EUROPA OIL & GAS (HOLDINGS) PLC
6 July 2015
NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION IN OR INTO THE UNITED STATES OF
AMERICA, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN
Europa Oil & Gas (Holdings) plc
Firm Placing, Conditional Placing and Open Offer
and
Notice of General Meeting
Europa is pleased to announce that it has raised total gross proceeds of
approximately £1.4 million by the issue of 20,000,000 New Ordinary Shares
pursuant to the Firm Placing and 2,630,000 New Ordinary Shares pursuant to the
Conditional Placing at an issue price of 6 pence per New Ordinary Share.
Furthermore, it proposes to raise up to a further £2.0 million by the issue of
up to a further 34,147,170 New Ordinary Shares pursuant to the Open Offer at an
issue price of 6 pence per New Ordinary Share.
Highlights:
* Firm Placing and Conditional Placing to new and existing institutional
investors to raise gross proceeds of £1.4 million.
* Open Offer to Qualifying Shareholders to raise gross proceeds of up to a
further £2.0 million
* Directors have undertaken to make applications to subscribe, in aggregate,
for 449,332 Open Offer Shares to raise £26,960.
* The Fundraising is being undertaken to provide requisite financing for
Europa's near-term work programme, including:
+ funding the Company's contribution to expected startup costs of
production at its new discovery, Wressle;
+ seismic acquisition activities on any licences awarded to Europa in the
14th UK onshore licensing round; and
+ funding for Europa's 15 per cent. equity share of general and
administration costs on its Irish Atlantic Margin licences in the
Porcupine Basin.
* The Company has received advanced assurance from HMRC that the Firm Placing
Shares, the Conditional Placing Shares and the Open Offer Shares will
satisfy the requirements for tax relief under EIS and VCT Schemes.
* A Circular to Shareholders in respect of the Conditional Placing and the
Open Offer is expected to be posted later today giving notice of a general
meeting of the Company to be held on 23 July 2015 at 10.00 a.m. at the
offices of finnCap Ltd, 60 New Broad Street, London EC2M 1JJ. A copy of the
Circular will be available on the Company's website www.europaoil.com.
Europa's CEO Hugh Mackay said:
"We are pleased at the support from existing and new institutional investors in
the Firm and Conditional Placing and we are also providing all existing
Qualifying Shareholders with an opportunity to participate in the Open Offer at
the same issue price offered to the institutions. We are seeking to grow our
licence holdings in onshore UK and offshore Ireland and the funds raised will
enable Europa to undertake new exploration investment as well as funding work
on existing projects such as the Wressle oil and gas discovery in PEDL 180. We
look forward to the coming months with excitement and confidence."
Further information
The Conditional Placing is conditional upon, inter alia, the Company obtaining
approval from its Shareholders to grant the Board authority to allot the
Conditional Placing Shares and to disapply statutory pre-emption rights which
would otherwise apply to the allotment of the Conditional Placing Shares.
Accordingly, a General Meeting is being convened for the purpose of considering
Resolutions which, inter alia, will give the Directors the necessary
authorities to allot the Conditional Placing Shares.
The Board is mindful of and grateful for the continuing support received from
Shareholders, and accordingly is offering Qualifying Shareholders the
opportunity to participate in the Fundraising by way of the Open Offer to issue
up to 34,147,170 New Ordinary Shares to Qualifying Shareholders. A Circular to
Shareholders, setting out full details of the Open Offer and the actions to be
taken by Qualifying Shareholders in respect of the Open Offer, is expected to
be published later today. The Open Offer is not being underwritten and is not
conditional on the Placings.
Qualifying Shareholders subscribing for their full Basic Entitlement under the
Open Offer will also be able to request additional Open Offer Shares in
accordance with the Excess Entitlement, up to the total number of Open Offer
Shares available to Qualifying Shareholders pursuant to the Open Offer.
The Board considers the Fundraising to be in the best interests of the Company
and Shareholders as a whole, and certain Directors intend to make applications
to subscribe for in aggregate 449,332 Open Offer Shares, including Excess
Entitlements, in the Open Offer in respect of their Ordinary Shares in the
Company. The Directors also unanimously recommend Shareholders to vote in
favour of the Resolutions, as they will do in respect of their Ordinary Shares
in the Company, representing 14 per cent. of the Existing Ordinary Shares.
