Disposal and Notice of General Meeting
October 13 2010 - 10:04AM
UK Regulatory
TIDMOHM
RNS Number : 3500U
Offshore Hydrocarbon Mapping PLC
13 October 2010
13 October 2010
Offshore Hydrocarbon Mapping plc ("PLC", "Company" or "Group")
PLACING OF 20,000,000 NEW ORDINARY SHARES AT 10 PENCE PER SHARE
DISPOSAL OF
OHM LIMITED AND OHM SURVEYS SDN BHD
AND
NOTICE OF GENERAL MEETING
The Directors of Offshore Hydrocarbon Mapping plc ("PLC") are pleased to
announce that, further to the announcement made on 22 September 2010, the
Company has conditionally agreed to sell OHM Ltd and OHM Surveys Sdn Bhd to a
company controlled by Sector Asset Management and its affiliates ("Sector") and
Euro Trans Skips AS ("ETS")(together the "Concert Party") for a consideration of
$150,000 (the "Disposals"). At the same time Sector and ETS have conditionally
subscribed for 9,000,000 Ordinary Shares in aggregate at 10 pence per share
representing a premium of 60 per cent. to the closing mid-market price on 12
October 2010 (the "First Placing") and have conditionally agreed to subscribe
for a further 11,000,000 Ordinary Shares at the same price (the "Placing"). In
aggregate, the First Placing and the Placing are expected to raise GBP2.0
million (GBP1.8 million after expenses) for the Company.
The First Placing is conditional only upon admission of the First Placing Shares
to trading on AIM. Accordingly, application will be made for the First Placing
Shares to be admitted to trading on AIM, which is expected to take place on 19
October 2010. Subject to admission of the First Placing Shares to AIM, the
Concert Party holds 51.11 per cent. of the Company's issued share capital
(including the First Placing Shares). The members of the Concert Party are
deemed to be acting in concert by the Panel. In order to complete the First
Placing and the Placing, the Panel has agreed to a waiver of the requirement for
the Concert Party to make a general offer for the Company for the purposes of
Rule 9 of the City Code following written confirmations consenting to such
waiver from the Independent Shareholders who hold in excess of 50 per cent. of
the Company's voting rights, excluding those of the Concert Party.
The Disposals and the Placing (together the "Proposals") are conditional, inter
alia, upon Shareholder approval being obtained. Due to the size of the
Disposals in relation to the Company, the Directors are required to seek
Shareholder consent to the Disposals for the purposes of AIM Rule 15. In
addition, in order to effect the Placing the Directors will seek the required
authorities under the Companies Act 2006. Accordingly, the Company will shortly
dispatch a circular to Shareholders convening a general meeting of the Company
to be held on 1 November 2010 (the "Circular"). In addition, the Circular will
shortly be available to view on the Company's website, www.ohmrsi.com. The
Circular contains further details of the background to and reasons for the
Disposals and the Placing and sets out in further detail why the Board considers
the Proposals to be in the best interests of Shareholders as a whole. Subject,
inter alia, to Shareholder consent to the Proposals being obtained at the
General Meeting, the Disposals are expected to be completed on 2 November 2010
and the Placing Shares are expected to be admitted to trading on AIM on 2
November 2010.
In connection with the Proposals, the Company has entered into the Subscription
Agreement and the Sale Agreement and will also enter into the Asset Transfer
Agreement, the Services Agreement and the Relationship Agreement. Further
details of these agreements are set out in the Circular. The Concert Party is
deemed to be a related party for the purposes of the AIM Rules and accordingly
the entering into of the Subscription Agreement, the Sale Agreement, the
Services Agreement and the Relationship Agreement (together the "Related Party
Agreements") are all deemed to be related party agreements for the purposes of
the AIM Rules. The Concert Party has undertaken not to vote in relation to the
Independent Shareholder Resolutions. The Board, insofar as it is required for
the purposes of the AIM Rules in relation to related party transactions, has
sought the advice of the Company's Nominated Adviser, KBC Peel Hunt.
The Directors, having consulted with KBC Peel Hunt in respect of the Related
Party Agreements, consider such agreements to be fair and reasonable insofar as
Shareholders are concerned. In providing its advice KBC Peel Hunt has relied
upon the Directors' commercial assessments.
