TIDMPPP
RNS Number : 0827E
Pennpetro Energy PLC
27 June 2023
Pennpetro Energy PLC
("PPP" or "Pennpetro")
Significant increased interest in oil leases in Gonzales County,
Texas and GBP300,000 Placing
London, 27 June 2023 - Pennpetro Energy PLC (LSE: PPP), an
independent oil and gas company focusing on production and
development in Gonzales County, Texas, USA, through its 100%
subsidiary, Nobel Petroleum USA Inc. ("Nobel"), has signed a series
of agreements with Millennium PetroCapital Corporation
("Millennium") to increase its stake in the Whistling Straits 5H
well from a 25% working interest ("WI") to a 100% WI with 75% net
revenue interest (" NRI ") and to assume operatorship of the well
with immediate effect in addition to 2,036.38 acres of oil
leases.
In addition, the Company has conditionally placed 6,000,000 new
ordinary shares of GBP0.01 each in the Company and 9,000,000
existing ordinary shares of GBP0.01 each in the Company transferred
by existing shareholders unconnected to any director, (together the
"Placing Shares") at a placing price of 2 pence each (the "Placing
Price") to raise GBP300,000 (before expenses) (the "Placing").
Highlights
-- GBP300,000 placing to fund expansion of oil activities in Texas
-- Acquisition of 100% WI (75% NRI) and operatorship in Whistling Straits 5H well
-- 100% acquisition of 10 tracts, increasing Gonzales footprint by 2,036.38 acres
-- Exclusive rights to 100% WI in two other adjacent developed wellbores
-- Company fully-funded to bring all wells into near-term production
Nobel also has the exclusive right to acquire a 100% WI in two
nearby Chalk Talk wells (Chalk Talk 1H and Chalk Talk 4H) for no
additional costs, if Nobel determines that production can be
restored to one or both wells within a 90 day evaluation period.
Initial production rates typically range from 100-400 barrels of
oil per day (" bopd "), based on unfracked analog wells within the
Austin Chalk Play for new wells. The Chalk Talk 1H well has
previously produced 55,000 barrels of oil between June 2020 and
July 2022 while the Chalk Talk 4H well produced 6,400 barrels of
oil between June 2021 and November 2021. Both wells were producing
at rates of approximately 15-20 bopd prior to being shut-in and
Nobel hopes to restore production to similar levels or better after
a thorough evaluation and contingent upon a well workover.
Oil production from Chalk Talk 1H and 4H wells can be sent to
the nearby surface facilities at the Whistling Straights 5H
well.
Nobel will conduct further testing of the Whistling Straits 5H
well, where strong oil shows were seen during drilling operations
in the Lower Austin Chalk interval, after undertaking some minor
re-engineering of the artificial lift system.
As previously reported, Millennium, as Operator, began the
testing operations began on Whistling Straits 5H well on 23 April
2023. The Operator unsuccessfully installed a jet pump to clean up
the well and until now has yet to recover all the load water
(drilling fluids) remaining in the well that was used during the
drilling process. Nobel's plans to change to an electrical
submersible pump (ESP), which has the benefits of a positive
displacement pump, to remove the remaining drill fluids to surface
and bring on the oil production.
Nobel will pay an additional US$70,000, in addition to its
original well commitment costs, to Millennium for the above
transaction plus an additional US$10,000 per month for rental of
the existing production facilities located at the Whistling Straits
5H well pad.
The Whistling Straits 5H well is the first well to be drilled
under its recently signed Participation, Development and Option
Agreement between Nobel and Millennium within the 250,000-acre
(1,011 square km) Area of Mutual Interest ("AMI") petroleum joint
venture in Gonzales County, Texas. The AMI is located about 290
miles (466 kilometres) due west of Houston and will provide PPP's
Nobel with a large inventory of low-risk development options in a
world class oilfield. The aforementioned assignment of interests
relative to the Whistling Straits 5H and other wells does not
affect the ongoing joint venture with Millennium and Nobel will
continue to review prospective development wells within the
AMI.
Tom Evans, Pennpetro Energy's CEO said: "This is an amazing deal
for Pennpetro, and we are delighted to have taken over operatorship
of the Whistling Straits 5H well in Texas. Replacing the jet pump
with an ESP should make a significant difference to removing the
nearly 10,000 barrels of drilling fluid still down the hole and
cleaning up the well. I'm also excited about the added potential to
own 100% of both the 1H and 4H wells and their ability of adding
oil to the 5H surface facilities in short order. This GBP300,000
placing also announced today, provides us with the necessary cash
on the balance sheet to do this work."
Further Details on Placing:
The Company would not have been able to satisfy its obligations
in full under the Placing by the issue and admission to the
Official List (standard listing segment) of the London Stock
Exchange's main market for listed securities (" Official List ") of
new ordinary shares without producing of an FCA approved
prospectus. The Company has therefore relied upon the support of
its existing Shareholders and is proposing to issue and admit
6,000,000 new ordinary shares (available under the Company's
existing headroom under the UK Prospectus Regulation as at 31 March
2023) on or around 4 (th) July 2023.
