Disposal and Notice of General Meeting

 

TIDMOHM 
 
RNS Number : 3500U 
Offshore Hydrocarbon Mapping PLC 
13 October 2010 
 

13 October 2010 
         Offshore Hydrocarbon Mapping plc ("PLC", "Company" or "Group") 
PLACING OF 20,000,000 NEW ORDINARY SHARES AT 10 PENCE PER SHARE 
 DISPOSAL OF 
    OHM LIMITED AND OHM SURVEYS SDN BHD 
 AND 
 NOTICE OF GENERAL MEETING 
The Directors of Offshore Hydrocarbon Mapping plc ("PLC") are pleased to 
announce that, further to the announcement made on 22 September 2010, the 
Company has conditionally agreed to sell OHM Ltd and OHM Surveys Sdn Bhd to a 
company controlled by Sector Asset Management and its affiliates ("Sector") and 
Euro Trans Skips AS ("ETS")(together the "Concert Party") for a consideration of 
$150,000 (the "Disposals").  At the same time Sector and ETS have conditionally 
subscribed for 9,000,000 Ordinary Shares in aggregate at 10 pence per share 
representing a premium of 60 per cent. to the closing mid-market price on 12 
October 2010 (the "First Placing") and have conditionally agreed to subscribe 
for a further 11,000,000 Ordinary Shares at the same price (the "Placing").  In 
aggregate, the First Placing and the Placing are expected to raise GBP2.0 
million (GBP1.8 million after expenses) for the Company. 
The First Placing is conditional only upon admission of the First Placing Shares 
to trading on AIM.  Accordingly, application will be made for the First Placing 
Shares to be admitted to trading on AIM, which is expected to take place on 19 
October 2010.  Subject to admission of the First Placing Shares to AIM, the 
Concert Party holds 51.11 per cent. of the Company's issued share capital 
(including the First Placing Shares).  The members of the Concert Party are 
deemed to be acting in concert by the Panel.  In order to complete the First 
Placing and the Placing, the Panel has agreed to a waiver of the requirement for 
the Concert Party to make a general offer for the Company for the purposes of 
Rule 9 of the City Code following written confirmations consenting to such 
waiver from the Independent Shareholders who hold in excess of 50 per cent. of 
the Company's voting rights, excluding those of the Concert Party. 
The Disposals and the Placing (together the "Proposals") are conditional, inter 
alia, upon Shareholder approval being obtained.  Due to the size of the 
Disposals in relation to the Company, the Directors are required to seek 
Shareholder consent to the Disposals for the purposes of AIM Rule 15.  In 
addition, in order to effect the Placing the Directors will seek the required 
authorities under the Companies Act 2006.  Accordingly, the Company will shortly 
dispatch a circular to Shareholders convening a general meeting of the Company 
to be held on 1 November 2010 (the "Circular").  In addition, the Circular will 
shortly be available to view on the Company's website, www.ohmrsi.com.  The 
Circular contains further details of the background to and reasons for the 
Disposals and the Placing and sets out in further detail why the Board considers 
the Proposals to be in the best interests of Shareholders as a whole.  Subject, 
inter alia, to Shareholder consent to the Proposals being obtained at the 
General Meeting, the Disposals are expected to be completed on 2 November 2010 
and the Placing Shares are expected to be admitted to trading on AIM on 2 
November 2010. 
In connection with the Proposals, the Company has entered into the Subscription 
Agreement and the Sale Agreement and will also enter into the Asset Transfer 
Agreement, the Services Agreement and the Relationship Agreement.  Further 
details of these agreements are set out in the Circular.  The Concert Party is 
deemed to be a related party for the purposes of the AIM Rules and accordingly 
the entering into of the Subscription Agreement, the Sale Agreement, the 
Services Agreement and the Relationship Agreement (together the "Related Party 
Agreements") are all deemed to be related party agreements for the purposes of 
the AIM Rules.  The Concert Party has undertaken not to vote in relation to the 
Independent Shareholder Resolutions.  The Board, insofar as it is required for 
the purposes of the AIM Rules in relation to related party transactions, has 
sought the advice of the Company's Nominated Adviser, KBC Peel Hunt. 
The Directors, having consulted with KBC Peel Hunt in respect of the Related 
Party Agreements, consider such agreements to be fair and reasonable insofar as 
Shareholders are concerned.  In providing its advice KBC Peel Hunt has relied 
upon the Directors' commercial assessments. 
Current trading and prospects 
CSEM acquisition revenues for the second half of the financial year, 1 March to 
31 August 2010, improved substantially over the first half from GBP1.6 million 
to GBP4.8 million. This reflected the increased vessel utilisation enjoyed by 
the OHM Leader associated with data acquisition projects in Asia Pacific, 
notably for Reliance Industries, Petrogas and Karoon Energy. Notwithstanding 
this improvement in H2 CSEM acquisition, activities remain substantially loss 
making at the operating level due to the high fixed costs associated with 
leasing and operating the vessels. 
