TIDMEO.
RNS Number : 0599F
EnCore Oil PLC
18 April 2011
Press Release
For immediate release: 18 April 2011
EnCore Oil plc ("EnCore" or "the Company")
Flotation of New Exploration Company
Highlights
-- Subsidiary company which will be assigned EnCore's
exploration assets ("Exploration Assets") to be separately quoted
on AIM
-- New company to be known as XEO Exploration plc
-- Proposed institutional placing and admission to AIM, followed
by an offer to qualifying EnCore shareholders to provide the
opportunity for direct participation in the XEO fundraising
-- Proposed EnCore Board changes upon successful flotation of
XEO
Exploration Assets flotation and proposed fundraising
EnCore (LSE: EO.) announces that the Company is planning for a
subsidiary company, which will be assigned the Exploration Assets,
to be floated on AIM. The new company will be known as XEO
Exploration plc ("XEO"). Subject to regulatory approvals and a
successful institutional placing, XEO is expected to be admitted to
AIM around the end of May 2011.
EnCore is in the process of transferring the Exploration Assets
listed below into XEO, subject to receiving the necessary partner
and regulatory approvals. The exact percentage shareholding of
EnCore in XEO will depend upon the final amount of funds raised by
XEO.
In addition to their indirect interest in XEO through EnCore's
remaining holding, the Company plans to offer qualifying EnCore
shareholders the opportunity to subscribe for shares in XEO
directly at the institutional placing price. The offer to EnCore
shareholders will be made around the time of XEO's admission to AIM
and close shortly following admission.
EnCore assets to be transferred to XEO
------------------------------------------------------------------------------
Licence Block Prospect XEO Equity* Operator Partners
-------- --------------- ------------ ------------ --------- ------------
P.1769 14/29e, 20/4c, Hoylake 50% XEO* Endeavour
20/5f
-------- --------------- ------------ ------------ --------- ------------
P.1463 14/30a Tudor Rose, 40% XEO* Nautical,
Buffalo Endeavour,
EnQuest
-------- --------------- ------------ ------------ --------- ------------
P.1655 15/21g Spaniards 40% XEO* Nautical,
Serica
-------- --------------- ------------ ------------ --------- ------------
P.1475 113/29c & Merrow 50% Nautical XEO*
113/30
-------- --------------- ------------ ------------ --------- ------------
*subject to partner and regulatory approval
XEO will also have the option to acquire the following interests
currently held by EnCore and Echo Exploration Ltd.
XEO will have the option to acquire the following licence
from EnCore
--------------------------------------------------------------------------
Licence Block XEO Equity* Proposed Operator Partners
--------- ------------- ------------ ----------------------- ---------
28/5, 28/10a
P.1812 & 29/1d 100% XEO*
--------- ------------- ------------ ----------------------- ---------
XEO will have the option to acquire the following licence
interests from Echo Exploration Ltd
--------------------------------------------------------------------------
Licence Block XEO Equity* Proposed Administrator Partners
--------- ------------- ------------ ----------------------- ---------
P.1866 13/28b 50% Echo XEO*
--------- ------------- ------------ ----------------------- ---------
P.1870 15/21d 50% Echo XEO*
--------- ------------- ------------ ----------------------- ---------
P.1876 22/5c 50% Echo XEO*
--------- ------------- ------------ ----------------------- ---------
*subject to partner and regulatory approval
In addition to the licences above, XEO has the potential option
to acquire a number of UK 26(th) Round licences, yet to be awarded
by DECC, that are under further environmental review.
Rationale behind the flotation
The EnCore Board has considered a number of scenarios for
progressing the exploration portfolio and has concluded that
placing those assets into a separately quoted company is the most
beneficial route forward for the following reasons:
-- EnCore's future focus is now to be directed towards its two
main assets, Catcher and Cladhan, which are in the latter stages of
appraisal and will soon be moving into the development stage of
their lifecycles.
-- A very significant proportion of the value of the Company is
in Catcher and Cladhan. Therefore, the Board did not wish to dilute
shareholders' exposure to these assets by an EnCore fundraising for
a high-impact exploration programme covering the Exploration Assets
with the attendant risks.
