TIDMEDR
RNS Number : 7321K
Egdon Resources PLC
06 January 2021
EGDON RESOURCES PLC
("Egdon" or "the Company")
Subscription by Petrichor Partners LP ("Petrichor Partners") and
Jalapeño Corporation ("Jalapeño") for GBP1,051,035 Convertible Loan
Notes
Approval of a waiver of an obligation under Rule 9 of the City
Code on Takeovers and Mergers
Notice of General Meeting
Egdon Resources plc (AIM: EDR, "Egdon") is pleased to announce
that it has entered into subscription agreements with Petrichor
Partners and Jalapeño (the "Subscription Agreements"), subject to
certain terms and conditions, to raise gross proceeds of
approximately GBP1.05 million through the issue of convertible loan
notes (the "Convertible Loan Notes") in order to fund ongoing
exploration and development projects.
The capitalised terms in this announcement shall have the
meaning ascribed to them in the definitions section contained in
Appendix 2 of this announcement.
Petrichor Partners and Jalapeño may, at any time when any of the
Convertible Loan Notes are outstanding, convert such outstanding
amount into Ordinary Shares in the Company at a price of 1.55 pence
per Ordinary Share (the "Conversion Price") following the issue of
the Convertible Loan Notes. Subject to Petrichor Partners and
Jalapeño not exercising their option to convert the amount
outstanding into Conversion Shares during the 12 months following
the issue of the Convertible Loan Notes, they will be redeemed by
the Company 12 months following their issue.
The general partner of Petrichor Partners is HEYCO International
Inc ("HINT"), a subsidiary of HEYCO Energy Group Inc ("HEYCO").
HEYCO, through its wholly-owned subsidiary Petrichor Holdings
Coöperatief U.A. ("Petrichor"), together with its Connected Persons
and other persons acting in concert with it and as described more
fully in Part III of the Circular, is currently interested in
111,643,046 Ordinary Shares, representing 34.01 per cent. of the
Existing Ordinary Shares.
Based on the assumptions set out in Appendix 3 of this
announcement, the Directors expect that the conversion of the
Convertible Loan Notes (including the capitalisation of any
interest which will accrue on the Convertible Loan Notes) would
result in the issue to Petrichor Partners of a maximum of
69,684,386 Ordinary Shares and the issue to Jalapeño of a maximum
of 3,549,020 Ordinary Shares (together, the "Conversion Shares"),
increasing the total interest of the Concert Party to a maximum of
184,876,452 Ordinary Shares, representing 46.04 per cent. of the
Company's Enlarged Ordinary Share Capital (assuming no options
issued by the Company or other securities convertible or
exchangeable into Ordinary Shares are exercised other than those
held by members of the Concert Party and that the Company does not
issue any other Ordinary Shares), and the Concert Party would
therefore be interested in Ordinary Shares carrying 30 per cent. or
more of the Company's voting share capital but not hold Ordinary
Shares carrying more than 50 per cent. of more of such voting
rights.
As Petrichor is currently interested in more than 10 per cent.
of the issued ordinary share capital of the Company, the
subscription for the Convertible Loan Notes is a related party
transaction for the purposes of Rule 13 of the AIM Rules for
Companies. For the purposes of the AIM Rules for Companies, the
Directors of the Company, having consulted with the Company's
nominated adviser, WH Ireland, consider that the terms of the
transaction are fair and reasonable so far as its Shareholders are
concerned.
The Takeover Panel (the "Panel") has agreed, however, to waive
the obligation for the Concert Party to make a general offer ("Rule
9 Waiver") that would otherwise arise as a result of the issue of
the Convertible Loan Note Shares to the Concert Party, subject to
the approval, on a poll, of the Independent Shareholders (the
"Whitewash Resolution"). Accordingly, the Whitewash Resolution is
being proposed at the General Meeting and will be taken on a poll
at the General Meeting, notice of which is set out in the Circular
to be distributed to Shareholders on or around the date of this
Announcement. The General Meeting is to be held at the offices of
Egdon Resources plc at The Wheat House, 98 High Street, Odiham,
Hampshire RG29 1LP at 10.00 a.m. on 22 January 2021.
