THIS ANNOUNCEMENT, INCLUDING
THE APPENDIX AND THE INFORMATION IN IT, IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, NEW ZEALAND, SINGAPORE
OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR
DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS
INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION
596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("EUWA")) ("UK MAR"). IN
ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN
RESPECT OF CERTAIN OF THE MATTERS CONTAINED WITHIN THIS
ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF
INSIDE INFORMATION (AS DEFINED UNDER UK MAR). UPON THE PUBLICATION
OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THOSE
PERSONS WHO RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO
LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
15
February 2024
Baron Oil
Plc
("Baron
Oil", "Baron" or the "Company")
Placing
and Subscription to raise £3
million
and
Proposed
WRAP Retail Offer
Baron Oil (AIM: BOIL), the
AIM-quoted oil and gas exploration and appraisal company,
announces that it has conditionally raised
£3 million (before
expenses) by way of an oversubscribed placing and subscription
(the "Placing and Subscription") of a total of
6,000,000,000 new ordinary
shares of 0.025p each in the Company
("Ordinary Shares") at
a price of 0.05 pence per new Ordinary
Share (the "Issue Price"). Allenby Capital Limited
("Allenby Capital") and
Cavendish Capital Markets Limited ("Cavendish") are acting as joint
brokers in connection with the Placing
(together, the "Joint Brokers").
The Placing and Subscription has
conditionally raised net proceeds of approximately £2.7 million.
The Directors intend for the net proceeds of the Placing and
Subscription to be used, in conjunction with Baron's existing
available cash, to support Baron's share of expenditure on the
TL-SO-19-16 Production Sharing Contract ("Chuditch" or the "PSC"), offshore the Democratic Republic
of Timor-Leste in the first half of 2024. These funds are
expected to be applied principally towards a rig deposit, the
drilling project team, a site survey, certain long lead items and a
bank guarantee.
In addition to the Placing and
Subscription, it is proposed that there will be a separate
conditional retail offer to existing shareholders via the
Winterflood Retail Access Platform ("WRAP") to raise up to approximately
£300,000 (before expenses) at the Issue Price (the
"WRAP
Retail Offer", and together with the
Placing and Subscription, the "Fundraise"), to provide existing retail
shareholders in the Company an opportunity to participate in the
Fundraise. A separate announcement will be made shortly by the
Company regarding the WRAP Retail Offer and its terms.
Those investors who subscribe for
new Ordinary Shares pursuant to the WRAP Retail Offer (the
"WRAP Retail Shares") will
do so pursuant to the terms and conditions of the WRAP Retail Offer
contained in that announcement.
Andy Yeo, Chief Executive Officer of
Baron, commented:
"This funding, in conjunction with our existing available
cash, will allow us to push on with the preparations for the
drilling of the Chuditch-2 appraisal well planned for Q4 2024.
These preparations will also include progressing drill financing.
In a drilling success case, we expect to be able to validate a
significant resource to create real value for
shareholders.
As
the Company values its retail shareholder base we are also pleased
to be able to announce a retail offer via the Winterflood Retail
Access Platform ("WRAP") for existing
shareholders."
Background to the Fundraise
Farm-Up with TIMOR GAP and other Farm-Out and funding
discussions
On 8 February 2024, Baron announced
the completion of the assignment of a 15% working interest in the
Chuditch PSC to TIMOR GAP Chuditch Unipessoal Lda. ("TIMOR GAP"), the existing joint venture
partner on the PSC and a wholly owned subsidiary of TIMOR GAP E.P.
the Timor-Leste National Oil and Gas Company (the "Farm-Up").
Following completion of the Farm-Up,
Baron has retained operatorship and holds a 60% working interest in
the Chuditch PSC, while TIMOR GAP has a 40% interest. TIMOR GAP is
responsible for paying 20% of all costs of the PSC, including the
drilling of the planned Chuditch-2 appraisal well, with Baron
responsible for the remaining 80%.
