Open Offer and assuming that the Subscription only raises the minimum amount of GBP2 million) are GBP2,586,950. While the Directors are confident that the Company will, via the Subscription and Open Offer, receive a greater amount of capital than the amount stated above, the Company has nevertheless set out a strategy that is achievable using the minimum committed proceeds below (which includes the unconditional payment to be received from Raisa under the JDA):

 
                   GBPm      $m 
---------------  ------  ------ 
 Subscription      2.00    2.57 
---------------  ------  ------ 
 Placing           0.58    0.75 
---------------  ------  ------ 
 Raisa payment    0.61*   0.78* 
---------------  ------  ------ 
 
 Expenses          0.45    0.58 
---------------  ------  ------ 
 
 Total             2.74    3.52 
---------------  ------  ------ 
 

* See Part XIV for further details

Assuming that only the Minimum Proceeds are raised the Company would invest solely in the East Denver Project and specifically plans to drill its first well in this location.

The costs of drilling the first well are:

 
                                       US$m 
------------------------------------  ----- 
 Drilling costs                        1.66 
------------------------------------  ----- 
 Completion costs                      2.96 
------------------------------------  ----- 
 Surface facilities                    0.26 
------------------------------------  ----- 
 
 Total                                 4.88 
------------------------------------  ----- 
 
 Highlands' share (after deducting 
  Raisa's 28.75% contribution)         3.48 
------------------------------------  ----- 
 
 Rebate from Raisa for pre-drilling 
  expenses paid to date                0.12 
------------------------------------  ----- 
 
 Highlands total cost for drilling 
  its first well                       3.36 
------------------------------------  ----- 
 

Therefore, taking account of the Minimum Proceeds and the expected costs of the first well, Highlands has headroom of US$0.23m (including Raisa's 28.75 per cent. share of costs) for any contingencies and cost overruns of the drilling programme. In addition, Highlands has approximately US$1.0m of available cash resources. Highlands has assembled a talented team of land, geology, engineering, operations, finance and general management personnel, which are a core asset of the Company. The ongoing costs of the Company's general operating expenses and general overhead costs amount to approximately US$0.2m per month. These are currently covered by the Company's existing cash resources and the Directors anticipate that a successful first well will provide operating profits substantially in excess of Highlands' monthly costs. A key attraction of the East Denver Project is that it is highly prospective acreage with a rapid production profile and repayment term. Based on the comparable data referred to in Section 4.0 of the East Denver CPR, the Directors expect to earn significant revenues within two months of drilling.

Accordingly, having taking a prudent view of future costs and oil & gas prices, the Directors do not expect to apply any funds from the Subscription, the Placing and the Open Offer to cover the Company's ongoing expenses and general overhead costs. The Directors believe that the Minimum Proceeds strategy, namely drilling its first well, will be concluded ahead of the contractual deadline of 1 September 2017.

Comments on Potential Additional Proceeds

The Directors continue to believe that the Company will receive more capital than the minimum proceeds of the Fundraising. Any proceeds from the Open Offer would be accretive to the Company's cash position as would any proceeds from the Subscription that are in excess of the minimum amount of GBP2 million. Neither of these have been factored into the Minimum Proceeds strategy.

The Minimum Proceeds strategy also makes a conservative assumption that the Company fails to attain any further third party financing for its East Denver Project by 1 September 2017. Highlands is in advanced negotiations with other potential third party finance partners. With the successful conclusion of the JDA with Raisa and the announcement of this Fundraising, the Board believes that the Company is likely to receive further offers of third party financing and to conclude these before the 1 September 2017 drilling deadline. Consequently it is likely in the Board's opinion that the cost to Highlands of the first well (and subsequent wells) at the East Denver Project will be less than the estimate above. Accordingly, having drilled the first well, the Board has a reasonable expectation that, taking into account (i) proceeds from the Fundraising in excess of the Minimum Proceeds, (ii) further third party financing received by Highlands, and (iii) in time, revenue earned from successful oil & gas production at it first and subsequent wells, Highlands will be in a position to develop its East Denver Project beyond a single well. The Directors expect the costs of future wells to remain constant at around US$5m per well.

With that in mind, and subject to sufficient funds being available following the successful drilling of the first well, the Company also proposes to take steps to finalize:

a) the two permits still pending at the East Denver Project;

b) the pending unitization applications at the Colorado Oil and Gas Conservation Commission; and

c) the pending increased density applications pending at the Colorado Oil and Gas Conservation Commission.

In addition to advancing a number of further potential drilling locations towards a "rig ready" status, these activities better position the East Denver project for continued third party funding by achieving all necessary regulatory approvals. The total costs of these approvals is estimated to be US$120,000.

In addition to its activities in the East Denver Project, subject to sufficient funds, Highlands will continue to develop its other two main projects as follows:

DT Ultravert

The Company will market the technology throughout the oil & gas industry. Maximum expected costs for advertising, PR, travel and related overhead for the DT Ultravert team would not exceed US$250,000 over 12 months.

Helios Two

To dispose of produced waters at Helios Two, the Company would re-inject produced water down the existing Helios Two wellbore instead of drilling a dedicated injection well. This process would entail approximately two months of continuous pumping and operating expenses, and no new capital expenses. Total costs would be approximately US$86,000.

For clarity, whilst the Board has determined to concentrate on its East Denver Project in the near term, Highlands remains committed to developing its other projects and the Board will review on a regular basis the funds (if any) that it is in a position to commit to DT Ultravert and Helios Two.