The Company notes the guidance issued by the UK government
restricting social gatherings in view of the ongoing COVID-19
pandemic and the fact that, if such guidance remains in place on
the date of the General Meeting, as seems likely, shareholders will
be prohibited from attending the General Meeting. Given the current
guidance the Company requests that shareholders do not attend the
General Meeting but instead appoint the chairman of the General
Meeting as a proxy to ensure their vote is recognised and provide
voting instructions in advance of the General Meeting. Other named
proxies will not be allowed to attend the General Meeting and their
votes will not be counted
Mark Abbott, Managing Director, commented :
"This is a major endorsement from HEYCO and strong confirmation
of the belief of HEYCO and its management in the longer-term
prospects for Egdon. The funds raised by the issue of the
Convertible Loan Notes will significantly strengthen the Company's
financial position and allow it, together with existing cash, to
fund ongoing exploration and development projects such as the
development of the Wressle oil field, planning for the
Biscathorpe-2 side-track well and preparation for the acquisition
of 3D seismic over the Resolution Prospect and for additional
working capital to maintain and develop the assets and opportunity
base of the business."
Enquiries:
Egdon Resources plc
Mark Abbott / Martin Durham 01256 702 292
Financial Adviser & Joint Broker - VSA Capital
Limited
Andrew Monk (Corporate Broking)
Andrew Raca (Corporate Finance) 020 3005 5000
Nominated Adviser & Joint Broker - WH Ireland
Limited
Chris Hardie
Lydia Zychowska 020 7220 1666
Buchanan
Ben Romney, Chris Judd 020 7466 5000
Notes to Editors:
Egdon Resources plc (LSE: EDR) is an established UK-based
exploration and production company focused on onshore exploration
and production in the hydrocarbon-producing basins of the UK.
Egdon holds interests in 42 licences in the UK and has an active
programme of exploration, appraisal and development within its
portfolio of oil and gas assets. Egdon is an approved operator in
the UK. Egdon was formed in 1997 and listed on AIM in December
2004.
Qualified Person Review
In accordance with the AIM Rules - Note for Mining and Oil and
Gas Companies, this release has been reviewed by Mark Abbott,
Managing Director of Egdon, who is a geoscientist with over 30
years' experience and is a member of the Petroleum Exploration
Society of Great Britain and a Fellow of the Geological Society. Mr
Abbott has consented to the inclusion of the technical information
in this release in the form and context in which it appears.
Evaluation of hydrocarbon volumes has been assessed in
accordance with 2007 Petroleum Resources Management System prepared
by the Oil and Gas Reserves Committee of the Society of Petroleum
Engineers (SPE) and reviewed and jointly sponsored by the World
Petroleum Council (WPC), the American Association of Petroleum
Geologists (AAPG) and the Society of Petroleum Evaluation Engineers
(SPEE).
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the Market Abuse Regulation (EU) No. 596/2014
which is part of UK lay by Virtue of the European Union
(Withdrawal) Agreement. Upon the publication of this announcement
via Regulatory Information Service ("RIS"), this inside information
is now considered to be in the public domain.
Issue of 8 per cent. unsecured Convertible Loan Notes
Approval of waiver of obligations under Rule 9 of the Takeover
Code and
Notice of General Meeting
Reason for the issue of Convertible Loan Notes and use of
proceeds
The funds raised by the issue of the Convertible Loan Notes will
significantly strengthen the Company's financial position and allow
it, together with existing cash, to fund ongoing exploration and
development projects such as the development of the Wressle oil
field, planning for the Biscathorpe-2 side-track well and
preparation for the acquisition of 3D seismic over the Resolution
Prospect and for additional working capital to maintain and develop
the assets and opportunity base of the business.
Current Trading and Outlook
On 6 January 2021, the Company announced its preliminary results
for the year ended 31 July 2020 and provided updates on its current
assets, trading and outlook. The full announcement can be read on
the Company' s website at www.egdon-resources.com.