The Directors consider that the
Farm-Up by TIMOR GAP has a value to Baron of approximately US$8.5
million made up of a reimbursement for back costs of c.US$1 million
and in the offset of future spend which in 2024 is estimated to be
around US$7.5 million.
The Directors consider that the
Farm-Up is a significant step towards drill funding, as it
demonstrates government financial commitment to Chuditch and
provides technical and commercial validation. The Directors
also consider that the Farm-Up allows for early engagement to
secure a drilling slot and demonstrates positive momentum with the
Chuditch project.
Baron is currently party to other
Farm-Out and funding discussions which are ongoing and where
progress continues. In addition, the Directors believe that
it is an opportune moment to re-invigorate Baron's Chuditch
Farm-Out programme, emphasising government validation, partial
funding from the Farm-Up and operational progress, in order to add
impetus to other funding discussions. The Directors believe that
Baron's large remaining interest in the PSC is attractive to
various types of potential Farm-Out and funding
partners.
Next Steps Towards
Chuditch-2 appraisal and evaluation status
Baron is preparing for operations to
drill and flow test the Chuditch-2 appraisal well in late 2024,
subject to the availability of a rig, drilling services and the
completion of drill finance. In this respect, discussions are
underway to secure a rig slot and on 12 February 2024 the Company
announced that it had entered into contracts to conduct a site
survey at the planned drilling location for the Chuditch-2
appraisal well. Contract Year 3 of the PSC, which commences
on 19 June 2024, includes a commitment to drill an appraisal well
by 18 June 2025.
The Chuditch-2 appraisal well
location represents a significant updip step-out, which is 4.8km
from the Chuditch-1 discovery well drilled by Shell in
1998.
Baron's key objectives from the
Chuditch-2 appraisal well include:
·
prognosing a potential 133 metre gas column,
versus a 30 metre column at the original Chuditch-1
location
·
validating gas resource estimates
·
performing a production flow test (drill stem
test) to enable future field development planning
Advanced well planning in relation
to the Chuditch-2 appraisal well is underway. Baron is also
evaluating potential gas development and export options.
Baron's current activities in relation to
advancing the Chuditch project include:
·
Discussions with rig owners
·
Identifying potential logistical synergies with regional
operators
·
Progressing the environmental approvals process
· Preparing
to conduct a site survey at the proposed
Chuditch-2 appraisal well location
·
Commencing the procurement process for long lead items
· Updating
of the well design and costs
·
Recruiting for key posts, including Well Operations, Health, Safety
and Environmental and Procurement
· Ongoing
discussions with Farm-Out and other potential funding partners, as
part of the Farm-Out campaign
Key anticipated
milestones
The Board anticipates the following key milestones for
the Chuditch project in 2024:
· Site
survey at the proposed Chuditch-2 appraisal well location in the
first quarter of 2024
·
Completion of drill funding and securing a rig slot in the second
quarter of 2024
· Obtaining
the required environmental and drilling approvals in the third
quarter of 2024
· Well
mobilisation, well spud and drilling results in the fourth quarter
of 2024
Indicative Chuditch use of funds to the end of H1
2024
The Placing and Subscription is
anticipated to raise net proceeds of approximately £2.7
million.
The indicative use of funds for the
Chuditch project to the end of the first half of 2024, as shown
below, is intended to be satisfied via the net proceeds of the
Placing and Subscription supported by the Company's existing
available cash. As at 31 December 2023 the Company had an available
cash position of approximately £3.65 million (excluding a US$1
million bank guarantee and overseas account balances).
Baron's indicative use of funds for
the Chuditch project to the end of the first half of 2024 is as
follows1:
|
(£)
million2
|
Site Survey
|
0.5
|
Drilling Project Team
|
0.6
|
Long Lead Items
|
0.4
|
Estimated Initial Rig Deposit,
Estimated Bank Guarantee & General Project Expenses
|
2.5
|
Total (£) 3
|
4.0
|
|
|
|
|
|
| |
1.
Represents pre-Contract Year 3 of the PSC expenditure to the end H1
2024, which may be subject to change as a result of future
events.