Additional information

The attention of Shareholders is drawn to the risk factors set out in Part II of the Prospectus which provide additional information on the Fundraising.

General Meeting

The General Meeting will be convened by the Company for 11.00 a.m. on 26 July 2017. The Prospectus, containing a notice of the General Meeting and further details on the Fundraising, will be despatched to Shareholders tomorrow outlining terms of the Fundraising and seeking the necessary Shareholder approvals.

Robert Price and Melvyn Davies have each signed an irrevocable undertaking to vote in favour of the Resolutions in respect of their entire shareholding in the Company (representing, in aggregate, 17.98 per cent. of the Company's existing issued share capital).

Disclaimer

The New Ordinary Shares have not been nor will be registered under the United States Securities Act of 1933, as amended ("Securities Act"), and may not be offered, sold or transferred, directly or indirectly, within the United States 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. Any offering to be made in the United States will be made to a limited number of "qualified institutional buyers" ("QIBs") within the meaning of Rule 144A under the Securities Act pursuant to an exemption from registration under the Securities Act in a transaction not involving any public offering. The Placing Shares and the Open Offer Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act ("Regulation S"). No public offering of the Placing Shares or the Open Offer Shares is being made in the United States, United Kingdom or elsewhere.

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

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Record Date For Entitlements         Close of business 
  Under The Open Offer                 on 5 July 2017 
 
 Publication Of Prospectus            6 July 2017 
 
 Last Time And Date For Receipt       11.00 a.m. 27 July 
  Of Forms Of Proxy                    2017 
 
   Open Offer Entitlements And          10 July 2017 
   Excess Open Offer 
   Entitlements Credited To Crest 
   Accounts Of 
   Qualifying Crest Shareholders 
 
 Last Time And Date For Splitting 
  Of Application Forms 
  (To Satisfy Bona Fide Market        3.00 p.m. 25 July 
  Claims Only)                         2017 
 
 General Meeting                      11.00 a.m. 31 July 
                                       2017 
 
 Latest Time And Date For Receipt 
  Of Completed 
  Application Forms From Qualifying 
  Shareholders And 
  Payment In Full Under The 
  Open Offer Or Settlement 
  Of Relevant Crest Instructions      11.00 a.m. 27 July 
  (As Appropriate)                     2017 
 
 Admission And Commencement           8.00 a.m. 1 August 
  Of Dealings In New Ordinary          2017 
  Shares 
 
 Crest Members' Accounts Credited     1 August 2017 
  In Respect Of New 
  Ordinary Shares In Uncertificated 
  Form 
 
   Despatch Of Definitive Share 
   Certificates For New 
   Ordinary Shares In Certificated 
   Form By Not Later Than             15 August 2017 
 
 
 

Notes:

1. Each of the times and dates in the above timetable, and shown elsewhere in this announcement, are indicative only and if any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service.

   2.    All of the above times refer to London time unless otherwise stated. 

3. All events listed in the above timetable following the General Meeting are conditional on the passing of the Resolutions at the General Meeting.

FUNDRAISING STATISTICS

 
 Number Of Ordinary Shares 
  In Issue                            67,837,349 
 
 Issue Price                          12p 
 
 Number Of Subscription Shares        16,666,667 
 
 Number Of Placing Shares             4,891,253 
 
 Maximum Number Of Open Offer 
  Shares                              6,783,734 
 
 Market Capitalisation at the         GBP11.5m 
  Issue Price 
 
 Number of Warrants and Options 
  Outstanding at 
  Admission                           33,086,667 
 Enlarged Issued Share Capital 
  at Admission                        96,179,003 
 
 Fully Diluted Share Capital 
  (Assuming All 
  Outstanding Warrants And Options 
  Are Converted To 
  Ordinary Shares)                    129,265,670 
 
 Maximum Percentage of the 
  Enlarged Issued Share 
  Capital that the New Ordinary 
  Shares will Represent*              29.5% 
 
 Estimated Gross Proceeds of          GBP3.4m 
  the Subscription, the 
  Placing And The Open Offer* 
 
 Estimated Net Proceeds of            GBP3.0m 
  the Subscription, the 
  Placing And The Open Offer* 
 
 SEDOL                                BWC4X26 
 
 Ordinary Share ISIN                  GB00BWC4X262 
 
 Open Offer Basic Entitlements        GB00BD71C660 
  ISIN 
 
 Open Offer Excess Entitlements       GB00BD71C777 
  ISIN 
 
 * assuming full take-up under 
  the Open Offer 
 

Notes to Editors

Highlands (LSE: HNR.L) is a London-listed natural resources company with a portfolio of high-potential oil, gas and helium assets and technologies. The company's core projects include:

-- East Denver Niobrara: a farm-in opportunity for horizontal oil and gas wells targeting the Niobrara shale formation in a well-studied area of the Denver Julesburg Basin.

-- DT Ultravert: a re-fracking and parent well protection technology with one patent granted and 20 patents pending in the United States and internationally. Highlands is advancing commercial conversations with a range of oil and gas operators to create revenue-sharing opportunities for DT Ultravert applications.

-- Helios Two: a 105,000+ acre helium and natural gas prospect in SE Montana with drilling and assessment operations ongoing.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCEASXKEDKXEFF

(END) Dow Jones Newswires

July 06, 2017 11:38 ET (15:38 GMT)