REG - Reabold Resources - Conditional Acquisition of Simwell Resources

Reabold ResourcesAnnouncement

28/09/2022 07:01

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RNS Number : 9036A  Reabold Resources PLC  28 September 2022

28 September 2022

 

Reabold Resources plc

 

("Reabold" or the "Company")

 

 

Conditional Acquisition of Simwell Resources Limited ("Transaction")

 

Reabold, the AIM quoted investing company with a portfolio of upstream oil and
gas projects, is pleased to announce the execution of a Sale and Purchase
Agreement ("SPA") for the conditional acquisition of Simwell Resources Limited
("Simwell").

 

Key Highlights:

·      Reabold is to acquire Simwell at a low acquisition cost with a
total initial consideration, plus the repayment of all outstanding
creditors/liabilities, of £1 million

·      The transaction substantially increases Reabold's footprint in
the emerging Zechstein trend, complementing its onshore position in PEDL183,
including the West Newton project

·      The licences have a number of prospects covered with high quality
3D seismic data

·      Licence P2332 has prospects to be derisked by success at the
Pensacola well

 

Transaction Details:

The SPA between the shareholders of Simwell ("Sellers") and Reabold provides
for the conditional sale of the entire issued share capital of Simwell to
Reabold. Concurrently, Reabold will settle the outstanding
creditors/liabilities of Simwell. Reabold has agreed to pay the following
amounts for the Transaction:

 

·      An initial consideration of £361,840.93 to the Sellers to be
satisfied by the issue of 134,105,159 new ordinary shares ("Ordinary Shares")
in the capital of the Company ("Initial Consideration Shares") at a price of
0.27 pence per share, being the closing price on the last practicable trading
day prior to signing of the SPA (the "Issue Price").

·      The sum of £305,157.71 payable to certain Simwell creditors
which shall be satisfied by the issue of 113,021,374 new Ordinary Shares at
the Issue Price ("Creditor Shares").

·      The sum of £333,001.36 payable to certain Simwell creditors to
be satisfied in cash from the Company's existing cash resources.

·      A contingent deferred consideration of £150,000 ("Deferred
Consideration Amount") payable to the Sellers to be satisfied by the issue of
new Ordinary Shares ("Deferred Consideration Shares"):

o  The contingent deferred consideration will be payable to the Sellers if,
inter alia, the operator of licence P2332 undertakes to the NSTA that the
licensees will commit to drill a well pursuant to a defined work programme and
within the applicable timescales.

o  The number of Deferred Consideration Shares to be issued to the Sellers
will be calculated by dividing the Deferred Consideration Amount by the
prevailing share price based on the ten-day volume weighted average price of
an Ordinary Share, as reported by Bloomberg, immediately preceding the date on
which all of the applicable conditions are satisfied.

Simwell currently holds interests in four UK licences in the Southern North
Sea ("SNS") outlined in the table below:

 

 Licence Number  Simwell Interest  Other JV Partners (Working Interest)                              Operator
 P2332           30%               Shell U.K. Ltd. (70%)                                             Shell U.K. Ltd.
 P2329           10%               Horizon Energy Partners Ltd. (77.5%) and Ardent Oil Ltd. (12.5%)  Horizon Energy Partners Ltd.
 P2427           10%               Horizon Energy Partners Ltd. (77.5%) and Ardent Oil Ltd. (12.5%)  Horizon Energy Partners Ltd.
 P2486           10%               Horizon Energy Partners Ltd. (77.5%) and Ardent Oil Ltd. (12.5%)  Horizon Energy Partners Ltd.

 

 

The transaction is conditional on, inter alia, customary conditions for a
transaction of this nature, including approval by the North Sea Transition
Authority ("NSTA").  If the conditions are not satisfied or waived (as
applicable) within 12 months of the date of the SPA, the SPA shall terminate.

 

The SPA contains customary warranties and a tax indemnity from the Sellers.
The SPA further provides that the Sellers will be subject to a lock-in
undertaking (save for customary exceptions) in respect of (i) the Initial
Consideration Shares for a period of 6 months following completion of the SPA
and (ii) the Deferred Consideration Shares for a period of 6 months following
the date of issue of the Deferred Consideration Shares.

 

Asset Summary:

Simwell has a 30% equity interest in licence P2332 following a farmout to
Shell U.K. Ltd ("Shell"), which is now the operator with a 70% equity
interest.  Shell acquired a 640 km(2) 3D seismic survey in the area covering
licence P2332 in August 2019, funding Simwell's 30% share. The survey also
covered parts of the adjacent licence P2252, which contains the Pensacola
prospect that has been stated by Deltic Energy Plc to have a P50 gross
prospective resources of 309 bcf and is planned to be drilled in Q4 of 2022.
Simwell believe that success at Pensacola would derisk a number of similar
prospects in P2332. Shell will continue to fund 100% of the licence costs
until a drilling election is made.

For licences P2329, P2427 and P2486 a 3D seismic survey was acquired over the
licences in the summer of 2019 where several prospects have been identified.
The new 3D PSTM provides a high-definition view of the Zechstein Hauptdolomite
play.  A further number of prospects, with 4-way closure, have been
identified and are believed to lie on trend to the Ossian-Darach oil
discovery, c. 40km to the west.

 

Admission to AIM:

Following completion of the Transaction, application will be made for the
admission to trading on AIM of the Initial Consideration Shares and Creditor
Shares, and a further announcement will be made in due course.

 

Stephen Williams, Co-CEO of Reabold, commented:

 

"We are delighted to be able to acquire this set of highly prospective assets
at a compelling valuation. This extends our significant position in the
emerging Zechstein play into the offshore, and at an exciting time for the
play ahead of the drilling of Pensacola."

 

Market Abuse Regulation (MAR) Disclosure:

 

This announcement contains inside information for the purposes of the UK
version of 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, as amended.

 

For further information, contact:

 

 Reabold Resources plc                                      c/o Camarco

 Sachin Oza                                                 +44 (0) 20 3757 4980

 Stephen Williams

 Strand Hanson Limited - Nominated & Financial Adviser      +44 (0) 20 7409 3494

 James Spinney

 Rory Murphy

 James Dance

 Stifel Nicolaus Europe Limited - Joint Broker              +44 (0) 20 7710 7600

 Callum Stewart

 Simon Mensley

 Ashton Clanfield

 Panmure Gordon - Joint Broker                              +44 (0) 207 886 2733

 Hugh Rich

 Camarco                                                    +44 (0) 20 3757 4980

 James Crothers

 Billy Clegg

 Rebecca Waterworth

 

 

 

Notes to Editors

 

Reabold Resources plc is an investing company investing in the exploration and
production ("E&P") sector and has a diversified portfolio of assets in
upstream oil & gas projects. Reabold aims to create value from each
project by investing in undervalued, low-risk, near-term projects and by
identifying a clear exit plan prior to investment. The Company's investing
policy is to acquire direct and indirect interests in exploration and
producing projects and assets in the natural resources sector, and
consideration is currently given to investment opportunities anywhere in the
world.

 

Reabold's long term strategy is to re-invest capital made through its
investments into larger projects in order to grow the Company. Reabold aims to
gain exposure to assets with limited downside and high potential upside,
capitalising on the value created between the entry stage and exit point of
its projects. The Company invests in projects that have limited correlation to
the oil price.

 

Reabold has a highly-experienced management team, who possess the necessary
background, knowledge and contacts to carry out the Company's strategy.

 

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