RCS - Sintana Energy Inc - An update letter to shareholders

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RNS Number : 0091G  Sintana Energy Inc  04 November 2025

 

 

CHALLENGER ENERGY GROUP PLC ACQUISITION

AN UPDATE LETTER TO SHAREHOLDERS

 

NOVEMBER 4, 2025

 

Dear Fellow Shareholders,

 

As provided for in regulatory news and press releases by each of Sintana
Energy, Inc. ("Sintana") and Challenger Energy Group plc ("Challenger")
earlier today, we have reached another milestone associated with our proposed
all-share acquisition of Challenger.  A Scheme Document in relation to a
Scheme of Arrangement which details the elements and substance of the
acquisition was published and sent to Challenger shareholders today. It is
available at
https://sintanaenergy.com/investor/business-combination-disclosure/
(https://sintanaenergy.com/investor/business-combination-disclosure/) .

Since the announcement on October 9(th), the prescriptions associated with
takeover laws in the United Kingdom have limited our ability to communicate
with you beyond what is published in relevant regulatory announcements and
documentation associated with the transaction.  We understand that the lack
of direct and proactive communications, together with a sense of our absence,
have caused concerns and frustrations for many of you.

This letter is intended to provide you with some insights and clarity, to
acknowledge your frustrations and concerns, and to be the first step in more
communications going forward.

Transaction Rationale

At the highest level, the acquisition is underpinned by three key drivers -
diversification, exposure to another emerging, high-impact geography, and the
opportunity to expand one of our most-important relationships.

On diversification - together we have been fortunate enough to experience in
Namibia the confluence of right time, right place and right exposure.  This
is rare particularly when it comes to deep-water, frontier exploration.  Our
experience there has provided a level of progress and promise that has been
truly remarkable. We have exposure to a best-in-class portfolio and commercial
partnerships in-country that are strong and vibrant.  However, as in any
other environment there remain many risks and uncertainties, particularly at
this early stage of development.  Diversification becomes more important with
progress particularly when you are otherwise singularly exposed to one
environment.

On Uruguay - in early 2022, none of Uruguay's seven offshore licenses had been
awarded.  By the end of Q2 2024 they had all been.  Today participants in
those licenses include Shell, Apache, YPF and Chevron, together with
Challenger who has interests in two of the seven offshore licenses.  This
licensing activity subsequent to the discoveries at Graff and Venus, and
contemporaneous to the balance of progress in the Orange Basin in Namibia
speaks to the potential of the South Atlantic conjugate margin on the South
American side.  The acquisition of Challenger brings us exposure to what has
the geologic and commercial potential to deliver results similar to those we
have had in Namibia.  It is early, it is frontier - however the outcomes
could be big and the activity is increasing.  These were the circumstances
that brought us to Namibia.

On an expanded partnership with Chevron - we have been fortunate in
participating in Chevron's return to Namibia via its entry into PEL 90 in
October 2022.  Our in-country platform with them has since expanded through
their entry into PEL 82 - evidence not only of the quality of our portfolio
but of the vitality of that relationship.  The acquisition of Challenger
expands the aperture of our partnership across the Atlantic to Uruguay on the
other side of the conjugate margin where Chevron also operates and partially
carries Challenger's 40% retained interest on OFF-1.  This brings to the
combined entity an expanded horizon to develop and enhance our partnership and
relationship with Chevron as they look to increase their activities in global
exploration including in the South Atlantic conjugate margin.

Having an opportunity in one transaction to diversify, to preserve carried
exposure to the upsides of high-impact frontier exploration, and to also
deepen an existing partnership with a super major is truly unique.

The timing has principally been driven by a confluence of factors including
each company's ability to navigate and complete the complex and intensive
efforts associated with the acquisition of an AIM-listed company in the United
Kingdom and the  concurrent process to list for Sintana on the AIM which is
scheduled to be completed by the end of Q4 2025

Management of Conflicts

Given the obvious potential concerns around conflicts of interest the board of
Sintana took a pro-active and rigorous approach to ensuring full independence
in the assessment and adjudication of the acquisition that was additionally
guided by oversight and participation from both UK and Canadian external
counsel.

A special committee was formed immediately upon it becoming clear that a
conversation regarding a potential combination was possible.  This committee,
comprised of disinterested directors, was chaired by Keith, our Executive
Chairman.  Robert was specifically excluded from deliberations of the special
committee and did not participate in negotiations of material terms.  Pareto
Securities AS was hired to provide advice to the special committee on the
proposed terms of the acquisition and provided a fairness opinion in
connection therewith.  The proposed acquisition was recommended to the board
and it received unanimous approval from the voting directors which did not
include Robert who was recused from voting due to various conflicts.  This
process was again guided and included full participation of external UK and
Canadian counsel to Sintana.

