Roxi Petroleum Plc Cancellation of Royalty (9663T)
July 24 2015 - 1:01AM
UK Regulatory
TIDMRXP
RNS Number : 9663T
Roxi Petroleum Plc
24 July 2015
Roxi Petroleum PLC
("Roxi" or the "Company")
Cancellation of Royalty
Roxi, the Central Asian oil and gas company with a focus on
Kazakhstan, is pleased to announce it has entered into an agreement
with Canamens Limited ("CL") and Sector Spesit IV, a sub-fund of
Sector Umbrella Trust ("SS4") to cancel future royalty payments due
to them from production from Roxi's BNG asset in return for the
issue of 46,661,654 fully paid ordinary shares representing 5% of
the enlarged issued ordinary share capital.
Background
Roxi acquired its interest in the BNG Contract Area in 2008 as
part of Roxi's acquisition of 59% of Eragon Petroleum Limited
("Eragon').
In January 2009, Roxi entered into a farm out agreement with
Canamens Central Asia BV ("CCA") whereby CCA acquired a 35% stake
in BNG from Roxi in return for a $7 million payment to Roxi plus a
further $45 million to be paid towards existing BNG work programme
commitments.
In March 2011 Roxi announced that CCA had informed Roxi that it
would be unable to pay the full amount due under the work programme
commitments. On 11 May 2011 an agreement between Roxi and CCA was
announced whereby for an initial payment by Roxi of $2.5 million
plus a royalty in perpetuity of 1.5% of production revenues
(calculated by reference to the wellhead price) (the "BNG Royalty")
the 35% stake in BNG previously acquired by CCA was restored to
Roxi.
Since that date the BNG Royalty agreement was assigned
intra-group by CCA to CL, which holds the benefit of the BNG
Royalty as to 50% for itself, and 50% for SS4.
Details of the Cancellation Agreement
Under the Cancellation Agreement, CL and SS4 agree to cancel and
terminate in full their interests in the BNG Royalty in
consideration of Roxi issuing to CL 46,661,654 new ordinary shares
fully paid representing 5% of the enlarged Roxi issued ordinary
share capital.
Completion of the Cancellation Agreement is conditional on, and
will take place on the business day after, the passing of
resolutions 6 and 7 at the annual general meeting of Roxi to be
held on 24 July 2015, as set out in the Notice of AGM dated 25 June
2015.
Lock-in agreements
Under the terms of the Cancellation Agreement, CL has entered
into a 3 month orderly market agreement.
Subject to completion and upon the issue of 46,661,654 ordinary
shares, the total number of ordinary shares in issue following the
issue of these shares will be 933,233,077.
Roxi has no shares in treasury, therefore this figure may be
used by shareholders from admission as the denominator for
calculations by which they will determine if they are required to
notify their interest in, or a change in their interest in, the
share capital of the Company under the FCA's Disclosure and
Transparency Rules.
Inter-conditional agreement with Baverstock
Since January 2015, under the terms of the 2008 Eragon
Acqusition Agreement, Roxi and Baverstock have been liable to fund
all costs incurred in respect of BNG in the ratio 59:41, including
the 1.5% royalty payment on BNG production revenue.
Accordingly, in consideration of Roxi issuing 46,661,654
ordinary shares to cancel the 1.5% royalty under the Cancellation
Agreement, Roxi has entered into a parallel BNG Royalty Agreement
with Baverstock, with effect from completion of the Cancellation
Agreement. Under the terms of this agreement Baverstock will pay to
Roxi in perpetuity a royalty payment at the rate of 0.615% of the
production revenues at BNG, being 41% of the 1.5% original BNG
Royalty to reflect the interest in BNG attributable to
Baverstock.
Comment:
Clive Carver, Chairman said
"This is an excellent deal for Roxi. On completion, we have
removed a future uncapped liability, which may have affected the
Company's ability to secure traditional debt funding and replaced
it with a supportive institutional shareholder."
Enquiries:
Roxi Petroleum PLC Clive Carver, Chairman
+7 727 375 0202
WH Ireland Ltd James Joyce / James Bavister
+44 (0) 207 220 1666
This information is provided by RNS
The company news service from the London Stock Exchange
END
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