Application has been made to the London Stock Exchange for 20,000,000 Ordinary
Shares arising from the Firm Placing to be admitted to trading on AIM. It is
expected that Admission of the Firm Placing Shares will occur at 8.00 a.m. on
10 July 2015.
Application has also been made to the London Stock Exchange for 2,630,000
Ordinary Shares arising from the Conditional Placing and up to 34,147,170
Ordinary Shares arising from the Open Offer to be admitted to trading on AIM.
It is expected that Admission of the Conditional Placing Shares and the Open
Offer Shares will occur at 8.00 a.m. on 24 July 2015.
Enquiries:
For further information please visit www.europaoil.com or contact:
Hugh Mackay Europa + 44 (0) 20 7224 3770
Phil Greenhalgh Europa + 44 (0) 20 7224 3770
Matt Goode finnCap Ltd +44 (0) 20 7220 0500
Simon Hicks finnCap Ltd +44 (0) 20 7220 0500
Frank Buhagiar St Brides Partners Ltd +44 (0) 20 7236 1177
Lottie Brocklehurst St Brides Partners Ltd +44 (0) 20 7236 1177
Unless otherwise defined herein, capitalised terms used in this announcement
shall have the same meanings as defined in the Circular.
Important Information
Neither the content of the Company's website (or any other website) nor any
website accessible by hyperlinks on the Company's website (or any other
website) is incorporated in, or forms part of, this announcement.
Any person receiving this announcement is advised to exercise caution in
relation to the Placing and the Open Offer. If in any doubt about any of the
contents of this announcement or the action that you should take, independent
professional advice should be obtained.
finnCap Ltd, which is authorised and regulated in the United Kingdom by the
FCA, is acting as nominated adviser and broker to the Company in connection
with the Placings and the Open Offer and is not acting for any other persons in
relation to the Placings and Open Offer. finnCap Ltd is retained by the Company
in connection with the Placings and Open Offer and shall not be responsible to
any other party for providing advice or taking any other action in relation to
the Placings and Open Offer. Persons receiving this announcement should note
that finnCap Ltd will not be responsible to anyone other than the Company for
providing the protections afforded to clients of finnCap Ltd or for advising
any other person on the arrangements described in this announcement. finnCap
Ltd has not authorised the contents of, or any part of, this announcement and
no liability whatsoever is accepted by finnCap Ltd nor does it make any
representation or warranty, express or implied, for the accuracy of any
information or opinion contained in this announcement or for the omission of
any information. finnCap Ltd disclaims all and any responsibility or liability
whether arising in tort, contract or otherwise which it might otherwise have in
respect of this announcement. finnCap Ltd may, in accordance with applicable
legal and regulatory provisions, engage in transactions in relation to the
Ordinary Shares (including the Placing Shares and the Open Offer Shares) and/or
related instruments for its own account for the purposes of hedging any
underwriting exposure or otherwise. Except as required by applicable law or
regulation, finnCap Ltd does not propose to make any public disclosure in
relation to any such transactions.
This announcement does not constitute an offer to sell or an invitation to
subscribe for, or solicitation of an offer to subscribe for or buy New Ordinary
Shares to any person in any jurisdiction to whom it is unlawful to make such
offer or solicitation. In particular, this announcement must not be taken,
transmitted, distributed or sent, directly or indirectly, in, or into, and Open
Offer Entitlements may not be transferred through CREST, in or into, the United
States of America, Canada, Australia, Japan or the Republic of South Africa or
transmitted, distributed or sent to, or by, any national, resident or citizen
of such countries. Accordingly, the New Ordinary Shares and/or Open Offer
Entitlements may not, subject to certain exceptions, be offered or sold,
directly or indirectly, in, or into, or credited to the stock account of any
person in the United States of America, Canada, Australia, Japan or the
Republic of South Africa or in any other country, territory or possession where
to do so may contravene local securities laws or regulations. The New Ordinary
Shares and the Open Offer Entitlements have not been, and will not be,
registered under the United States Securities Act of 1933 (as amended) or under
the securities legislation of any state of the United States of America, any
province or territory of Canada, Australia, Japan or the Republic of South
Africa and they may not be offered or sold, directly or indirectly, within the
United States of America or Canada, Australia, Japan or the Republic of South
Africa or to or for the account or benefit of any national, citizen or resident
of the United States of America, Canada, Australia, Japan or the Republic of
South Africa or to any US person (within the definition of Regulation S made
under the US Securities Act 1933 (as amended)).