2. Amounts
shown are net to Baron's 80% paying interest, following completion
of the Farm-Up.
3. All uses
of funds are indicative; a Bank Guarantee of US$1m for Contract
Year 2 of the PSC is in place.
It is proposed that the net proceeds
of the WRAP Retail Offer, which will represent a maximum of an
additional approximately £0.285 million, will be generally applied
towards Baron's indicative use of funds for the Chuditch project to
the end of the first half of 20241 as indicated
above.
The gross expenditure for the
Chuditch PSC in the second half of 2024, including the planned
Chuditch-2 appraisal well, is estimated to be US$31
million.
Details of the Placing and Subscription
The Fundraise comprises a placing (the
"Placing") of
5,936,000,000 new Ordinary Shares (the
"Placing
Shares") and a subscription of
64,000,000 new Ordinary Shares (the
"Subscription
Shares") and up to 600,000,000 WRAP Retail
Shares (together the "Fundraise Shares") at the Issue
Price. The Fundraise Shares are to be issued pursuant
to the authorities granted to the Board at the
Company's annual general meeting held on 29 June 2023 on a
non-pre-emptive basis.
Completion of the WRAP Retail Offer is
conditional, inter alia,
upon completion of the Placing and Subscription. Completion of the
Placing and Subscription is not conditional on the completion of
the WRAP Retail Offer.
It is anticipated that an
application will be made to London Stock Exchange plc
("London Stock Exchange")
for the Placing Shares, the Subscription Shares and the
WRAP Retail Shares (once
the final number of WRAP Retail Shares to
be issued is determined) to be admitted to
trading on the AIM market of the London Stock Exchange
("Admission"). It is
currently anticipated that Admission will become effective, and
that dealings in the Placing Shares, Subscription Shares and WRAP
Retail Shares will commence on AIM, at 8.00 a.m. on or around 29
February 2024.
Director and
PDMR participation
Andrew Yeo and Andrew Butler have subscribed for a total of 76,000,000 new Ordinary Shares at the
Issue Price in the Placing and Subscription (the "PDMR Participation"). Details of the
PDMR Participation are outlined in the table below.
Director/PDMR
|
Position
|
new
Ordinary Shares being subscribed
|
Shareholding following Admission
|
Indicative percentage of enlarged share capital following
Admission1
|
Andrew Yeo
|
Chief Executive Officer
|
12,000,000
|
205,000,000
|
0.80%
|
Andrew Butler
|
Director, Asia Pacific
|
64,000,000
|
692,601,442
|
2.71%
|
1 Indicative enlarged share
capital following Admission in this context assumes full take-up
under the WRAP Retail Offer.
The FCA notification, made in accordance with
the requirements of UK MAR is appended further below.
Other
Notice to Distributors
Solely for the purposes of the
product governance requirements contained within: (a) EU Directive
2014/65/EU on markets in financial instruments, as amended and as
this is applied in the United Kingdom ("MiFID II"); (b) Articles 9 and 10 of
Commission Delegated Directive (EU) 2017/593 supplementing MiFID II
and Regulation (EU) No 600/2014 of the European Parliament, as they
form part of UK law by virtue of the European Union (Withdrawal)
Act 2018, as amended; and (c) local implementing measures
(together, the "MiFID II Product
Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for
the purposes of the MiFID II Product Governance Requirements) may
otherwise have with respect thereto, the Fundraise Shares have been
subject to a product approval process, which has determined that
such securities are: (i) compatible with an end target market of
retail investors who do not need a guaranteed income or capital
protection and investors who meet the criteria of professional
clients and eligible counterparties, each as defined in MiFID II;
and (ii) eligible for distribution through all distribution
channels as are permitted by MiFID II (the "Target Market Assessment"). The
Fundraise Shares are not appropriate for a target market of
investors whose objectives include no capital loss.