Current trading and prospects
CSEM acquisition revenues for the second half of the financial year, 1 March to
31 August 2010, improved substantially over the first half from GBP1.6 million
to GBP4.8 million. This reflected the increased vessel utilisation enjoyed by
the OHM Leader associated with data acquisition projects in Asia Pacific,
notably for Reliance Industries, Petrogas and Karoon Energy. Notwithstanding
this improvement in H2 CSEM acquisition, activities remain substantially loss
making at the operating level due to the high fixed costs associated with
leasing and operating the vessels.
WISE revenues and revenues from seismic inversion business remained
substantially flat in the second half of the year to 31 August 2010 compared to
the first half at GBP0.35 million and GBP1.39 million respectively.
OHM Group revenues for the year to 31 August 2010 are expected to be
approximately GBP9.9 million, compared to GBP9.2 million for the 2009 financial
year, which represents a modest 7 per cent. increase.
The EBITDA loss for the Group for the six months to 31 August 2010 will be in
the GBP2.8 to GBP3.3 million range compared to an EBITDA loss (before
exceptional charges) of GBP2.8 million for the six months to 28 February 2010.
The exceptional charges in the first half of the financial year related to a
GBP2.14 million charge on conversion of vessel charter commitments into shares
following the General Meeting held on 9 September 2009.
The Group's cash balance at 31 August 2010 was GBP3.44 million (compared to
GBP1.38 million at 28 February 2010) and includes the benefit of approximately
GBP1.90 million of payments deferred by ETS from OHM Ltd which are due under the
amended charter agreements.
The figures for the six months to 31 August 2010 are unaudited and have yet to
be reviewed by the Group's independent auditors.
Following Completion, management attention will be directed towards growing the
technology and consulting business of the Remaining Group. Several key areas
will be targeted, including:
· Continued development of a fully integrated seismic and CSEM
interpretation environment in order to capitalise on the Company's WISE
integration strategy;
· Investment in sales and marketing resources and activities to accelerate
revenue growth in the Company's seismic inversion business unit;
· Establishment of the Remaining Group as the only independent and
integrated CSEM processing supplier, a unique position in the geophysical
services industry which can be leveraged in a number of key areas; and
· Comprehensive review of overheads in the Remaining Group with a view to a
reduction in overheads and an increase in overall margins.
Seismic data remains the geophysical tool of choice for subsurface exploration
and exploitation of oil and gas resources. However, the combination of
non-seismic data (such as well-logs, CSEM and MT) adds value to seismic and is
becoming increasingly important too in areas where seismic alone provides an
incomplete or ambiguous result. The Remaining Group, with its expertise in
seismic, well-logs, CSEM and MT processing and interpretation is strongly
positioned to take advantage of these integration opportunities.
Dr. Lucy MacGregor, PLC CTO commented: "The value of CSEM and MT surveying is
realised only when these data are properly integrated with well and seismic
information. This transaction creates a unique and independent consulting
organisation, with the technology and experience to undertake high end seismic
and well-driven reservoir characterisation projects but also with a world-class
suite of tools and expertise to process, interpret and integrate electromagnetic
data."
Contacts:
+---------------------------------------+---------------------+
| Offshore Hydrocarbon Mapping plc | www.ohmrsi.com |
+---------------------------------------+---------------------+
| Richard Cooper - Chief Executive | 0870 429 6581 |
| Officer | |
+---------------------------------------+---------------------+
| Bob Auckland- Finance Director | 0870 429 6581 |
+---------------------------------------+---------------------+
| KBC Peel Hunt (Nominated adviser & | |
| Broker) | |
+---------------------------------------+---------------------+
| Julian Blunt / Simon Brown / Harry | 020 7418 8900 |
| Florry | |
+---------------------------------------+---------------------+
| Aquila Financial Ltd (PR) | |
+---------------------------------------+---------------------+
| Peter Reilly | 0118 979 4100 |
+---------------------------------------+---------------------+
Capitalised terms used, but not defined, in this announcement have the same
meaning as given to them in the Circular unless the context requires otherwise.
KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for the Company in
relation to the First Placing and the Proposals and will not be responsible to
any person other than the Company under the Financial Services and Markets Act
2000, the rules of the Financial Services Authority or otherwise for providing
the protections afforded to its clients or for advising any other person in
relation to the contents of this announcement, the Proposals or any matter,
transaction or arrangement referred to herein. KBC Peel Hunt Ltd is not making
any representation or warranty, express or implied, as to the contents of this
announcement or the Circular.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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