Forward-looking statements
This announcement contains (or may contain) certain forward-looking statements
with respect to the Company and certain of its goals and expectations relating
to its future financial condition and performance which involve a number of
risks and uncertainties. No forward-looking statement is a guarantee of future
performance and actual results could differ materially from those contained in
any forward-looking statements. All statements, other than statements of
historical facts, contained in this announcement, including statements
regarding the Group's future financial position, business strategy and plans,
business model and approach and objectives of management for future operations,
are forward-looking statements. Generally, the forward-looking statements in
this announcement use words such as "aim", "anticipate", "target", "expect",
"estimate", "plan", "goal", "believe", "will", "may", "could", "should",
"future", "intend", "opportunity, "potential", "project", "seek" and other
words having a similar meaning. By their nature, forward-looking statements
involve risk and uncertainty because they relate to future events and
circumstances, including, but not limited to, economic and business conditions,
the effects of changes in interest rates and foreign exchange rates, changes in
legislation, changes in consumer habits and other factors outside the control
of the Company, that may cause actual results, performance or achievements to
be materially different from any results, performance or achievements expressed
or implied by such forward-looking statements. All forward-looking statements
contained in this announcement are based upon information available to the
Directors at the date of this announcement. The forward-looking statements in
this announcement are based on the Directors' beliefs and assumptions and
information only as of the date of this announcement, and the forward-looking
events discussed in this announcement might not occur. Therefore, investors
should not place any reliance on any forward-looking statements. Except as
required by law or regulation, the Directors undertake no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Investors are advised to read this announcement and, once available, the
Circular, in their entirety for a further discussion of the factors that could
affect the Company's or the Group's future performance and the industries in
which they operate. In light of these risks, uncertainties and assumptions, the
events described in the forward-looking statements in this announcement may not
occur.
This summary should be read in conjunction with the full text of the
announcement which follows.
SHARE CAPITAL, FIRM PLACING, CONDITIONAL PLACING AND OPEN OFFER STATISTICS
Issue Price 6 pence
Number of Existing Ordinary Shares in issue 204,883,024
Number of Firm Placing Shares to be issued pursuant to 20,000,000
the Firm Placing
Number of Conditional Placing Shares to be issued 2,630,000
pursuant to the Conditional Placing
Number of Open Offer Shares to be issued pursuant to 34,147,170
the Open Offer*
Aggregate number of New Ordinary Shares to be issued 56,777,170
pursuant to the Fundraising*
New Ordinary Shares as a percentage of the Enlarged 21.70 per cent.
Share Capital of the Company following the Fundraising*
Number of Ordinary Shares in issue following the 261,660,194
Fundraising*
Estimated gross proceeds of the Placings* £1.4 million
Estimated gross proceeds of the Open Offer* £2.0 million
Estimated gross proceeds of the Fundraising* £3.4 million
*Assuming full take up of the Open Offer Shares
Introduction
Europa has conditionally raised £1.2 million by the issue of 20,000,000 New
Ordinary Shares pursuant to the Firm Placing and a further £0.2 million by the
issue of a further 2,630,000 New Ordinary Shares pursuant to the Conditional
Placing. The Company also proposes to raise up to a further £2.0 million by the
issue of up to 34,147,170 New Ordinary Shares pursuant to the Open Offer,
giving a total gross Fundraising of up to approximately £3.4 million.
The Fundraising has been undertaken to provide funding for Europa's near-term
work programme and projects. In particular, the net proceeds of the Placings
will be used to fund the Company's contribution to expected startup of
production at its new discovery, Wressle, to fund seismic acquisition
activities on any licences awarded to Europa in the 14th UK onshore licensing
round and for Europa's 15 per cent. equity share of the general and
administration costs on its existing licences in the Porcupine Basin.