In relation to the Company's operational and corporate
highlights for the period, the preliminary results announcement
stated:
-- Production during the year was 145 boepd (2019: 182 boepd)
ahead of guidance of 130-140 boepd
-- Planning permission was granted for the Wressle development
on appeal on 17 January 2020 following a public inquiry in November
2019. Full costs were awarded against North Lincolnshire Council
and have since been received. Field development operations are
progressing well and first oil is targeted during January 2021,
which will add 150 bopd to Egdon's production
-- During March 2020, we announced the results of an in-depth
assessment of the Biscathorpe project (PEDL253) which identified
technically and commercially attractive target areas accessible via
a side-track of the suspended Biscathorpe-2 well. A planning
application is in the process of being prepared for submission to
enable this
-- The farm-out of the Resolution and Endeavour gas discoveries
(P1929 and P2304) to Shell Oil U.K. Limited ("Shell") and agreed
licence extensions and new work programme obligations with the Oil
and Gas Authority ("OGA")
-- During September 2019, the encouraging gas in place results
for Springs Road-1 were announced indicating the presence of a
potentially world class resource in the "Gainsborough Shales" of
the Gainsborough Trough where Egdon holds 71,361 net acres (289
km(2) )
-- During early November 2019, Government announced the
introduction of a moratorium on high volume hydraulic fracturing
for shale-gas that will remain in place until new evidence is
provided. Along with our industry peers we are continuing to work
with the OGA and other regulators on this matter
-- On 18 June 2020 a confidential settlement was reached with
Humber Oil and Gas in respect of PEDL253 litigation and monies were
received on 25 August 2020
Operational highlights since 31 July 2020 include:
-- On 25 August 2020 the farm-outs to Shell were completed for
the Resolution and Endeavour assets (P1929 and P2304)
-- On 7 September 2020 we received approval for an extension of
planning consent to 31 December 2021 for the drilling of North
Kelsey-1 (PEDL241) which had been delayed due to COVID-19
restrictions during the earlier part of the year
-- PEDL143 Licence relinquished during September 2020
-- On 26 November 2020 Egdon announced that it had entered into
a GBP1.00 million loan facility with Union Jack Oil plc
In relation to the Company's outlook, the preliminary results
announcement stated:
The expected start of production at Wressle during late January
2021 will transform Egdon's production and cash-flow. Production
guidance for the first half of the financial year 2020-21 is 100
boepd and 200 boepd for the second half of the year resulting in
full year guidance of 140-150 boepd.
The historically low gas price seen over the last winter and
continuing through the summer of 2020 has seen a recovery in recent
months and is expected to return to more normal levels during the
coming winter period. Oil prices have recovered from the lows seen
at the onset of the COVID-19 pandemic, but are expected to remain
strongly linked to worldwide economic activity levels.
Operationally, in the short-term we will continue to focus on
high impact projects within our conventional resource portfolio
whilst working with the industry to demonstrate to the OGA and
other regulators that we can operate safely to deliver lower
emission UK gas to the market.
Our key activities and focus for the coming year will be:
-- Continuing to carefully manage costs and cash through the
current challenging operating environment
-- Finalising the development of the Wressle oil field for production start-up in January 2021
-- Progressing the planning application for a Biscathorpe-2
side-track well to be drilled in 2021 and where we may look to
secure a partial farm-out
-- Progressing a farm-out of North Kelsey-1 for drilling in 2021
-- Streamlining the conventional resource portfolio to
concentrate on a smaller number of key assets whilst maintaining
our position in core unconventional resource assets
-- Progressing the acquisition of the 3-D seismic survey over
the Resolution and Endeavour gas discoveries in February 2022
-- Subject to lifting of the current moratorium on hydraulic
fracturing operations for shale-gas, progressing the planning and
permitting for the drilling and subsequent testing of the Springs
Road-2 well
-- Reviewing the Energy Transition opportunities within the
current portfolio, including repurposing of existing wells for
geothermal energy
Despite the unprecedented challenges experienced during the
year, the fundamentals of the business are robust with the Company
having a range of high potential assets in both the conventional
hydrocarbon resource and nascent shale-gas sectors.
The Company is focused on reducing costs and expenditure and on
progressing key near term cash generative projects such as Wressle.
We will continue to keep activity under review in light of the
current circumstances and position the Company for growth once
normality returns.
We will also continue to review opportunities in the energy
space that leverage our expertise with a focus on projects with
near term predictable cash flows, opportunities to reduce costs and
a low execution risk and capital requirement. "
Principal terms of the Convertible Loan Notes
The Company is proposing to raise approximately GBP1.05 million,
before expenses, by way of an issue of Convertible Loan Notes to
Petrichor Partners and Jalapeño, pursuant to the terms of a
Subscription Agreement and a Convertible Loan Note Instrument.
Execution of the Convertible Loan Note Instrument, and the
obligation to issue and subscribe, remain conditional upon, amongst
other things, Shareholders approving the Resolutions at the General
Meeting.
