🕐25.10.12 - 17:54 Uhr
PETRONEFT - SHARE PLACING AND CORPORATE UPDATE
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA,
AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN.
PetroNeft Resources plc ("PetroNeft" or the "Company")
US$17.25 million Placing
Corporate Update
PetroNeft (AIM: PTR), the owner and operator of Licences 61 and 67, Tomsk Oblast,
Russian Federation, is pleased to announce a conditional placing raising gross proceeds
of approximately US$17.25 million together with a corporate update.
Highlights:
* Gross proceeds of US$17.25 million raised at STG0.05 per share in a placing
with institutional and other investors
* US$7.5 million will be used in part repayment of the Macquarie Bank Limited
("Macquarie") loan facility with the balance to be used to finance the continuation
of the 2012-2013 Arbuzovskoye development programme, working capital and
transaction costs
* Macquarie borrowing base facilityamended
* US$1 million of remaining facility to be converted into equity by Macquarie
to retain its pre-placing shareholding
Placing
PetroNeft has agreed the terms of a conditional placing of 216,052,348new Ordinary
Shares at Stg0.05(?0.06) per Ordinary Share (the "Placing Shares"), raising gross
proceeds of approximately US$17.25million (the "Placing").
The Placing is being executed in two tranches and has been arranged by Davy and
Canaccord Genuity.
The first tranche of the Placing consists of a conditional placing
of 41,635,643Ordinary Shares (the First Tranche Placing Shares") which is conditional,
inter alia, on admission of such Ordinary Shares to trading on the AIM Market of
the London Stock Exchange ("AIM") and the ESM Market of the Irish Stock Exchange
("ESM").
The second tranche of the Placing (the "Second Tranche Placing") consists
of a conditional placing of 174,416,705 Ordinary Shares (the Second Tranche Placing
Shares") which is conditional, inter alia, on admission of such Ordinary Shares
to trading on AIM and ESM and upon receiving shareholder approval at an extraordinary
general meeting of the Company to be held on 19November 2012 ("EGM").
A circular
to convene the EGM will be sent to shareholders shortly.
US$7.5 million will be used in part repayment of the existing Macquarie loan facility
with the balance to be used to finance the continuation of the 2012-2013 Arbuzovskoye
development programme, working capital and transaction costs.
Directors and Management participation in the Placing
Certain Directors and management of PetroNeft will subscribe for the following Placing
Shares:
Directors:
Placing Shares subscribed for
Resulting holding of Ordinary Shares
% of Enlarged Share Capital
Dennis Francis
1,000,000
23,760,416
3.68%
Paul Dowling
400,000
731,583
0.11%
Tom Hickey
400,000
2,226,283
0.35%
Senior management:
Karl Johnson
400,000
932,349
0.14%
Licence 61 - Arbuzovskoye Development Programme
As announced on 22 October 2012, Arbuzovskoye well 102, the second of ten planned
new production wells on the Arbuzovskoye oil field, was successfully completed and
brought into production at an initial rate of 540 bopd with less than 2% water cut.
This production rate was well above the Companys target rate and further confirms
the excellent continuity and good reservoir properties in the eastern portion of
the Arbuzovskoye field.
Development will continue with a further eight new production wells planned for
the current development programme.
Arbuzovskoye well 109, the next well in the drilling
sequence, is currently drilling ahead.
It is anticipated that the completion of
development programme will be funded from operating cashflows and a portion of the
proceeds of the Placing.
Arbuzovskoye contains 2P reserves in excess of 13 million barrels of oil according
to independent reserve auditors Ryder Scott and is the Companys second production
development.
Macquarie Debt Facility
The Company and Macquarie have agreed to amend the Companys existing US$30 million
borrowing base loan facility.