The Board is grateful for the continuing support received from all
Shareholders, and accordingly wishes to offer Shareholders the opportunity to
participate in the Fundraising by launching the Open Offer, whereby the Company
proposes to issue up to 34,147,170 further New Ordinary Shares to Qualifying
Shareholders at the Issue Price. The net proceeds of the Open Offer will
provide further funding for the Company's work programme, as well as additional
funds for progressing a range of other projects and activities.
The Issue Price of 6 pence per New Ordinary Share represents a discount of 23.8
per cent. to the closing middle market price of 7.875 pence per Existing
Ordinary Share on 3 July 2015, being the last Business Day before the
announcement of the Fundraising.
Qualifying Shareholders may subscribe for Open Offer Shares on the basis of 1
Open Offer Share for every 6 Existing Ordinary Shares held on the Record Date.
Shareholders subscribing for their full entitlement under the Open Offer may
also request additional New Ordinary Shares as an Excess Entitlement, up to the
total number of Open Offer Shares available to Qualifying Shareholders under
the Open Offer. Further details on the background to and the reasons for the
Fundraising are provided below.
The Firm Placing Shares have been allotted by the Board under existing
authorities to issue New Ordinary Shares and Admission to trading on AIM is
expected to take place at 8.00 a.m. on 10 July 2015.
The Conditional Placing is conditional, amongst other things, on the passing of
Resolution 1 by Shareholders at the General Meeting. The Open Offer Shares will
be allotted by the Board under existing authorities to issue New Ordinary
Shares.
Admission of the Conditional Placing Shares and Open Offer Shares is expected
to occur no later than 8.00 a.m. on 24 July 2015 or such later time(s) and/or
date(s) as finnCap and the Company may agree. Neither the Conditional Placing
nor the Offer have been underwritten.
Background to and reasons for the Fundraising
As a consequence of its achievements over the last 12 months, Europa has a
requirement for additional funding. In Q3 2014 the Company discovered
hydrocarbons with the Wressle exploration well in onshore UK. In Q1 2015 the
Wressle exploration well flowed oil and gas during production testing
operations and the Company is currently engaged in an extended well test of
Wressle. Europa therefore has a requirement to raise additional funding to
support its share of the capital expenditure expected to be required to take
the Wressle discovery into production.
In addition, Europa is seeking to build upon its exploration position onshore
UK and the Company has applied for three licences in the 14th UK onshore
licensing round. The 14th Round closed in October 2014 and it is anticipated
that awards will be made in H2 2015. Europa therefore requires further funding
for exploration expenditure on any 14th Round awards made which may include
seismic data acquisition and drilling preparation.
Europa has built strong technical expertise in the Porcupine Basin, offshore
Ireland, and has recently released information from a Competent Persons Report
("CPR") completed by ERC Equipoise Ltd ("ERCE") on Irish Atlantic Margin
Licence FEL 3/13. The CPR details total gross un-risked mean Prospective
Resources of approximately 1.49 billion barrels of oil equivalent ("bboe") on
FEL 3/13 and 224 million barrels of oil equivalent ("mmboe") to Europa on a net
basis. Europa also commissioned ERCE to complete an independent assessment of
its interests in FEL 3/13. The results of the study estimate a mean Un-risked
Net Present Value ("NPV") of approximately US$1.6 billion to Europa's 15 per
cent. Net interest in three prospects; Wilde, Beckett and Shaw in FEL 3/13, and
a mean Risked NPV of US$251 million to Europa's 15 per cent. Net interest in
the three prospects. Europa is seeking to build its position offshore Ireland
and will apply for multiple licences in the 2015 Atlantic Margin Licensing
Round that closes in September 2015. The Fundraising will therefore strengthen
the Company's balance sheet and enhance the financial capability component of
Europa's applications.
Details of the Fundraising and use of proceeds
The Company is proposing to raise up to approximately £3.4 million (before
expenses) pursuant to the Firm Placing, the Conditional Placing and the Open
Offer at the Issue Price of 6 pence per New Ordinary Share. The Issue Price
represents a discount of 23.8 per cent. to the closing price of an Ordinary
Share of 7.875 pence on 3 July 2015 (being the latest practicable date prior to
the announcement of the Fundraising).
