TIDMMNRG
RNS Number : 6867B
MetalNRG PLC
09 October 2020
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
9(th) October 2020
MetalNRG plc
(The "Company" or "MetalNRG")
OIL & GAS ACQUISITION
MetalNRG plc (LON:MNRG) the natural resource investing and
exploration company is pleased to inform the market that, having
completed due diligence, its subsidiary joint venture undertaking,
BritNRG Limited ("BritNRG"), has signed a Sale and Purchase
Agreement with Mr Rupert Lycett Green to acquire the entire issued
share capital of Sunswept Enterprises Limited ("Sunswept") and its
subsidiaries. Completion will occur in the following weeks, subject
to certain conditions including confirmation of no objection to the
change of control of Sunswept from the UK Oil and Gas
Authority.
BritNRG will become MetalNRG's special purpose vehicle focused
on energy opportunities and eventually it will be owned 50% by
MetalNRG and 50% by international private investors, who will form
part of BritNRG's board of four directors and an experienced
management team. MetalNRG will have a casting vote at Board level
in case of tied voting.
Following completion of the acquisition and at current modest
production, Sunswept is expected to be net cashflow positive at
circa $43 bbls/day which represents the current market level.
The initial investment made by MetalNRG in BritNRG will be via a
convertible loan note which will convert into BritNRG shares once
all regulatory approvals have been obtained.
The convertible loan note entered into by MetalNRG and BritNRG
is for a total amount of GBP475,000 payable in 3 tranches. The
first tranche of GBP25,000 was paid upon signing of the heads of
terms, as announced to the market previously, the second tranche of
GBP275,000 is payable within the next few weeks and a final tranche
is due to be paid in December 2020.
The total working capital investment in BritNRG via MetalNRG's
convertible loan note and the private investor group will be
GBP750,000, which will enable BritNRG to meet purchase commitments
and all its financial requirements to maintain the current
operations and priority interventions on a stable footing for the
next 18 months.
The gross transaction cost for Sunswept's issued share capital
is GBP1,900,000; however, the net purchase price is expected to be
circa GBP150,000 after settlement of a director loan and associated
corporation tax consolidation. This represents a very low entry to
an onshore oil and gas producing asset, fully in line with the
MetalNRG strategy.
Under the view of current revenues and reserves/production
forecasts, the fair business value post-completion is expected to
be significantly higher than the net purchase price also in
consideration of the new working capital investment of GBP750,000,
which taken all together represent a compelling growth opportunity
for MetalNRG shareholders.
Importantly, the funding for the convertible loan note by
MetalNRG will not require it to issue new or additional shares; the
funding is being met by existing cash resources and is therefore
non-dilutive for existing shareholders.
The Sunswept Acquisition
Sunswept's subsidiaries have interests in the following UK
onshore licences: PL199 (95%, Operator); PL215 (50%); EXL141 (100%,
Operator); EXL294 (100%, Operator); PEDL090 (50%, Operator); and
PEDL209 (28%). The producing licences were first commissioned and
operated by BP in the mid-1980s. The UK Midlands basin activity
goes back to the pre-war era.
The Sunswept portfolio includes three producing licences and
three exploration permits in Lincolnshire. The producing assets
are: The Whisby Field, currently producing from: Whisby #4 well at
c. 55bbls/day, Whisby #6 well at c.40bbls/day, temporarily shut in
(awaiting wax removal workover), The Reepham Field, with one well,
currently shut-in and the Newton on Trent Field, with one well,
currently shut-in.
Oil has been produced from the thin basal Westphalian sands,
overlying oil-bearing but unproductive Dinantian Carbonate in
Whisby and Reepham, with production in Newton from Carboniferous
Crawshaw and Longshaw sands.
The produced fluids are separated and treated at a central
Whisby processing plant. Stabilised oil is transported by tanker
for sale at the Immingham dock and thereafter to the Chevron's
Humber Refinery.
The acquisition of Sunswept and its licence portfolio gives
BritNRG the opportunity to apply modern seismic surveys,
geophysical analysis as well as advanced reservoir study methods
not applied by the current operator, which may lead to further
development and appraisal opportunities.
Rolf Gerritsen, MetalNRG's CEO, commented "I am pleased to be
able to report our progress on our first energy transaction and
look forward to updating the market on the operational progress
that BritNRG will make over the coming months. This is a first step
for us in the energy sector and we look forward to developing
BritNRG together with the private investors."
The person who arranged for the release of this information is
Rolf Gerritsen, chief executive
officer of the Company.
For further information, please contact:
METALNRG PLC - Rolf Gerritsen (Chief Executive +44 (0) 20 7796
Officer) 9060
Joint Broker PETERHOUSE CAPITAL LIMITED - +44 (0) 20 7469
Guy Miller/ Duncan Vasey/Lucy Williams 0930
--------------------
Joint Broker SI CAPITAL- Nick Emerson +44 (0) 1483 413500
--------------------
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END
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