-- Moving forward, EnCore's existing and any future capital/debt
can be targeted directly at the development assets.
-- Existing EnCore shareholders will remain exposed to any
success from the Exploration Assets through EnCore's shareholding
in XEO. However shareholders who wish to have increased exposure to
a risked exploration programme will also be offered the opportunity
to participate in the offer at the institutional placing price.
Proposed XEO Board and EnCore Board of Director Changes
On completion of the institutional placing and admission of XEO
to AIM, Eugene Whyms, currently Chief Financial Officer (CFO) and
Company Secretary will become a Non-Executive Director of EnCore
and take up the role of Chief Executive Officer (CEO) of XEO. Alan
Booth, CEO of EnCore, will assume the additional role of a
Non-Executive Director of XEO. Chris Johnson, currently Group
Financial Controller will become CFO of EnCore, whilst James Clark,
currently Commercial Director of EnCore will assume the additional
role of Company Secretary. All these appointments are scheduled to
occur concurrently with the successful admission to AIM of XEO.
Additional appointments to the XEO Board will include the
appointment of EnCore's Business Development Manager, Peter Schwarz
as Chief Operating Officer (COO), and the appointment of
experienced banking and oil industry executive, John Mapplebeck as
Non Executive Chairman of XEO.
EnCore expects the XEO prospectus to be mailed to shareholders
during the week commencing 30 May 2011.
Matrix Corporate Capital LLP is acting as nominated adviser and
joint broker and Westhouse Securities Limited as joint broker in
connection with XEO's admission to AIM.
Commenting on the formation of the new company, EnCore Chief
Executive Alan Booth said:
"EnCore has considered a broad range of options available to it
at this important time in the Company's development. Clearly the
significant discoveries at Catcher and Cladhan must take priority
in terms of access to our capital. At the same time, we also firmly
believe that our expanding exploration portfolio deserves
appropriate funding to unearth any value that it may contain.
However, we recognise that the risk profile of these assets is
higher than the ongoing evaluation of the Catcher area and Cladhan.
Whilst farming out the exploration portfolio was one possible
route, it was recognised that the remaining equity levels would
likely be in the order of one third of current levels. The farm out
process would also likely place timing and control in the hands of
third parties, who might perceive EnCore to have limited options
with regard to exploration funding. We believe that the chosen
route should allow us greater control over our own destiny, whilst
enabling us to expose our current and new shareholders to higher
impact and more material equity levels in those prospects in which
we will seek to invest.
"Both companies will continue to benefit from the people and
skills that have been so successfully deployed in building the
asset base to date at EnCore, and both companies will be co-located
at the current Baker Street offices. Whilst there can be no
guarantee that we will be as successful again, we would like to
ensure that our shareholders at least have a choice as to whether
they wish to have ongoing exposure to high-impact exploration in
the UK offshore in addition to their indirect interest through
EnCore's shareholding in XEO."
For further information, please contact:
EnCore Oil plc www.encoreoil.co.uk
Alan Booth, Chief Executive Officer +44 (0)20 7224 4546
Eugene Whyms, Chief Financial Officer
Yvonne Fraser, Investor Relations Manager +44 (0)7957 241 408
Westhouse Securities Limited
Tim Feather +44 (0) 20 7601 6100
Matthew Johnson
Notes to Editors:
EnCore (LSE:EO.) is an oil and gas exploration and production
(E&P) company quoted on AIM.
EnCore has a balanced portfolio of offshore assets, based mainly
in the UK Continental Shelf (UKCS) and a significant equity holding
in AIM listed Egdon Resources plc (LSE: EDR).
EnCore has an experienced and proven management team, a number
of whom were responsible for the discovery of the Buzzard field in
the UK North Sea, which currently produces over 10 per cent. of the
UK's total oil production.
All EnCore's commercial and material technical evaluations are
undertaken in-house by the EnCore team. This brings both continuity
to the management and development of the assets and an ownership
that is vital to unearth the best and most creative new ideas and
opportunities.
www.encoreoil.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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