In setting the Issue Price, the Directors have considered the price at which
the New Ordinary Shares need to be offered to investors to ensure the success
of the Fundraising and have held discussions with a number of key institutional
investors who have agreed to subscribe for the New Ordinary Shares at that
price. In structuring the Fundraising, the Directors have had regard, among
other things, to the current market conditions, the level of the Company's
share price and the importance of pre-emption rights to Shareholders. After
considering these factors, the Directors have concluded that the Firm Placing,
Conditional Placing and the Open Offer is the most suitable option available to
the Company and its Shareholders. The Open Offer component of the fundraising
provides an opportunity for all Qualifying Shareholders to participate by
subscribing for Open Offer Shares pro rata to their current holding of Ordinary
Shares and to have the opportunity to request Ordinary Shares in excess of
their pro-rata holding by making an Excess Application.
Pursuant to the Firm Placing, 20,000,000 New Ordinary Shares have been issued
to investors at the Issue Price. 2,630,000 New Ordinary Shares have been
conditionally placed pursuant to the Conditional Placing with certain
institutional investors, including existing Shareholders, subject to the
passing of Resolution 1 at the General Meeting. The Firm Placing and the
Conditional Placing are to be effected pursuant to a Placing Agreement and a
Placing and Open Offer Agreement, respectively.
Use of proceeds of Firm Placing and Conditional £ million
Placing
Wressle production capex 0.5
14th round seismic acquisition 0.5
Ireland general and administration costs 0.35
Total 1.35
It is anticipated that £0.5 million of the proceeds of the Placings will be
required for capital expenditure in support of Wressle production operations.
Europa has bid for 3 licences in the 14th UK onshore licensing round and in all
success cases will require to initiate seismic acquisition activities, and
hence it is anticipated that £0.5m of the proceeds of the Placings will be used
for seismic data acquisition on any awards made in the 14th UK onshore
licensing round. Whilst Europa was carried on seismic acquisition and will be
carried on any drilling costs, its Irish Atlantic Margin licences in the
Porcupine Basin require some funding and hence approximately £0.35 million of
the proceeds of the Placings will be used for Europa's 15 per cent. equity
share of general and administration costs on its Irish Atlantic Margin
licences.
The net proceeds of the Open Offer will provide further funding for the
Company's work programme, as well as additional funds for progressing a range
of other projects and activities. In particular, the net Open Offer proceeds
will be used for further exploration expenditure in support of 14th UK onshore
licensing round awards, Ireland Atlantic Margin licensing round awards and
there are also a number of drilling candidates on existing licences for which
funds may be used in support of drilling preparation and operations.
The Board believes that the net proceeds of the Fundraising will be sufficient
to meet the Group's near-term work programme and working capital requirements.
The Board is, as always, mindful that unexpected events, including operational
outcomes or events outside the Board's control, may result in the proceeds of
the Fundraising being deployed in a differing manner to that set out above or
on a differing timescale to that currently envisaged.
Principal terms of the Open Offer
The Board is offering Qualifying Shareholders the opportunity to subscribe for
Open Offer Shares on a pre-emptive basis on the same terms as the Firm Placing
and the Conditional Placing by launching the Open Offer to issue up to
34,147,170 Open Offer Shares to Qualifying Shareholders at the Issue Price.
The Open Offer is conditional on, inter alia:
a. the Placing and Open Offer Agreement having become unconditional (save only
for any condition relating to Second Admission); and
b. Second Admission becoming effective by no later than 8.00 a.m. on 24 July
2015 or such later time and/or date (being no later than 5.00 p.m. on 15
August 2015) as finnCap and the Company may agree.
Qualifying Shareholders may subscribe for Open Offer Shares in proportion to
their holding of Existing Ordinary Shares held on the Record Date. Shareholders
subscribing for their full entitlement under the Open Offer may also request
additional Open Offer Shares as an Excess Entitlement, up to the total number
of Open Offer Shares available to Qualifying Shareholders under the Open Offer.
Basic Entitlement
On, and subject to the terms and conditions of the Open Offer, the Company
invites Qualifying Shareholders to apply for their Basic Entitlement of Open
Offer Shares at the Issue Price. Each Qualifying Shareholder's Basic
Entitlement has been calculated on the following basis:
1 Open Offer Share for every 6 Existing Ordinary Shares held at the Record
Date.