A summary of the principal terms of the Convertible Loan Notes
is set out below:
Fees and interest
The Company will pay interest on the full amount of the issued
Convertible Loan Notes from the date of issue at a rate of 8 per
cent. per annum (the "Interest Rate"). Interest will accrue daily
and shall be calculated on the basis of a 365-day year and the
actual number of days elapsed from the date of issue of the
Convertible Loan Notes to the date falling 12 (twelve) months from
the date of issue of the Convertible Loan Notes (the "Redemption
Date"). If the Company fails to pay redemption monies when due,
interest shall continue to accrue on the unpaid amount at the
Interest Rate. Interest shall not be compounded. Any interest which
accrues on the Convertible Loan Notes can be capitalised at any
time into Ordinary Shares at the Conversion Price.
Issue and repayment
The Company may make a drawdown request to the Convertible Loan
Note Holders for the maximum amount of approximately GBP1.05
million under the Subscription Agreement conditional upon
Shareholders approving the Resolutions at the General Meeting, and
the Convertible Loan Note Holders shall have up to two business
days in which to pay the funds due under the subscription
request.
Following receipt of the funds, the Convertible Loan Notes will
be issued within two business days. Unless the Convertible Loan
Note Holders exercise their option to convert the amount
outstanding into Ordinary Shares they will be redeemed by the
Company at the Redemption Date.
The Company may, repay the Convertible Loan Notes in full or in
part without penalty prior to the Redemption Date, together with
the interest accrued thereon at the Interest Rate between the date
of issue and the date of such repayment, provided that the full 12
months of interest will be due and payable if the Convertible Loan
Notes are converted into shares.
The Company may be required by the Convertible Loan Note Holders
to redeem the Convertible Loan Notes if it becomes unlawful for the
Convertible Loan Note Holders to hold the Convertible Loan Notes,
the Company has breached its representations and warranties to the
Convertible Loan Note Holders or failed to comply with its
undertakings given to the Convertible Loan Note Holders in the
Subscription Agreement, or an event of default occurs.
Events of Default
The Company's obligation to redeem the Convertible Loan Notes in
full may be accelerated by the Convertible Loan Note Holder
following the occurrence of certain events. The identity and scope
of the events of default in the Convertible Loan Notes follow the
approach commonly taken in senior secured credit facilities and
include (but without limitation) non-payment of amounts due,
non-compliance with the terms of the agreement, insolvency and
insolvency-related events.
Conversion
The Convertible Loan Note Holders may, at any time when any
principal of the Convertible Loan Notes is outstanding, convert
such outstanding amount into Ordinary Shares in the Company at a
price of 1.55 pence per Ordinary Share (the "Conversion Price").
The Conversion Price will be adjusted in certain circumstances to
ensure that the number of Ordinary Shares arising on conversion
confer the same relative entitlement (e.g. if there is a
sub-division, consolidation or bonus issue). The Conversion Shares
shall be credited as fully paid and rank pari passu with Ordinary
Shares of the same class in issue on the conversion date. The
Company will, following conversion, apply to have the Conversion
Shares listed on AIM.
Security and Guarantee
The Convertible Loan Notes when issued will be an unsecured
obligation of the Company.
Transfer
The Convertible Loan Notes are only transferable by Petrichor
Partners or Jalapeño to a member of the Concert Party.
Listing
The Company does not intend to apply for the Convertible Loan
Notes to be listed.
Waiver of Rule 9 of the City Code on Takeovers and Mergers
The purpose of the Takeover Code is to supervise and regulate
takeovers and other matters to which it applies. The Takeover Code
is issued and administered by the Takeover Panel. The Company is a
company to which the Takeover Code applies and as such its
Shareholders are therefore entitled to the protections afforded by
the Takeover Code.
Under Rule 9 of the Takeover Code, where any person acquires,
whether by a single transaction or a series of transactions over a
period of time or not, an interest (as defined in the Takeover
Code) in shares which (taken together with shares in which persons
acting in concert with him are interested) carry 30 per cent. or
more of the voting rights of a company which is subject to the
Takeover Code, that person is normally required by the Panel to
make a general offer, in cash (or with a cash alternative), to all
remaining shareholders to acquire their shares. Such a general
offer must be at the highest price paid by such person (or anyone
acting in concert with such person) for any interest in shares
during the 12 months prior to the announcement of that general
offer. Rule 9 of the Takeover Code further provides that, inter
alia, where any person who, together with persons acting in concert
with him, is interested in shares which in aggregate carry not less
than 30 per cent. of such voting rights, but does not hold shares
carrying more than 50 per cent. of such voting rights, and such
person, or any such person acting in concert with him, acquires an
interest in additional shares which increase his percentage of
shares carrying voting rights, such person is normally required by
the Panel to make a general offer to the remaining shareholders to
acquire their shares on the same terms as summarised above by a
general offer.