On the same date, it is also intended for the balance of the
Placing Shares to be provided other existing shareholders not
connected to any director, ("Existing Shareholders"), by way of a
transfer of 9,000,000 existing ordinary shares (the "Existing
Shares") held by them in order to settle the Placing in a timely
manner. For the avoidance of doubt, the transfer of the Existing
Shares involves no cash consideration being paid to the Existing
Shareholders. The transfer of these shares is expected to be made
on or around 4(th) July 2023. Further detail in respect of the
agreements being entered into between the Company and the Existing
Shareholders is set out below.
Use of Net Proceeds:
On raising these funds, Pennpetro has agreed with Millennium to
take over operatorship of the Whistling Straits 5H well and
continue the process of putting this well on test.
The balance of the funds will be used for general working
capital purposes.
Stock Lending Agreement:
The Existing Shares will be transferred for a nominal
consideration of GBP1 and will be documented in a stock lending
agreement between the Existing Shareholders and the Company (the
"Stock Lending Agreement").
Under the Stock Lending Agreement 9,000,000 new ordinary shares
will be issued to the Lenders as soon as reasonably practicable
subject to compliance by the Company with the UK Prospectus
Regulation, the Listing Rules and the Company's dealing policy. The
Company undertakes to make the necessary listing and admission
hearing applications to have those new ordinary shares admitted to
trading.
Related Party Transaction:
The Stock Lending Agreement is therefore considered not to be a
related party transaction , however, the directors for the purposes
of a Related Party Transaction (should it be deemed a related party
transaction), considers that the terms and conditions of the Stock
Lending Agreement are fair and reasonable, insofar as the
shareholders of the Company are concerned.
Completion of the new Placing Shares:
Completion of the Placing is conditional on, inter alia :-
6,000,000 ordinary shares of GBP0.01par value of the total
number of 15,000,000 Placing Shares, being admitted to listing on
the Official List (standard listing segment) and to trading on the
London Stock Exchange's main market for listed securities ("
Admission ") on or before 4 (th) July 2023 (or such later date as
may be agreed by the Company and the placing agent).
Admission, Settlement and Dealings in new Placing Shares:
An application will be made to the FCA and to the London Stock
Exchange Admission in respect of those 6,000,000 new ordinary
shares of GBP0.01 par value of out of the total number of Placing
Shares proposed to be issued on completion of the Placing. It is
expected that Admission will become effective, and that dealings in
such shares are expected to commence, at 8.00 a.m. on 4 (th) July
2023.
The rights attaching to the new Placing Shares will be uniform
in all respects and all of the new Placing Shares will rank pari
passu , and form a single class for all purposes with, the existing
issued shares of GBP0.01 value in the Company.
Total Voting Rights
Following Placement, the Company will have 100,449,089 ordinary
shares of GBP0.01 par value in issue, each with one vote per share.
The total number of voting rights in the Company is therefore
increased by 6,000,000 to 100,449,089. This figure of 100,449,089
may be used by shareholders in the Company as the denominator for
calculations to determine if they have a notifiable interest in the
share capital of the Company under the Disclosure Guidance and
Transparency Rules, or if such interest has changed.
-S-
This announcement contains inside information within the meaning
of Article 7(1) of (i) Regulation (EU) No 596/2014 of the European
Parliament and of the Council of 16 April 2014, as amended (the "EU
Market Abuse Regulation") and (ii) the EU Market Abuse Regulation
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018.
For further information visit www.pennpetroenergy.co.uk or
follow us on twitter @pennpetro or contact:
Pennpetro Energy PLC:
Tom Evans, CEO tme@pennpetroenergy.com
Brokers:
Zeus Capital
Simon Johnson +44 (0) 207 614 5900
Peterhouse Capital Limited
Lucy Williams +44 (0) 20 7469 0930
Duncan Vasey +44 (0) 20 7220 9797
Flagstaff Strategic and Investor +44(0) 207 129 1474
Communications pennpetro@flagstaffcomms.com
Tim Thompson
Alison Allfrey
Anna Probert
NOTES TO EDITORS:
Pennpetro Energy is an independent oil and gas company focusing
on production in the Gonzales Oil Field in Texas, USA. Shares in
the company were admitted to the Official List of the London Stock
Exchange by way of a Standard Listing on 21 December 2017 with the
ticker symbol " PPP " . Its wholly owned subsidiary, Nobel
Petroleum USA Inc. has a Participation, Development and Option
Agreement and Joint Operating Agreement with Texas based Millennium
PetroCapital Corporation over a 250,000-acre Area of Mutual
Interest in Gonzales County, Texas, aimed at exploiting the
prolific proven Austin Chalk oil and gas play. Pennpetro Energy has
also recently signed a conditional binding agreement to conduct a
new 3D seismic survey on the Horse Hill Oil Field near London's
Gatwick Airport which paves the way to drilling the next production
well (HH-3) for 49% of the revenue of this proposed well.
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END
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