Savannah Petroleum PLC Publication of Circular and Notice of GM (1882R)

TIDMSAVP

RNS Number : 1882R

Savannah Petroleum PLC

26 February 2019

26 February 2019

Savannah Petroleum PLC

("Savannah" or "the Company")

Publication of Circular and Notice of GM

Savannah Petroleum PLC, the British independent oil & gas company focused around activities in Niger and Nigeria, announces that it is today posting a circular to shareholders (the "Circular") and a form of proxy ("Form of Proxy") in relation to a general meeting of the Company (the "General Meeting") to be convened in connection with the issuance of Consideration Shares as part of the Seven Energy Transaction.

The Circular contains notice of the General Meeting, which will be held at 10.30 a.m. on 14 March 2019 at Novotel London Canary Wharf, 40 Marsh Wall, London E14 9TP. A copy of the Circular and the Form of Proxy will shortly be made available on the Company's website at https://www.savannah-petroleum.com/en/key-documents.

The key sections of the Circular have been extracted and included in the announcement below. The Company continues to expect that completion of the Seven Energy Transaction will occur on or before 31 March 2019.

Introduction

The Company is a public limited company, was incorporated in the UK on 3 July 2014 and admitted to trading on AIM on 1 August 2014. Savannah is an independent oil and gas company, focused around maximising stakeholder value from activities in Niger and Nigeria. The Company is the holding company of the Existing Group and currently operates from offices in London, UK, and Niamey, Niger.

Since being admitted to trading on AIM, the Company has raised US$274 million, which has funded the acquisition of the R3/R4 PSC, the further development of those Nigerien assets, and the planned acquisition of the Seven Assets from Seven and the Seven Energy Creditor Group (the "Transaction").

Its current principal business is the exploration, appraisal and planned expected monetisation of oil located in the R1/R2 and R3/R4 PSC Areas in Niger, which cover c.50% of the highly prospective Agadem Rift Basin ("ARB") and where the Company made five discoveries from five wells in its maiden exploration campaign over the course of 2018. The Company is also in the process of finalising the legal completion of the Transaction, which is expected to occur by the end of Q1 2019.

The Seven Energy Transaction

The Seven Assets comprise interests in the cash flow generative Uquo and Stubb Creek oil and gas fields, and an interest in the Accugas midstream business in South East Nigeria. Details of the Transaction are set out in the Admission Document, and amendments and updates thereto have been detailed in the Company's RNS announcements of 21 December 2018, 11 October 2018 and 20 September 2018.

The Directors believe that the acquisition of the Seven Assets is an attractive proposition for the following reasons:

   --      the Enlarged Group will have a substantial producing asset base, acquired at low cost; 

-- the Enlarged Group is expected to generate significant, high quality cash flows with material upside;

-- the acquisition complements Savannah's existing exploration and development portfolio in Niger and offers geographical diversification;

-- the Enlarged Group's combined business should provide a strong platform for future Nigerian growth; and

   --      the Enlarged Group will have a significantly enhanced corporate profile. 

The Company continues to expect that completion of the Transaction will occur on or before 31 March 2019.

Share Issues

On completion of the Transaction, and as further detailed in the Admission Document, the Company has agreed, inter alia, to:

-- in consideration for Savannah Petroleum (Stubb Creek) Limited's acquisition of 62.5 per cent of the share capital of Universal, issue such number of Ordinary Shares with a value equal to US$5 million to SEPL (the "Universal Shares");

-- in partial consideration for Savannah Petroleum (Stubb Creek) Limited's acquisition of the entire issued share capital of Stubb Creek HoldCo Limited, issue such number of Ordinary Shares with a value equal to US$4.2 million to SEPL (the "Stubb Creek Shares"); and

-- issue new Ordinary Shares with a value of US$27.7 million to certain holders of the SSNs and certain parties that have agreed to underwrite the issue of certain of those Ordinary Shares (the "New Money Shares");

together, the "Consideration Shares".

Both the Universal Shares and the Stubb Creek Shares will be subsequently transferred to Vitol Energy (Bermuda) Limited as lender under Seven Energy's Second Bilateral Facility Agreement.

The Directors do not currently have sufficient authorities in place to issue the Consideration Shares. Therefore, the Directors are seeking at the General Meeting authority to allot new Ordinary Shares on a non pre-emptive basis up to an aggregate nominal value of GBP140,000 to enable the Company to issue the Consideration Shares on Completion.

The Resolutions

The following resolutions will be proposed at the General Meeting:

-- Resolution 1: subject to the passing of Resolution 2, an ordinary resolution to authorise the Directors to allot the Consideration Shares.

