TIDMMYN
RNS Number : 5274X
Mayan Energy Limited
30 April 2019
Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 /
Sector: Oil and Gas
30 April 2019
Correction: This RNS replaces the announcement no 4775X released
at 7.00am on the 30 April 2019. The GBP1.33m acquisition cost to be
settled via issue of 952,197,460 new Ordinary Shares in Mayan at
0.14p per share ("Consideration Shares") represents 25.2% of the
enlarged issued share capital following the Placing and
Acquisition, and following the Placing, the Attis Shareholders will
hold 28.31% in Mayan equity. The full corrected announcement is
issued below.
Mayan Energy Ltd ('Mayan' or 'the Company')
To Acquire 100% of Attis Oil & Gas Ltd, Directorate Change,
Capital Raise and Name Change
Mayan Energy Ltd (London AIM: MYN) is pleased to announce that
it has entered into a conditional share purchase agreement to
acquire 100% of Attis Oil & Gas Limited and its subsidiaries,
affiliates and related entities (collectively referred to as
"Attis"), a proven US oil & gas operator which holds a 50%
interest in the Fort Worth Field, TX and operates 98 wells across
5,100 acres in the Fort Worth Basin ('the Acquisition'). In
addition, Attis has already been instrumental in successfully
optimising production at Mayan's Austin Field and is currently
reworking the Company's Zink Ranch Field. The consideration for the
Acquisition is GBP1.33m to be satisfied by the issue of 952,197,460
new Ordinary Shares at a price of 0.14 pence per Ordinary Share
("Consideration Shares"). The Acquisition is conditional on
completion of the Placing, as detailed below.
The Company also intends to raise up to GBP700,000 gross
proceeds ("Placing") via the issue of new ordinary shares of no par
value in the capital of the Company (the "Placing Shares") to fund
further field enhancement work at Austin Chalk, initiation of
operations at Zink Ranch, a five well workover programme at the
Fort Worth Field, and sub-surface studies at Zink Ranch and Austin
Chalk. The Acquisition is conditional on the completion of the
Placing.
Key Shareholders of Attis including the incoming executive
director have indicated their intention to subscribe for Placing
Shares in the Placing following publication of this Announcement.
The details of these subscriptions will be announced separately in
due course.
Following the Acquisition, it is proposed that the Company
change its name to Attis Oil and Gas Limited. A further
announcement will be made once the timing for this change is agreed
with a new TIDM and website address to be announced at that
time.
Overview:
-- Acquisition to transform combined group's revenue / cash flow
profile and provides Mayan with an in-house, experienced, operating
team
-- Attis has a 50% interest in 98 wells across 5,100 acres in
the Fort Worth Field, Texas which currently produces 41 boepd net
to Attis
-- As operator of the Fort Worth Field asset, Attis generates
approximately US$34,000 per calendar month in additional operating
revenue
-- Attis' oilfield services division, which also provides third
parties with oilfield services, opens up an additional business
line with growth potential
-- Acquisition increases Mayan's acreage and net production to
8,841 acres and 98 boepd respectively, based on Mayan current net
production of 57 boepd and transforms Mayan into a cash flow
positive operator:
o Pro forma group turnover of approximately US$190,000 per month
(based on current combined production and Attis operator
revenues)
o Economies of scale savings generated across the new entities
with initial combined company cost savings of c. US$20,000 per
month due to elimination of third party operator charges for
Mayan's Zink Ranch and Austin fields
-- Thom Board, Attis' CEO and current Mayan technical advisor
will join Mayan as its Chief Operating Officer and executive
director - Mr. Board will be in charge of all of the day to day
operations of the combined entities in the US
-- GBP1.33m acquisition cost to be settled via issue of
952,197,460 new Ordinary Shares in Mayan at 0.14p per share
("Consideration Shares") representing 25.2% of the enlarged issued
share capital following the Placing and Acquisition.
-- Attis shareholders have indicated their intention to invest GBP165,000 in the Placing.
Paolo Amoruso, Chairman of Mayan, said, "The rationale for this
merger is one of operational efficiency, economies of scale,
increased acreage and production, exposure to a service provider
and the creation of a cash flow positive platform from which to
grow the enlarged group further.
"Over the last six months, we have undertaken a systematic
review of Mayan's portfolio of assets, engaged Attis to rework our
Austin Field and now implement an optimisation programme at Zink
Ranch. During this time, we focused on improving our internal
organisation and balance sheet and have been extremely impressed
with Mr. Board and his operating team. We quickly recognised that
to transition to the next phase we needed an experienced
operational team and we jointly recognised that the combined
entities would strongly benefit from an amalgamation in order to
build a solid, profitable oil and gas production company. This is
an exciting period for Mayan, as we transition away from the asset
review period and begin our next phase of transformation with work
programmes underway across the enlarged group's portfolio. I look
forward to providing further updates on our progress."
Rationale of the transaction:
As Mayan transitions to assume full operator status in both
Texas and Oklahoma, the acquisition of Attis is highly beneficial
as it provides a US based oilfield operations team that will be
crucial in the development of the existing fields, as well as
expertise in the assessment and acquisition of additional
properties. It is expected that the integration of Attis into the
Mayan structure will deliver an initial direct cost saving of c.
US$20,000 per month due to the removal of third-party operator
charges that currently apply at the Zink Ranch and Austin
fields.