WISE revenues and revenues from seismic inversion business remained 
substantially flat in the second half of the year to 31 August 2010 compared to 
the first half at GBP0.35 million and GBP1.39 million respectively. 
OHM Group revenues for the year to 31 August 2010 are expected to be 
approximately GBP9.9 million, compared to GBP9.2 million for the 2009 financial 
year, which represents a modest 7 per cent. increase. 
The EBITDA loss for the Group for the six months to 31 August 2010 will be in 
the GBP2.8 to GBP3.3 million range compared to an EBITDA loss (before 
exceptional charges) of GBP2.8 million for the six months to 28 February 2010. 
The exceptional charges in the first half of the financial year related to a 
GBP2.14 million charge on conversion of vessel charter commitments into shares 
following the General Meeting held on 9 September 2009. 
The Group's cash balance at 31 August 2010 was GBP3.44 million (compared to 
GBP1.38 million at 28 February 2010) and includes the benefit of approximately 
GBP1.90 million of payments deferred by ETS from OHM Ltd which are due under the 
amended charter agreements. 
The figures for the six months to 31 August 2010 are unaudited and have yet to 
be reviewed by the Group's independent auditors. 
Following Completion, management attention will be directed towards growing the 
technology and consulting business of the Remaining Group. Several key areas 
will be targeted, including: 
·     Continued development of a fully integrated seismic and CSEM 
interpretation environment in order to capitalise on the Company's WISE 
integration strategy; 
·     Investment in sales and marketing resources and activities to accelerate 
revenue growth in the Company's seismic inversion business unit; 
·     Establishment of the Remaining Group as the only independent and 
integrated CSEM processing supplier, a unique position in the geophysical 
services industry which can be leveraged in a number of key areas; and 
·     Comprehensive review of overheads in the Remaining Group with a view to a 
reduction in overheads and an increase in overall margins. 
Seismic data remains the geophysical tool of choice for subsurface exploration 
and exploitation of oil and gas resources. However, the combination of 
non-seismic data (such as well-logs, CSEM and MT) adds value to seismic and is 
becoming increasingly important too in areas where seismic alone provides an 
incomplete or ambiguous result. The Remaining Group, with its expertise in 
seismic, well-logs, CSEM and MT processing and interpretation is strongly 
positioned to take advantage of these integration opportunities. 
Dr. Lucy MacGregor, PLC CTO commented: "The value of CSEM and MT surveying is 
realised only when these data are properly integrated with well and seismic 
information. This transaction creates a unique and independent consulting 
organisation, with the technology and experience to undertake high end seismic 
and well-driven reservoir characterisation projects but also with a world-class 
suite of tools and expertise to process, interpret and integrate electromagnetic 
data." 
Contacts: 
+---------------------------------------+---------------------+ 
| Offshore Hydrocarbon Mapping plc      | www.ohmrsi.com      | 
+---------------------------------------+---------------------+ 
| Richard Cooper - Chief Executive      | 0870 429 6581       | 
| Officer                               |                     | 
+---------------------------------------+---------------------+ 
| Bob Auckland- Finance Director        | 0870 429 6581       | 
+---------------------------------------+---------------------+ 
| KBC Peel Hunt (Nominated adviser &    |                     | 
| Broker)                               |                     | 
+---------------------------------------+---------------------+ 
| Julian Blunt / Simon Brown / Harry    | 020 7418 8900       | 
| Florry                                |                     | 
+---------------------------------------+---------------------+ 
| Aquila Financial Ltd (PR)             |                     | 
+---------------------------------------+---------------------+ 
| Peter Reilly                          | 0118 979 4100       | 
+---------------------------------------+---------------------+ 
Capitalised terms used, but not defined, in this announcement have the same 
meaning as given to them in the Circular unless the context requires otherwise. 
KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom by 
the Financial Services Authority, is acting exclusively for the Company in 
relation to the First Placing and the Proposals and will not be responsible to 
any person other than the Company under the Financial Services and Markets Act 
2000, the rules of the Financial Services Authority or otherwise for providing 
the protections afforded to its clients or for advising any other person in 
relation to the contents of this announcement, the Proposals or any matter, 
transaction or arrangement referred to herein.  KBC Peel Hunt Ltd is not making 
any representation or warranty, express or implied, as to the contents of this 
announcement or the Circular. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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