-- Resolution 2: subject to the passing of Resolution 1, a special resolution to dis-apply statutory pre-emption rights in relation to the allotment of the Consideration Shares.

-- Resolution 3: subject to the passing of Resolution 4, an ordinary resolution to authorise the Directors to allot up to a further 100,000,000 new Ordinary Shares (which will represent approximately 10 per cent. of the maximum enlarged issued share capital of the Company following the issue of the Consideration Shares) going forward.

-- Resolution 4: subject to the passing of Resolution 3, a special resolution to dis-apply statutory pre-emption rights in relation to the allotment of the new Ordinary Shares referred to in Resolution 3.

If Resolutions 1 and 2 are not passed, the Transaction will not proceed on its current terms. In the event Resolutions 1 and 2 are not passed, there can be no guarantee that suitable amended terms for the Transaction will be agreed on a timetable which would allow the Transaction to proceed.

Shareholders are therefore strongly encouraged to vote in favour of all Resolutions.

Recommendation

Given that the issue of the Consideration Shares is critical to completion of the Transaction and will only be possible if Shareholders vote in favour of Resolutions 1 and 2 (as explained above), Shareholders are strongly urged to vote in favour of the Resolutions.

The Directors consider the passing of the Resolutions to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that all Shareholders vote in favour of the Resolutions, as they intend to do, or procure to be done, in respect of their own beneficial shareholdings, being at the Latest Practicable Date, in aggregate, 32,282,840 Ordinary Shares, representing approximately 3.67 per cent. of the Existing Issued Ordinary Share Capital.

 
 For further information contact: 
 Savannah Petroleum                    [phone] 
 Andrew Knott, CEO 
 Isatou Semega-Janneh, CFO 
 Jessica Ross, VP Corporate Affairs 
 
 Strand Hanson (Nominated Adviser)     [phone] 
 Rory Murphy 
 James Spinney 
 Ritchie Balmer 
 
 Mirabaud (Joint Broker)               [phone] 
 Peter Krens 
 Ed Haig-Thomas 
 
 Hannam & Partners (Joint Broker)      [phone] 
 Neil Passmore 
  Alejandro Demichelis 
 Hamish Clegg 
 
 Celicourt Communications              [phone] 
 Mark Antelme 
 Jimmy Lea 
  Ollie Mills 
 

The information contained within this announcement is considered to be inside information prior to its

release, as defined in Article 7 of the Market Abuse Regulation No.596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

Notes to Editors:

About Savannah Petroleum

Savannah Petroleum PLC is an AIM listed oil and gas company with exploration and production assets in Niger and Nigeria. Savannah's flagship assets include the R1/R2 and R3/R4 PSCs, which cover c.50% of the highly prospective Agadem Rift Basin ("ARB") of South East Niger, acquired in 2014/15. The Company is in the process of acquiring interests in the cash flow generative Uquo and Stubb Creek oil and gas fields and an interest in the Accugas midstream business in South East Nigeria from Seven Energy.

Further information on Savannah Petroleum PLC can be found on the Company's website: http://www.savannah-petroleum.com/en/index.php

Definitions

The following definitions apply in the Circular and this announcement, unless the context otherwise requires:

 
 "Act"                               the Companies Act 2006 (as amended) 
 "Admission Document"                the Company's admission document 
                                      dated 22 December 2017 
 "AIM"                               the market of that name operated 
                                      by London Stock Exchange plc 
 "AIM Rules"                         the rules for AIM companies and 
                                      their AIM advisers, as published 
                                      from time to time by the London 
                                      Stock Exchange in relation to AIM 
                                      traded securities 
 "Completion"                        completion of the Transaction 
 "Company" or "Savannah Petroleum"   Savannah Petroleum PLC, registered 
                                      in England and Wales with company 
                                      number 09115262 
 "Consideration Shares"              means the Universal Shares, the 
                                      Stubb Creek Shares, and the New 
                                      Money Shares 
 "CREST"                             the computerised settlement system 