For the purposes of the Code, Petrichor together with its
Connected Persons and other persons acting in concert with it, as
described more fully in Part III of the Circular, form the Concert
Party. The Concert Party is currently beneficially interest in
111,643,046 Ordinary Shares, representing approximately 34.00 per
cent. of the Existing Ordinary Shares.
The Convertible Loans Notes are convertible into Ordinary Shares
at a price of 1.55 pence per Ordinary Share at any time after
issue. Any interest which accrues on the Convertible Loan Notes can
also be capitalised into Ordinary Shares at the Conversion Price.
The Company expects that the Convertible Loan Note certificates
will be issued approximately two business days following the
General Meeting (should the Resolutions be approved). The
conversion of the Convertible Loan Notes would result in the issue
to the Concert Party of up to 73,233,406 Ordinary Shares which,
together with the Concert Party's existing shareholding, would
represent an interest in a maximum of 46.04 per cent. in the
Company's Enlarged Ordinary Share Capital (assuming full conversion
of all Convertible Loan Notes by the Convertible Loan Note Holders
on the earliest date, being 26 January 2021, the interest being
paid in shares, and there being no changes to the Company's share
capital prior to the issue of all of the Conversion Shares, based
on the assumptions set out in paragraph 3.3 of Part III).
The members of the Concert Party, who are interested in Ordinary
Shares carrying 30 per cent. or more of the Company's voting share
capital but do not hold Ordinary Shares carrying more than 50 per
cent. or more of such voting rights would, on conversion, acquire
an interest in additional shares which increases its percentage
holding of shares carrying voting rights but would not, on a full
conversion, hold Ordinary Shares carrying more than 50 per cent.
The Panel has been consulted and has agreed to waive the
requirement for the members of the Concert Party to make a general
offer under Rule 9 of the Takeover Code in cash for Ordinary Shares
in the Company which might otherwise arise as a result of the issue
of the Conversion Shares to the members of the Concert Party
pursuant to the conversion of the Convertible Loan Notes into
Ordinary Shares, subject to the Whitewash Resolution (as set out in
the notice convening the General Meeting) being passed on a poll of
the Independent Shareholders. To be passed, the Whitewash
Resolution will require a simple majority of the votes cast by the
Independent Shareholders.
Related Party Transaction
As Petrichor is currently interested in more than 10 per cent.
of the issued ordinary share capital of the Company, the
subscription for the Convertible Loan Notes is a related party
transaction for the purposes of Rule 13 of the AIM Rules for
Companies. For the purposes of Rule 13 of the AIM Rules for
Companies, the Directors of the Company, having consulted with the
Company's nominated adviser, WH Ireland, consider that the terms of
the transaction are fair and reasonable so far as its Shareholders
are concerned.
General Meeting
The Circular includes the Notice of General Meeting. The General
Meeting is to be held at the offices of at the offices of Egdon
Resources plc at The Wheat House, 98 High Street, Odiham, Hampshire
RG29 1LP. At 10.00 a.m. on 22 January 2021. At the General Meeting
Resolutions will be proposed as follows:
At the General Meeting, Resolutions will be proposed as
follows:
Resolution 1, (the "Whitewash Resolution") which will be
proposed as an ordinary resolution and will be taken on a poll of
Independent Shareholders voting in person or by proxy, to approve
the Rule 9 Waiver;
Resolution 2, which will be proposed as an ordinary resolution,
to authorise the Directors to allot Ordinary Shares pursuant to the
terms of the Subscription Agreement and Convertible Loan Note
Instrument up to a maximum nominal amount of GBP732,334.06; and
Resolution 3, which will be proposed as a special resolution, to
disapply the statutory pre-emption rights in respect of the
Ordinary Shares allotted for cash, pursuant to the authority
conferred on them by resolution 2 to allot such shares up to a
maximum nominal value of GBP732,334.06.
Resolution 1 will be taken in accordance with the requirements
of the Takeover Code, and be taken on a poll of Independent
Shareholders present and by proxy voting at the General Meeting.
Shareholders should note that members of the Concert Party will not
be permitted to vote on Resolution 1.