Following the results reported from Mayan's Austin Field on
15(th) April 2019, the combined group is expected to generate
revenue of approximately US$190,000 (US$60 WTI/$US2.60 NYMEX Gas)
per calendar month. The combined acreage of the group following the
Acquisition will total 8,481 acres which is comprised of 1,378
acres at the Austin Field, TX; 1,640 acres at Zink Ranch, OK; and
5,153 acres at the Fort Worth Field, TX.
The combined group's existing acreage offers near term
production upside including the recent workover of six wells at the
Austin Field. In addition, a five well workover programme is
planned for May 2019 at the Attis operated Fort Worth Field, TX in
tandem with an initial field operations clean up at Zink Ranch
which has commenced. The combined Mayan /Attis development platform
is expected to generate a pipeline of opportunities through
operating contracts and new field development.
Further, Attis has developed an oilfield service function that
is beginning to grow into a standalone business. This function will
allow for diversification of services across business lines and
provide opportunities to grow the technical and operational
capacity in-house in the near future.
Attis Summary
Attis is a 50% JV owner of the Fort Worth Field, with APEG Palo
Pinto LP. The Fort Worth Field, TX is operated by Attis which
currently produces 580 MCFPD of gas and 5bbl. of oil per day - net
41 boepd to Attis. In addition, Attis currently generates US$34,000
per month of operational income from operating the Fort Worth
JV.
The Attis operating team currently provides a wide range of
operational services for 98 owner operated oil & gas wells in
the Fort Worth Field, Texas Panhandle and West Texas where it is
also executing a well workover and development plan. As previously
announced, Attis currently operates the Austin and Zink Ranch
fields for Mayan.
The Attis operations team is headquartered in Borger, TX with a
field office in Mineral Wells, TX. Attis' employees are
complemented by additional field personnel, including operations
managers, pumpers, roustabout, accounting, reporting and geology
personnel.
For the year ended 31 December 2018, being the latest period
available, Attis made a loss before tax of US$35,153 on turnover of
US$53,405 and had net assets of $195,000. During the first quarter
of 2019 Attis generated turnover of approximately US$299,000 and
US$46,000 in free cashflow.
Directorate Changes
Thom Board, CEO of Attis, will join the board of Mayan as
Executive Director and will be appointed the Chief Operating
Officer and CEO of US operations and Russell Lamming, CEO of
AIM-traded Keras Resources PLC, will be appointed as a
non-executive director. Both appointments are subject to Nomad due
diligence checks and approval which have commenced. At the time of
their appointment, JD McGraw, a Non-Executive Director, will retire
from the Mayan board.
Executive Share Option Scheme
Following completion of the Acquisition, it is the intention of
the Board to put in place an executive incentive plan for up to 10%
of the enlarged share capital. Further details of the plan and
awards of Executive Options will be announced in due course.
Details of the Placing
The Company intends to raise up to GBP700,000 gross proceeds via
a placing of 500,000,000 new ordinary shares of no par value in the
capital of the Company (the "Ordinary Shares") (the "Placing
Shares") with certain existing and new investors and Directors of
the Company at a price of 0.14p per share (the "Placing").
The funds raised by the Placing will be used for the further
field enhancement at Austin Chalk, initiation of Zink Ranch
operations, a five well workover programme at the Fort Worth Field
and sub-surface studies at Zink Ranch and Austin Chalk. The Placing
is expected to close no later than 30 April 2019. Details of the
number of Placing Shares to be subscribed for in the Placing will
be announced as soon as practicable after the close of the
Bookbuild.
The Attis shareholder group has indicated their intention to
participate in the Placing to the extent of GBP165,000 cash
subscription. Following the Placing, the Attis Shareholders will
hold 28.31% in Mayan equity.
Special note concerning the Market Abuse Regulation:
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
("MAR"). Market soundings, as defined in MAR, were taken in respect
of the Subscription, with the result that certain persons became
aware of inside information, as permitted by MAR. That inside
information is set out in this announcement. Therefore, those
persons that received inside information in a market sounding are
no longer in possession of inside information relating to the
Company and its securities.
**ENDS**
For further information visit www.mayanenergy.co.uk or contact
the following:
Charlie Wood Mayan Energy Ltd +44 20 7236 1177
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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Frank Buhagiar St Brides Partners Limited +44 20 7236 1177
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Gaby Jenner St Brides Partners Limited +44 20 7236 1177
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Colin Rowbury Novum Securities Limited +44 20 7399 9400
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Notes:
Mayan Energy Limited is an AIM listed (London Stock Exchange)
North American based energy company. It is actively pursuing a
primary recovery oil strategy focused on re-stimulating wells
within mature producing basins with immediate cash flow leveraging
commercially available technologies and projects that are shallow,
low risk with low levels of capex and infrastructure already in
place. It also remains interested in creating shareholder value by
strategic investments in similar projects with high cash generative
potential and by forming beneficial development partnerships that
enable the use of pioneering and leading extraction
technologies.
Technical sign off
All of the technical information, including information in
relation to reserves and resources that is contained in this
announcement has been reviewed by, Mr Thom Board. Mr Board is a
member of the Society of Petroleum Engineers who is a suitably
qualified person with over 24 years' experience operating and
developing oil and gas assets. Mr Board has reviewed the release
and consents to the inclusion of the technical information.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCURVNRKRASORR
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