Interests of Charlestown and Robert Bose

Charlestown currently holds approximately 21MM shares of Sintana representing
approximately 5.7% of the outstanding share count today.  Additionally,
Robert personally holds another approximately 1.5MM shares and
options/restricted share units amounting to approximately 5MM shares at
exercise prices ranging from C$0.11 and C$1.23.  The total dollar value of
these positions is in the area of C$15MM based on the closing price of
Sintana's common shares on October 31, 2025.

Further as part of the proposed application for admission to trading of
Sintana's common shares on the AIM, Charlestown has committed a US$4MM working
capital facility that the combined company can use to support any liquidity
requirements.  There is no equity component to this facility.  The facility,
together with the value of the equity positions, results in total exposure of
over C$20MM

Charlestown also currently holds 9MM shares of Challenger with a value of
approximately US$1.9MM and approximately 2MM warrants in Challenger with an
exercise price of GBP0.10.  Robert additionally holds approximately 1.5MM
options struck at exercise prices ranging from GBP0.08 to GBP0.24.  The total
implied value of these positions is approximately US$2.2MM, roughly a tenth of
the size of Charlestown's exposure to Sintana.

Save as outlined here, neither Charlestown nor Robert hold any other
securities or interests in any other securities positions in either Sintana or
Challenger.

Absence of a Shareholder Vote by Sintana Shareholders

Canadian securities regulatory rules and requirements, including those
associated with Multilateral Instrument 61-101, speak to the circumstances
under which a shareholder vote is required.  A detailed analysis of the
transaction in light of the prescriptions of MI 61-101 was conducted by
counsel and submitted to the relevant Canadian securities regulators.  We
continue to progress through the Canadian review process.

While we understand and have heard clearly your concerns and frustrations,
please rest assured that the prospect of these were identified early and the
transaction process was developed to fully adhere to all relevant regulatory
requirements but more substantially to ensure that all elements were executed
to fully protect the process and our shareholders.  We remain steadfast in
our belief in the merits and benefits of this combination to Sintana, and by
extension to our fellow shareholders.

We hope these insights into the background, context and management of the
acquisition provide some assistance in addressing the concerns and issues
raised.  Prospectively, we are at your disposal to answer further questions
or address any concerns - please do remit any you have to our communications
team (details below) or via our website investor links.  We will follow-up
and find the best forum to ensure we are able to effectively communicate with
you and ensure we remain onside the relevant securities regulatory
requirements.

On behalf of Sintana Energy Inc.,

 

"Keith
Spickelmier"
"Robert Bose"

Executive Chairman
 
Chief Executive Officer

 

 

The Company is engaged in petroleum and natural gas exploration and
development activities in six petroleum exploration licenses in Namibia,
including 5 offshore located variously in the Orange and Walvis Basins, as
well as in Colombia's Magdalena Basin. Additionally, upon completion of a
previously announced transaction, Sintana will have exposure to a license in
Angola's emerging onshore Kwanza Basin. Sintana's strategy is to acquire and
manage a portfolio of exposures to superior quality assets with substantial
value potential.

 

For additional information or to sign-up to receive periodic updates about
Sintana's projects, and corporate activities, please visit the Company's
website at www.sintanaenergy.com

 

Corporate Contact:
           Communications & Investor Relations Advisor:

Robert Bose
                    Jonathan Paterson

Chief Executive Officer
            Founder & Managing Partner

212-201-4125
                  Harbor Access

 
                                  475-477-9401

 

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 p.m. (London time) on the business day following the date of the
relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they shall
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any
offeror was first identified. You should contact the Panel's Market
Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether
you are required to make an Opening Position Disclosure or a Dealing
Disclosure.

Forward-Looking Statements

 

Certain information in this release are forward-looking statements.
Forward-looking statements consist of statements that are not purely
historical, including statements regarding beliefs, plans, expectations or
intensions for the future, and include, but not limited to, statements with
respect to the prospective nature of the Company's and Challenger's property
interests, future plans and prospectivity, the receipt of all applicable
shareholder, Court, regulatory and third party approvals, the proposed
admission of the common shares of Sintana to be listed on AIM and the
anticipated timing thereof, and the completion of the acquisition and proposed
loan by Charlestown to the resulting entity on the terms presently proposed or
at all.  Such statements are subject to risks and uncertainties that may
cause actual results, performance or developments to differ materially from
those contained in the statements, including, but not limited to risks
relating to the receipt of all applicable shareholder, Court, regulatory
and/or third party approvals, the satisfaction or waiver of all conditions to
the completion of the acquisition and/or admission, results of exploration
activities, the ability to source joint venture partners and fund exploration,
permitting and government approvals, and other risks identified in the
Company's public disclosure documents from time to time.  Readers are
cautioned that the assumptions used in the preparation of such information,
although considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on forward-looking
statements.  The Company assumes no obligation to update such information,
except as may be required by law.

 

 

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

 

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