The Company specifies that only those members registered on the
Company's register of members at:
-- the close of business on 20 January 2021; or
-- if the General Meeting is adjourned, at the close of business
on the day two days (excluding non- working days) prior to the
adjourned meeting,
shall be entitled to attend and vote at the General Meeting.
Irrevocable Undertakings
The Company has received undertakings from Premier and the
Directors (who hold Ordinary Shares) to vote in favour of the
Resolutions at the General Meeting in respect of in aggregate
59,329,814 Ordinary Shares representing approximately 27.38 per
cent. of the Existing Ordinary Shares held by Independent
Shareholders that are able to vote on Resolutions 1 and, in
aggregate 59,329,814 Ordinary Shares representing approximately
18.07 per cent. of the Existing Ordinary Shares that are able to
vote on Resolutions 2 and 3. The Concert Party, which is interested
in 34.00 per cent. of the Existing Ordinary Shares of the Company,
has undertaken to vote in favour of the Resolutions (other than
Resolution 1).
Recommendation
The Takeover Code requires the Board to obtain competent
independent advice regarding the merits of the transaction which is
the subject of the Rule 9 Waiver, the controlling position which it
will create, and the effect which it will have on the Shareholders
generally. The Directors, having been so advised by VSA, as the
Company's financial adviser, consider the Proposals to be fair and
reasonable and in the best interests of the Company and its
Shareholders as a whole. In giving its advice, VSA has taken
account of the commercial assessments of the Directors.
Accordingly, the Directors unanimously recommend, that
Shareholders vote in favour of the Resolutions as they have
irrevocably undertaken to do in respect of their aggregate
beneficial holdings of 13,596,481 Ordinary Shares, representing
4.14 per cent. of the total number of issued Ordinary Shares in the
Company.
APPIX 1
MARKET STATISTICS
Principal amount of the Convertible GBP1,051,035
Loan Notes to be issued to Petrichor
Partners and Jalapeño
Estimated net proceeds of the GBP975,000
Convertible Loan Notes
Number of Existing Ordinary Shares 328,315,625
Conversion Price per Ordinary 1.55 pence
Share under the Convertible Loan
Notes
Conversion Shares to be issued
to Petrichor Partners and Jalapeño
on conversion of the Convertible
Loan Notes* 73,233,406
Enlarged Ordinary Share Capital* 401,549,031
Percentage of the Enlarged Ordinary 46.04 per cent.
Share Capital to be held by the
Concert Party*
* Assumes that all issued Convertible Loan Notes are converted
and that all interest payments which will accrue on the Convertible
Loan Notes will be capitalised into Ordinary Shares at the
Conversion Price.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Announcement of the Proposals 6 January 2021
Publication and posting of the 6 January 2021
Circular
Record Date for voting at the Close of business on 20 January
General Meeting 2021
Latest time and date for receipt 10.00 a.m. on 20 January 2021
of Forms of Proxy or CREST Proxy
Instructions (as applicable)
for the General Meeting
General Meeting 10.00 a.m. on 20 January 2021
Announcement of the result of 22 January 2021
the General Meeting
Issue of the Convertible Loan on or around 26 January 2021
Note Certificates
Notes
1. Each of the times and dates set out in the above timetable
and mentioned in the Circular is based on the Company's current
expectations and subject to change by the Company (with the
agreement of VSA), in which event details of the new times and
dates will be notified to the London Stock Exchange, where
required, and the Company will make an appropriate announcement to
a Regulatory Information Service
2. References to times in the Circular are to London times unless otherwise stated
APPIX 2
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
Act means the Companies Act 2006 (as amended)
AIM means the market of that name operated
by the London Stock Exchange
AIM Rules for Companies means the AIM Rules for Companies, as
published and amended from time to time
by the London Stock Exchange
AIM Rules for Nominated means the rules for nominated advisers
Advisers to AIM companies, as published and amended
from time to time by the London Stock
Exchange
Articles means the existing articles of association
of the Company as at the date of the
Circular
Board means the board of directors of the Company
from time to time
boe means barrel of oil equivalent
boepd means barrel of oil equivalent per day
Business Day means any day (excluding Saturdays and
Sundays) on which banks are open in London
for normal banking business and the London
Stock Exchange is open for trading
Company or Egdon means Egdon Resources plc
Concert Party means HEYCO, HINT, Petrichor, Jalapeño
and Petrichor Partners (and its limited
partners)
Connected Persons has the meaning set out in section 252
and section 254 of the Act and includes
spouse, children under 18 and any company