Notwithstanding the Target Market Assessment, distributors should
note that: the price of the Fundraise Shares may decline and
investors could lose all or part of their investment; the Fundraise
Shares offer no guaranteed income and no capital protection; and an
investment in the Fundraise Shares is compatible only with
investors who do not need a guaranteed income or capital
projection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Fundraise. Furthermore, it is noted that, notwithstanding
the Target Market Assessment, Allenby Capital and Cavendish will
only procure investors who meet the criteria of professional
clients and eligible counterparties. For the avoidance of doubt,
the Target Market Assessment does not constitute: (a) an assessment
of suitability or appropriateness for the purposes of MiFID II; or
(b) a recommendation to any investor or group of investors to
invest in, or purchase, or take any other action whatsoever with
respect to the Fundraise Shares. Each distributor is responsible
for undertaking its own target market assessment in respect of the
shares and determining appropriate distribution
channels.
Forward Looking Statements
This announcement includes
statements that are, or may be deemed to be, "forward-looking
statements". These forward-looking statements can be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
variations or comparable terminology. These forward-looking
statements include matters that are not facts. They appear in a
number of places throughout this announcement and include
statements regarding the Directors' beliefs or current
expectations. By their nature, forward-looking statements involve
risk and uncertainty because they relate to future events and
circumstances. Investors should not place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement.
Notice to overseas persons
This announcement does not
constitute, or form part of, a prospectus relating to the Company,
nor does it constitute or contain any invitation or offer to any
person, or any public offer, to subscribe for, purchase or
otherwise acquire any shares in the Company or advise persons to do
so in any jurisdiction, nor shall it, or any part of it form the
basis of or be relied on in connection with any contract or as an
inducement to enter into any contract or commitment with the
Company.
This announcement is not for
release, publication or distribution, in whole or in part, directly
or indirectly, in or into Australia, Canada, Japan or the Republic
of South Africa or any jurisdiction into which the publication or
distribution would be unlawful. This announcement is for
information purposes only and does not constitute an offer to sell
or issue or the solicitation of an offer to buy or acquire shares
in the capital of the Company in Australia, Canada, Japan, New
Zealand, the Republic of South Africa or any jurisdiction in which
such offer or solicitation would be unlawful or require preparation
of any prospectus or other offer documentation or would be unlawful
prior to registration, exemption from registration or qualification
under the securities laws of any such jurisdiction. Persons
into whose possession this announcement comes are required by the
Company to inform themselves about, and to observe, such
restrictions.
This announcement is not for
publication or distribution, directly or indirectly, in or into the
United States of America. This announcement is not an offer
of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under
the U.S. Securities Act of 1933, as amended, and may not be offered
or sold in the United States, except pursuant to an applicable
exemption from registration. No public offering of securities
is being made in the United States.
General
Neither the content of the Company's
website (or any other website) nor the content of any website
accessible from hyperlinks on the Company's website (or any other
website) or any previous announcement made by the Company is
incorporated into, or forms part of, this announcement.
Allenby Capital, which is authorised
and regulated by the FCA in the United Kingdom, is acting as
nominated adviser and joint broker to the Company in connection
with the Placing. Allenby Capital will not be responsible to any
person other than the Company for providing the protections
afforded to clients of Allenby Capital or for providing advice to
any other person in connection with the Fundraise. Allenby Capital
has not authorised the contents of, or any part of, this
announcement, and no liability whatsoever is accepted by Allenby
Capital for the accuracy of any information or opinions contained
in this announcement or for the omission of any material
information.
Cavendish, which is authorised and
regulated by the FCA in the United Kingdom, is acting as joint
broker to the Company in connection with the Placing. Cavendish
will not be responsible to any person other than the Company for
providing the protections afforded to clients of Cavendish or for
providing advice to any other person in connection with the
Fundraise. Cavendish has not authorised the contents of, or any
part of, this announcement, and no liability whatsoever is accepted
by Cavendish for the accuracy of any information or opinions
contained in this announcement or for the omission of any material
information.