Basic Entitlements will be rounded down to the nearest whole number of Ordinary
Shares.
Excess Entitlement
Qualifying Shareholders are also invited to apply for additional Open Offer
Shares (up to the total number of Open Offer Shares available to Qualifying
Shareholders under the Open Offer) as an Excess Entitlement. Any Open Offer
Shares not issued to a Qualifying Shareholder pursuant to their Basic
Entitlement will be apportioned between those Qualifying Shareholders who have
applied for an Excess Entitlement at the sole discretion of the Board, provided
that no Qualifying Shareholder shall be required to subscribe for more Open
Offer Shares than he or she has specified on the Application Form or through
CREST.
Overseas Shareholders
The Open Offer Shares have not been and are not intended to be registered or
qualified for sale in any jurisdiction other than the United Kingdom and the
Qualifying Overseas Jurisdictions. Accordingly, unless otherwise determined by
the Company and effected by the Company in a lawful manner, the Application
Form will not be sent to Existing Shareholders with registered addresses in any
jurisdiction other than the United Kingdom or the Qualifying Overseas
Jurisdictions since to do so would require compliance with the relevant
securities laws of that jurisdiction. The Company reserves the right to treat
as invalid any application or purported application for Open Offer Shares which
appears to the Company or its agents or professional advisers to have been
executed, effected or despatched in a manner which may involve a breach of the
laws or regulations of any jurisdiction or if the Company or its agents or
professional advisers believe that the same may violate applicable legal or
regulatory requirements or if it provides an address for delivery of share
certificates for Open Offer Shares, or in the case of a credit of Open Offer
Shares in CREST, to a CREST member whose registered address would be not be in
the UK or one of the Qualifying Overseas Jurisdiction. Notwithstanding the
foregoing and any other provision of the Circular or the Application Form, the
Company reserves the right to permit any Qualifying Shareholder to apply for
Open Offer Shares if the Company, in their sole and absolute discretion, is
satisfied that the transaction in question is exempt from, or not subject to,
the legislation or regulations giving rise to the restrictions in question. The
Circular together with the accompanying Application Form, in the case of
Qualifying Non- CREST Shareholders, contains the terms and conditions of the
Open Offer. If a Qualifying Shareholder does not wish to apply for Open Offer
Shares he should not complete or return the Application Form or send a USE
message through CREST.
Directors' shareholdings
Certain Directors, being Hugh Mackay, Phil Greenhalgh, Colin Bousfield and
Roderick Corrie, have undertaken to make applications to participate in the
Open Offer and will make applications to subscribe for, in aggregate 449,332
Open Offer Shares, as detailed in the table below:
Director As at the date of this As at Second Admission
Announcement
Number of Number of Open Number of per cent. of
Ordinary Offer Shares Ordinary Shares Enlarged
Shares held subscribed for * Share
Capital**
Hugh Mackay 2,340,883 166,666 2,507,549 0.96
Phil Greenhalgh 437,640 83,333*** 520,973 0.20
Colin Bousfield 190,625 83,333*** 273,958 0.10
Roderick Corrie 425,820 116,000*** 541,820 0.21
* Assuming the application for Open Offer Shares is satisfied in full
** Assuming the Open Offer is fully subscribed and assuming no warrants
or options are exercised between the date of this announcement and Second
Admission
*** Includes Ordinary Shares to be applied for under the Excess
Entitlement facility
EIS/VCT Schemes
The Company has received confirmation of advance assurance from HMRC (dated 20
March 2015) that the Placing Shares and the Open Offer Shares are expected to
constitute a qualifying holding for VCT Schemes, and should also satisfy the
requirements for tax relief under the EIS. The Company has previously applied
for and received confirmation qualifying status under VCT Schemes and the EIS,
the most recent being in respect of the Ordinary Shares issued following the
open offer which closed on 17 January 2014. Shareholders should be mindful that
EIS and VCT qualification rules are subject to change and no guarantees or
assurance can be given in this regard.
General Meeting
The Board is seeking the approval of Shareholders at the General Meeting to
allot the Conditional Placing Shares, notice of which will be contained in the
Circular.
EUROPA OIL & GAS () : Placing and Open Offer
July 06, 2015 at 02:01 am EDT
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