in which the relevant person is interested
in shares comprising at least one-fifth
of the share capital of that company
Conversion Price 1.55 pence
Conversion Shares means the new Ordinary Shares to be issued
on conversion of the Convertible Loan
Notes including on the capitalisation
of any interest payable on the Convertible
Loan Notes
Convertible Loan Notes means the GBP1,051,035 nominal 8% unsecured
convertible loan notes that may be issued
to Petrichor Partners and Jalapeño
pursuant to the Subscription Agreement
and the Convertible Loan Notes Instrument
Convertible Loan Note means a holder of a Convertible Loan
Holder Note
Convertible Loan Note means the instrument constituting the
Instrument Convertible Loan Notes, execution of
which by the Company is conditional upon
the resolutions set out in the Notice
of GM being passed by Shareholders at
the General Meeting
Directors means the directors of the Company at
the date of the Circular whose names
are set out on page 4 of the Circular
Disclosure Date means 5 January 2021
Enlarged Ordinary Share the Existing Ordinary Shares and the
Capital Conversion Shares
Existing Ordinary Shares the existing 328,315,625 Ordinary Shares
in issue as at the date of
the Circular
FCA means the Financial Conduct Authority
of the United Kingdom
Form of Proxy means the form of proxy accompanying
the Circular for use at the GM
FSMA means the Financial Services and Markets
Act 2000 (as amended)
GM or General Meeting means the general meeting of the Company
convened for 10.00 a.m. at the offices
of Egdon Resources plc at The Wheat House,
98 High Street, Odiham, Hampshire RG29
1LP on 22 January 2021 by the Notice
of GM and any adjournment thereof
Group means the Company and its subsidiaries
and subsidiary undertakings
HEYCO means HEYCO Energy Group, Inc.
HINT means HEYCO International Inc.
Independent Shareholders means Shareholders who are eligible to
vote on the Whitewash Resolution, being
shareholders other than HEYCO, HINT,
Petrichor, Jalapeño or Petrichor
Partners (and its limited partners)
Interest Rate 8 per cent. per annum
issued share capital means, except where stated to the contrary,
the issued share capital of the Company
excluding treasury shares
LSE or London Stock means London Stock Exchange plc
Exchange
Jalapeño means Jalapeño Corporation
Link Group a trading name of Link Group
London Stock Exchange means London Stock Exchange plc
Money Laundering Regulations means The Money Laundering, Terrorist
Financing and Transfer of Funds (Information
on the Payer) Regulations 2017
Notice of GM means the notice of the GM set out at
the end of the Circular
Official List means the Official List of the FCA
Ordinary Shares means the issued ordinary shares of 1p
each in the capital of the Company as
at the date of the Circular
Panel or Takeover Panel mean the Panel on Takeovers and Mergers
PEDL means the United Kingdom onshore petroleum
exploration and development licence
Petrichor means Petrichor Holdings Coöperatief
U.A., a wholly owned subsidiary of HEYCO
Petrichor Partners means Petrichor Partners, LP
Premier means Premier Oil plc
Proposals means the issue of the Convertible Loan
Notes and the Rule 9 Waiver
Prospectus Rules means the rules made by the FCA under
Part VI of FSMA in relation to offers
of transferable securities to the public
and admission of transferable securities
to trading on a regulated market
Redemption Date means the date falling 12 (twelve) months
from the date of issue of the Convertible
Loan Notes
Registrar means Link Group, Corporate Actions,
The Registry, 34 Beckenham Road, Beckenham,
Kent BR3 4TU
Relationship Agreement has the meaning given to that term in
paragraph 5.3 of Part II of the Circular
Resolution Prospect means the Resolution Gas Discovery field
held under licence P1929
Rule 9 means Rule 9 of the Takeover Code
Rule 9 Waiver means the waiver by the Panel of any
requirement under Rule 9 of the Takeover
Code for the Concert Party to make a
general offer to Shareholders for the
Company which would otherwise arise as
a result of the issue of the Conversion
Shares to Petrichor Partners and Jalapeño
on conversion of the Convertible Loan
Notes
Shareholders means holders of Existing Ordinary Shares
Subscription Agreement means the subscription agreements dated
6 January 2021 entered into by the Company
and Petrichor Partners and Jalapeño
in relation to the subscription for the
Convertible Loan Notes, as described
further in paragraph 5.1 of Part II of
the Circular
Subsidiary means a subsidiary undertaking as that
term is defined in the Act
Takeover Code or Code means the City Code on Takeovers and
Mergers
Underwriting Agreement means the agreement dated 15 May 2019,
entered into by Petrichor and the Company
in respect of the underwriting of the
open offer
United Kingdom or UK means the United Kingdom of Great Britain
and Northern Ireland
GBP or Pounds means UK pounds sterling, being the lawful
currency of the United Kingdom
US Securities Act means the United States Securities Act
of 1933, (as amended).