The amendments to the facility include the repayment
of US$7.5 million from the proceeds of the Placing, the repayment of a further US$9.1
million in fourteen monthly instalments ($650,000 per month) beginning on 31 March
2013 and the conversion of US$1 million of debt into equity in the Company at the
placing price of STG0.05 per share (the "Macquarie Shares").In addition, production
covenants will be removed and Macquarie will waive the right to seek additional
repayments of the outstanding balance at the next three reviews which were due to
take place on 31 December 2012, 30 June 2013 and 31 December 2013.
Macquarie will
continue to hold US$4 million in a Debt Service Reserve Account ("DSRA") until the
maturity of the loan.
The final outstanding balance of US$12.4 million (US$8.4 million
net of the DSRA) will be repaid in a lump sum at the maturity of the facility in
May 2014.
These proposed amendments and the conversion are subject to, amongst
other things, the preparation and execution of formal documentation, and the completion
of the Placing.
The amended facility will be subject to certain financial covenants
and lenders approvals for the application of certain funds typical of a facility
of this nature.
In May 2012 PetroNeft entered into a three year loan facility for US$15 million
with its partner Arawak Energy.
This loan facility will be unaffected by the above
amendments.
Corporate Development
Positioning the Company so that it can fully exploit the opportunities available
to it is of crucial importance.
To this end, the Company continues in active discussions
with a number of parties about possible farm-outs which in the long term should
strengthen the Companys financial position and position the company to extract
value from its reserve base and to pursue opportunities.
Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented:
"We are pleased with the outcome of the Placing and the high level of support received
from both new and existing institutional shareholders.
The combination of the results
of recent Arbuzovskoye wells and stable financing base will allow management to
continue to focus on materially increasing our production profile and cash flows,
substantially increase the value of our reserve base and focus on the numerous corporate
development opportunities available to us."
Application will be made to the London Stock Exchange and the Irish Stock Exchange
for the First Tranche Placing Shares to be admitted to trading on AIM and ESM, with
Admission of the First Tranche Placing Shares expected to occur on 30 October 2012.
Application will also be made for the Admission of the Second Tranche Placing Shares
and the Macquarie Shares to trading on AIM and ESM, with admission of the Second
Tranche Placing Shares and the Macquarie Shares expected on 20 November 2012, subject
to the approval of the Second Tranche Placing by the Companys shareholders at the
EGM.
The Placing Shares will, when issued, rank pari passu in all respects with
the existing Ordinary Shares including the right to receive dividends and other
distributions declared following Admission.
For further information, contact:
Dennis Francis, CEO, PetroNeft Resources plc
+353 1 443 3720
Paul Dowling, CFO, PetroNeft Resources plc
+353 1 443 3720
John Frain/Brian Garrahy, Davy (NOMAD and Joint Broker)
+353 1 679 6363
Henry Fitzgerald-OConnor/Tim Redfern, Canaccord Genuity Limited (Joint Broker)
+44 207 523 8000
Martin Jackson, Citigate Dewe Rogerson
+44 207 638 9571
Joe Murray/Ed Micheau, Murray Consultants
+353 1 498 0300
The information contained in this announcement has been reviewed and verified by
Mr.
Dennis Francis, Director and Chief Executive Officer of PetroNeft, for the
purposes of the Guidance Note for Mining, Oil and Gas Companies issued by the London
Stock Exchange in March 2006.
Mr.
Francis holds a B.S.
Degree in Geophysical Engineering
and a M.S.
Degree in Geology from the Colorado School of Mines.
He has also graduated
from the Harvard University Program for Management Development.
He is a member of
the American Association of Petroleum Geologists and the Society of Exploration
Geophysicists.
He has over 35 years experience in oil and gas exploration and development.
Forward Looking Statements
This announcement contains forward-looking statements.
These statements relate to
the Companys future prospects, developments and business strategies.
Forward-looking
statements are identified by their use of terms and phrases such as believe, could,
envisage, potential, estimate, expect, may, will or the negative of
those, variations or comparable expressions, including references to assumptions.
The forward-looking statements in this announcement are based on current expectations
and are subject to risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by those statements.
These forward-looking
statements speak only as at the date of this announcement.
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