                                      (as def ined in the CREST Regulations) 
                                      operated by Euroclear which facilitates 
                                      the transfer of title to shares 
                                      in uncertificated form 
 "CREST Regulations"                 the Uncertificated Securities Regulations 
                                      2001 (SI 2001/3755) including any 
                                      enactment or subordinate legislation 
                                      which amends or supersedes those 
                                      regulations and any applicable 
                                      rules made under those regulations 
                                      or any such enactment or subordinate 
                                      legislation for the time being 
                                      in force 
 "Directors" or "Board"              all of the directors of the Company 
 "Enlarged Group"                    the Company and its subsidiaries 
                                      immediately following Completion 
 "Existing Group"                    the Company and its subsidiaries 
                                      prior to Completion; 
 "Existing Issued Ordinary           the 879,769,427 Ordinary Shares 
  Share Capital                       in issue as at the date of the 
                                      Circular and this announcement 
 "Form of Proxy"                     the form of proxy accompanying 
                                      the Circular for use by Shareholders 
                                      in connection with the General 
                                      Meeting 
 "FSMA"                              the Financial Services and Markets 
                                      Act 2000 of the UK (as amended), 
                                      including any regulations made 
                                      pursuant thereto 
 "General Meeting" or "GM"           the general meeting of the Shareholders 
                                      of the Company called pursuant 
                                      to the notice of General Meeting 
                                      set out at the end of the Circular 
                                      at which the Resolutions will be 
                                      proposed 
 "Latest Practicable Date"           close of business (5.00 p.m. London 
                                      time) on 25 February 2019, being 
                                      the latest practicable date prior 
                                      to the publication of the Circular 
 "London Stock Exchange"             London Stock Exchange PLC 
 "Ordinary Shares"                   the ordinary shares of GBP0.001 
                                      each in the capital of the Company 
 "Resolutions"                       the resolutions set out in the 
                                      notice of General Meeting (and 
                                      also set out in the Circular and 
                                      this announcement) and which are 
                                      to be proposed as ordinary and 
                                      special resolutions (as indicated) 
 "Second Bilateral Facility"         the facility agreement dated 26 
                                      June 2015 between, inter alia, 
                                      SEFL and Seven Energy Ltd. (as 
                                      borrowers) and The Law Debenture 
                                      Trust Corporation P.L.C. (as Security 
                                      Agent) 
 "SEFL"                              Seven Energy Finance Limited, a 
                                      company incorporated in the British 
                                      Virgin Islands with registered 
                                      number 1811786, whose registered 
                                      office is at 9 Columbus Centre, 
                                      Pelican Drive, P.O Box 805, Road 
                                      Town Tortola VG1110 
 "SEPL"                              Seven Exploration & Production 
                                      Limited, previously known as Septa 
                                      Energy Nigeria Limited, a company 
                                      incorporated in Nigeria with registered 
                                      number 674420, whose registered 
                                      office is at 35 Kofo Aboyomi Street, 
                                      Victoria Island, Lagos, Nigeria 
 "Seven"                             Seven Energy International Limited, 
                                      a company incorporated in Mauritius 
                                      with registered number 65304 C2/GBL, 
                                      whose registered office is at c/o 
                                      International Management (Mauritius) 
                                      Ltd, Les Cascades Building, Edith 
                                      Cavel Street, Port-Louis, Mauritius 
 "Seven Assets"                      the oil and gas assets to be acquired 
                                      by the Company from Seven, as more 
                                      particularly described in the Admission 
                                      Document and the Company's RNS' 
                                      of 21 December 2018, 11 October 
                                      2018 and 20 September 2018 
 "Seven Energy Creditor Group        the holders of the outstanding 
                                      debt in Seven Energy, as more particularly 
                                      described in Part 2 of the Admission 
                                      Document 
 "Shareholders"                      the holders of Ordinary Shares 
                                      from time to time 
 "Share Options"                     options to subscribe for new ordinary 
                                      shares 
 "SSNs"                              10.25% per cent. senior secured 
                                      notes due 2021 issued by SEFL 
 "Transaction"                       the Company's proposed acquisition 
                                      of the Seven Assets 
 "UK"                                the United Kingdom of Great Britain 
                                      and Northern Ireland 
 "Universal"                         Universal Energy Resources Limited, 
                                      a company incorporated under the 
                                      laws of the Federal Republic of 
                                      Nigeria with registered number 
                                      429120, whose registered office 
                                      is at 25 Idoro Road, Uyo, Akwa 
                                      Ibom State, Nigeria 
 "U.S." or "United States"           the United States of America, its 
                                      territories and possessions, any 
                                      states of the United States of 
                                      America and the district of Columbia 
                                      and all other areas subject to 
                                      its jurisdiction 
 

References to "GBP", "pence" and "p" are to British pounds and pence sterling, the currency of the United Kingdom.

References to "US$" and "dollars" are to American dollars, the currency of the United States of America. References to times are, unless specified otherwise, references to London time.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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February 26, 2019 11:30 ET (16:30 GMT)