VSA means VSA Capital Limited of New Liverpool
House, 15-17 Eldon Street, London EC2M
7LD, the financial adviser and joint
broker to the Company
WH Ireland means WH Ireland Limited of 24 Martin
Lane, London EC4R 0DR, the nominated
adviser and joint broker to the Company
Whitewash Resolution means resolution 1 to be proposed at
the General Meeting as set out in the
Notice of GM
APPENDIX 3
Assumptions
Effect of the conversion of the Convertible Loan Notes on the
Concert Party's Interest in the Company
1. As at the Disclosure Date, the holdings of the Concert Party are set out below:
(a) Petrichor holds 103,094,546 Ordinary Shares, representing
31.40 per cent. of the Company's existing issued share capital;
(b) Jalapeño holds 8,497,500 Ordinary Shares, representing 2.59
per cent. of the Company's existing issued share capital; and
(c) Stephen P. Jackson holds 51,000 Ordinary Shares,
representing 0.02 per cent. of the Company's existing issued share
capital.
2. The earliest date upon which either Petrichor Partners or
Jalapeño may serve a notice to convert their respective Convertible
Loan Notes into Ordinary Shares is expected to be on or around 26
January 2021 (assuming that they each respectively deliver a
conversion notice to the Company on the date of issue of the
convertible loan note certificates, which are to be issued
approximately two business days after the General Meeting, subject
to the Resolutions having been passed. Conversion would then take
place on a date determined by the Company, being no later than ten
business days after the date of service of such conversion
notice).
3. Based on the assumptions below, conversion of the Convertible
Loan Notes would result in the issue to the Concert Party of up to
73,233,406 Ordinary Shares increasing the total holding of the
Concert Party to 184,876,452 Ordinary Shares representing
approximately 46.04 per cent. of the Company's Enlarged Ordinary
Share Capital:
(a) Conversion of the Convertible Loan Notes occurs on a date
determined by the Company, being no later than ten business days
after the date of service by either Petrichor Partners of Jalapeño
of a conversion notice. The earliest date upon which either
Petrichor Partners or Jalapeño may serve a notice to convert their
respective Convertible Loan Notes into Ordinary Shares is expected
to be on or around 26 January 2021 (assuming that Petrichor
Partners or Jalapeño each respectively deliver a conversion notice
to the Company on the date of issue of the convertible loan note
certificates, which are to be issued approximately two business
days after the General Meeting, subject to the Resolutions having
been passed);
(b) Petrichor Partners and Jalapeño elect to convert the full
principal amount of the GBP1,051,035 Convertible Loan Notes into
new Ordinary Shares at the Conversion Price;
(c) Petrichor Partners and Jalapeño elect to convert the
interest due into Ordinary Shares at the Conversion Price; and
(d) There are no changes to the Company's share capital prior to
the issue of all of the Conversion Shares.
4. The effect of the issue of the Conversion Shares,
representing approximately 22.31 per cent. of the Company's voting
share capital is set out in the table below:
Table 1: The Concert Party's maximum interest in the Company
Concert Party Current Percentage Conversion Maximum interest Percentage
member interest of Issued Shares* in Enlarged of Enlarged
in Ordinary Ordinary Ordinary Ordinary
Share Capital Share Capital Share Capital Share Capital
on conversion on conversion
of the Convertible of the Convertible
Loan Notes* Loan Notes
Petrichor 103,094,546 31.40 0 103,094,546 25.67
Jalapeño 8,497,500 2.59 3,549,020 12,046,520 3.00
Petrichor
Partners 0 0 69,684,386 69,684,386 17.35
Stephen P.
Jackson 51,000 0.02 0 51,000 0.01
Total 111,643,046 34.01 73,233,406 184,876,452 46.04
*The Concert Party's maximum interest set out in Table 1 above
is based on the assumptions set out in paragraph 3 above
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END
MSCUPUAWGUPGUQQ
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January 06, 2021 02:00 ET (07:00 GMT)
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