Qualified Person's Statement
The technical information and
resource reporting contained in this announcement has been reviewed
by Jon Ford BSc, Fellow of the Geological Society, Technical
Director of the Company. Mr Ford has more than 40 years' experience
as a petroleum geoscientist. He has compiled, read and approved the
technical disclosure in this regulatory announcement.
For further information, please
contact:
Baron Oil Plc
|
+44
(0) 20 7117 2849
|
Andy Yeo, Chief Executive
|
|
|
|
Allenby Capital Limited
|
+44
(0) 20 3328 5656
|
Nominated Adviser and
Joint Broker
|
|
Alex Brearley, Nick Harriss, George
Payne (Corporate Finance)
|
|
Kelly Gardiner, Stefano Aquilino
(Sales and Corporate Broking)
|
|
|
|
Cavendish Capital Markets Limited
|
+44
(0) 131 220 6939 / +44 (0) 207 397 8900
|
Joint Broker
|
|
Neil McDonald, Pearl Kellie
(Corporate Finance)
|
|
Leif Powis (Sales)
|
|
|
|
IFC
Advisory Limited
|
+44
(0) 20 3934 6630
|
Financial PR and IR
|
baronoil@investor-focus.co.uk
|
Tim Metcalfe, Florence
Chandler
|
|
Notification and public disclosure of transactions by persons
discharging managerial responsibilities and persons closely
associated with them
1.
|
Details of the person discharging managerial
responsibilities/person closely associated
|
(a)
|
Full name of person
Dealing
|
Andrew Yeo
|
2.
|
Reason for notification
|
(b)
|
Position/status
|
Chief Executive Officer
|
(c)
|
Initial notification/
Amendment
|
Initial notification
|
3.
|
Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
|
(d)
|
Name of entity
|
Baron Oil Plc
|
(e)
|
LEI
|
213800MBSOS9UZ5SW712
|
4.
|
Details of the transaction(s): section to be repeated for (i)
each type of instrument; (ii) each type of transaction; (iii) each
date; and (iv) each place where transactions have been
conducted
|
(a)
|
Description of the financial
instrument, type of instrument
|
Ordinary shares of 0.025 pence each
in the Company
|
(b)
|
Identification code
|
GB00B01QGH57
|
(c)
|
Nature of the transaction
|
Acquisition of Ordinary Shares in
Placing
|
(d)
|
Price(s) and volume(s)
|
Prices(s)
|
Volume(s)
|
0.05
pence per new Ordinary Share
|
12,000,000
|
|
(e)
|
Aggregated information:
- Aggregated volume
- Price
|
12,000,000
0.05 pence
per new Ordinary Share
|
(f)
|
Date of transaction
|
15 February 2024
|
(g)
|
Place of transaction
|
Outside a trading venue
|
1.
|
Details of the person discharging managerial
responsibilities/person closely associated
|
(a)
|
Full name of person
Dealing
|
Andrew Butler
|
2.
|
Reason for notification
|
(b)
|
Position/status
|
Director, Asia Pacific
|
(c)
|
Initial notification/
Amendment
|
Initial notification
|
3.
|
Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
|
(d)
|
Name of entity
|
Baron Oil Plc
|
(e)
|
LEI
|
213800MBSOS9UZ5SW712
|
4.
|
Details of the transaction(s): section to be repeated for (i)
each type of instrument; (ii) each type of transaction; (iii) each
date; and (iv) each place where transactions have been
conducted
|
(a)
|
Description of the financial
instrument, type of instrument
|
Ordinary shares of 0.025 pence each
in the Company
|
(b)
|
Identification code
|
GB00B01QGH57
|
(c)
|
Nature of the transaction
|
Acquisition of Ordinary Shares in
Subscription
|
(d)
|
Price(s) and volume(s)
|
Prices(s)
|
Volume(s)
|
0.05
pence per new Ordinary Share
|
4,000,000
|
|
(e)
|
Aggregated information:
- Aggregated volume
- Price
|
64,000,000
0.05 pence
per new Ordinary Share
|
(f)
|
Date of transaction
|
15 February 2024
|
(g)
|
Place of transaction
|
Outside a trading venue
|