Attis Oil and Gas Ltd Proposed Disposal of Austin Field (3342T)
July 17 2020 - 3:00AM
UK Regulatory
TIDMAOGL
RNS Number : 3342T
Attis Oil and Gas Ltd
17 July 2020
Attis Oil & Gas Ltd / Index: AIM / Epic: AOGL/ ISIN:
VGG6622A1057 / Sector: Oil and Gas
17 July 2020
Attis Oil & Gas Ltd ('the Company')
Proposed Disposal of Austin Field, being the Company's remaining
operating asset,
and Notice of General Meeting
Attis today announces that it has agreed the sale of its
remaining wholly owned and operated asset, the Austin Field,
subject to shareholder approval (the "Proposed Disposal").
The Company has been conducting an asset sale strategy, as
announced on 2 January 2020. The Company announced on 11 February
that i t had sold its interest in the Bivins 115 Lease in the Red
Cave formation in the Texas Panhandle for a consideration of
$50,000 paid in cash. The Company acquired the Bivins 115 Lease in
October 2019 for a consideration of $23,000.
Further, the Company announced on 12 May 2020 that it had
disposed of its subsidiary company, Northcote Cleveland LLC, which
held the Zink Field Assets, for a consideration of $250,000 payable
in cash in installments, and the disposal of its interests in the
Fort Worth Field Assets for a nominal amount and the relinquishment
of the bond associated with the field for the assumption by the
acquiror of the plugging and abandonment ("P&A") and tax
liabilities on the 98 wells on the field.
The Board has reviewed the recent performance of the Austin
Field Assets. Taking into account the level of ongoing maintenance
cost required to keep the assets in production, coupled with recent
volatility in global oil and gas prices, the revenue generated from
the sale of oil and gas production at the Austin Field Assets,
while potentially sufficient to pay the ongoing overheads of the
Company, will not produce surplus cash to re-invest in new assets
or additional production wells and therefore the Board has
concluded that a sale of these assets is in the best interests of
Shareholders. This will free up cash and management time to allow
the Board to pursue other opportunities to build value for
Shareholders. The cash proceeds of the Disposal will be aggregated
with the Company's existing cash resources as set out in the
announcement of 15 June 2020.
The Company's wholly owned subsidiary, Mayan Energy USA, LLC,
has entered into a sale and purchase agreement, with Esparza Energy
Holdings LLC, for the sale of its Austin Field Assets for a
consideration of $200,000 payable in monthly instalments equal to
50% of the gross revenue generated from oil and gas sales over a
period no longer than 36 months. Any amount not paid at the end of
the term is owed as a lump sum to the Company. Mayan Energy USA,
LLC will retain a security interest in the wells and the production
from the wells until the consideration is paid. Failure to maintain
the leases or a shut-in the wells that jeopardizes the leases
provides Mayan Energy USA, LLC with the right to void the
transaction. The only condition of completing the sale is the
receipt of Shareholder approval, as further detailed below, and
therefore completion is expected shortly following the General
Meeting.
As at 30 June 2019, the book value of the Austin Field Assets
was $742,000 and the assets made an operating profit of $17,043 for
the 6 months ended 30 June 2020. In accordance with AIM Rule 15,
the Proposed Disposal will constitute a fundamental change of
business of the Company. On Completion, the Company would cease to
own, control or conduct all or substantially all, of its existing
trading business, activities or assets.
Completion of the Proposed Disposal will be subject to
Shareholder approval by way of an Ordinary Resolution at a General
Meeting as it is deemed a fundamental change of business under the
AIM Rules for Companies. The Disposal requires the approval of more
than 50% of the Ordinary Shares voted at the General Meeting.
Following completion of the Proposed Disposal, therefore, the
Company will become an AIM Rule 15 cash shell and as such will be
required to make an acquisition or acquisitions which constitutes a
reverse takeover under AIM Rule 14 on or before the date falling
six months from completion of the Proposed Disposal failing which,
the Company's Ordinary Shares would then be suspended from trading
on AIM pursuant to AIM Rule 40. Admission to trading on AIM would
be cancelled six months from the date of suspension should the
reason for the suspension not have been rectified.
A notice convening a General Meeting is being finalised and will
be posted to shareholders shortly; a further announcement will be
made once this has been done.
**ENDS**
For further information visit www.attisog.com or contact the
following:
Paolo Amoruso Attis Oil & Gas Ltd + 1 713 869 1544
Roland Cornish Beaumont Cornish Ltd +44 20 7628 3396
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James Biddle Beaumont Cornish Ltd +44 20 7628 3396
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Duncan Vasey
Lucy WIlliams Peterhouse Capital Limited +44 20 7220 9792
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END
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