REG - Beacon Energy PLC - Corporate Update

Beacon EnergyAnnouncement

28/11/2024 07:00

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RNS Number : 9379N  Beacon Energy PLC  28 November 2024

28 November 2024

Beacon Energy plc

("Beacon Energy" or the "Company")

Corporate Update

 

 

Beacon Energy (AIM:BCE), the full-cycle oil and gas company with a portfolio
of onshore German assets through its wholly-owned subsidiary, Rhein Petroleum
GmbH ("Rhein Petroleum"), provides the following corporate update.

 

·    Reservoir performance from the SCHB-2 well continues to disappoint
with current production of approximately 45 bopd, a decline of approximately
20% since the installation of a rod pump in early September 2024

 

·    Notwithstanding the material cost reduction initiatives previously
disclosed, production at these levels places doubt on the future financial
viability of Rhein Petroleum, absent material capital investment

 

·    As previously disclosed, Beacon Energy had put forward a fully
financed restructuring plan to the Rhein Petroleum creditors aimed at
maximising cash generation from the Rhein Petroleum business and delivering
value for creditors

 

·    Given the production declines seen at the SCHB-2 well, Beacon Energy
has been unable to put forward a restructuring offer which is agreeable to the
Rhein Petroleum creditors

 

·    The Company has now been informed by Rhein Petroleum's creditor
representative that it has agreed to sell certain assets of Rhein Petroleum to
a third party (with completion expected in early January 2025), following
which Rhein Petroleum would be expected to be liquidated (the "Proposed
Liquidation")

 

·    As previously disclosed, Beacon Energy has not provided any parent
company guarantees related to the debts of Rhein Petroleum (approximately
€7.5 million)

 

·    As a consequence of the Proposed Liquidation of Rhein Petroleum,
Beacon Energy is expected to become an AIM Rule 15 cash shell in early
January 2025

 

·    As a result of material cost reduction initiatives previously
announced and assuming the Proposed Liquidation proceeds as expected, the
Board believes it has sufficient liquidity to progress new business
development through to end Q2 2025

 

·    The Company's strategy continues to be the creation a self-funding
oil & gas production company taking advantage of growth opportunities
resulting from industry players as they reshape their portfolios

 

·    By concentrating on cash-generative assets and capitalising on the
current deal pipeline, the Company aims to lever the time and cost expended in
assessing potential new ventures over the last year built on the Board's
extensive industry relationships. The opportunities the Company is assessing
across Europe, Africa and the Far East are suitable for debt or vendor
financing, and the Company will continue its efforts to mature these options

 

·    The Board is presently in discussions on a range of opportunities and
is confident that it will enter into an agreement on at least one opportunity
before mid-year 2025

 

Stewart MacDonald, CEO of the Company, said:

"The performance of the SCHB-2 well continues to disappoint to the extent that
it calls into question the ongoing financial viability of Rhein Petroleum. We
are disappointed that agreement could not be reached with the creditors of
Rhein Petroleum and that their preferred course of action is a sale of certain
assets and the ultimate liquidation. Whilst Erfelden remains a potentially
material oil discovery, very significant capital will be required in order to
deliver its potential.

 

The ringfencing of Rhein Petroleum's liabilities ensures Beacon has no further
financial exposure to the subsidiary and can utilise remaining cash to
progress the compelling value accretive opportunities currently being assessed
by our experienced Board.

 

"Beacon Energy has an exciting set of opportunities in the business
development pipeline and a motivated and high-quality Board focused on growing
the Company and creating long term sustainable value for shareholders.
Reducing the cost base leaves the Company with sufficient cash, and
importantly allows more time, to assess and progress this pipeline. We will
provide further updates to the market as appropriate."

 

Enquiries:

 Beacon Energy plc                                          +44 (0)20 7466 5000

 Stewart MacDonald (CEO)
 Strand Hanson Limited (Financial and Nominated Adviser)    +44 (0)20 7409 3494

 Rory Murphy / James Bellman
                                                            +44 (0)20 7466 5000

 Buchanan (Public Relations)

 Ben Romney / Barry Archer / George Pope
                                                                 +44 (0)20 7186 9030

 Tennyson Securities Limited (Broker)

 Peter Krens

 

For further information, please visit  www.beaconenergyplc.com
(http://www.beaconenergyplc.com/)   and @BeaconEnergyPlc on X (formally
Twitter)

To register for Beacon Energy's email alerts, please complete the following
form:  https://www.beaconenergyplc.com/media-centre/news/#alerts
(https://www.beaconenergyplc.com/media-centre/news/#alerts)

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue
of the European Union (Withdrawal) Act 2018.

 

 

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