NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO
SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. THIS
ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THE SECURITIES REFERRED
TO HEREIN ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD
NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. A CIRCULAR AND PROSPECTUS WILL BE PUBLISHED BY THE COMPANY TODAY IN
CONNECTION WITH THE PROPOSED ACQUISITION AND RIGHTS ISSUE. FOLLOWING
PUBLICATION, COPIES OF THE CIRCULAR AND PROSPECTUS WILL BE AVAILABLE FROM THE
COMPANY'S REGISTERED OFFICE AND FROM 34 PARK STREET, LONDON, W1K 2JD AND WILL BE
AVAILABLE FOR VIEWING ON THE COMPANY'S WEBSITE
On 29 June 2012, Heritage Oil Plc (TSX:HOC)(LSE:HOIL), an independent upstream
exploration and production company, announced that Shoreline Natural Resources
Limited ("Shoreline"), a special purpose private Nigerian company formed between
a subsidiary of Heritage and a local Nigerian partner, Shoreline Power Company
Limited ("Shoreline Power"), had reached an agreement to acquire, by way of
assignment, a 45% participating interest in a producing oil mining lease in
Nigeria ("OML 30"), together with a 45% interest in other assets under the joint
operating agreement for OML 30 (the "Acquisition Assets"), for a total cash
consideration of US$850 million, net of costs (the "Proposed Acquisition").
The Proposed Acquisition will be financed by a US$550 million secured bridge
finance facility, and a fully underwritten rights issue ("Rights Issue") raising
proceeds of up to US$370 million (which amount may be reduced by the proceeds of
any capital raising which has completed and settled prior to 27 August 2012).
Heritage expects to publish a prospectus ("Prospectus") in connection with the
Rights Issue today.
Principal Terms of the Rights Issue
The Rights Issue is fully underwritten pursuant to the Rights Issue Underwriting
Agreement. The Issue Price at which Qualifying Shareholders will be invited to
subscribe for New Ordinary Shares will be determined and announced in advance of
the EGM and will be at a discount to TERP within a range of between 40 per cent
and 45 per cent, having regard to, among other things, investor feedback, market
conditions, any relevant requirements of the Listing Rules and/or Investor
Protection Committee Guidelines and the market price of the Company's shares
over the five days preceding the determination of the Issue Price. The Issue
price is to be announced no later than 7.00 a.m. on 28 August 2012.
The New Ordinary Shares, when issued and fully paid, will rank pari passu in all
respects with existing Ordinary Shares, including the right to receive dividends
or distributions made, paid or declared (if any) after Admission of such New
Ordinary Shares, as described below. Applications will be made to the UKLA for
the New Ordinary Shares to be admitted to Listing on the Official List and to
the London Stock Exchange for the New Ordinary Shares to be admitted to trading
on the Main Market. It is expected that Admission will occur, and that dealings
in the New Ordinary Shares on the London Stock Exchange will commence, at 8.00
a.m., London time, on 17 September 2012.
The Rights Issue is conditional upon, amongst other things:
-- the passing, without amendment, of the Resolutions that are to be
proposed at the EGM;
-- the Rights Issue Underwriting Agreement not having been terminated prior
to becoming unconditional;
-- the Facilities Agreement not having been terminated and none of the
conditions precedent to drawdown set out therein having become incapable
of satisfaction;
-- the Acquisition Agreement not having been amended in any material
respect, and not having lapsed or been terminated nor any of the
Conditions having become incapable of satisfaction or having been waived
prior to Admission; and
-- Admission having become effective by no later than 8.00 a.m., London
time, on 31 August 2012 (or such later time and/or date as the Company
and the Underwriter may agree).
The results of the Rights Issue, including the aggregate number of New Ordinary
Shares issued and the aggregate amount raised, net of expenses, is expected to
be announced by Heritage to a Regulatory Information Service after 7.00 a.m.,
London time, on 17 September 2012.
Advance Capital Raisings
Concurrently with the Rights Issue, the Directors are contemplating (i) a
potential non pre-emptive placing of Ordinary Shares ("Equity Placing") and (ii)
subject to a waiver from the lenders under the Facilities Agreement having been
obtained by the Company, a potential issuance of a convertible bond
("Convertible Bond Issue" and together with the Equity Placing, the "Advance
Capital Raisings"), or a combination thereof.
If the Directors elect to implement any or both of the Advance Capital Raisings,
any such Advance Capital Raising would complete and settle during the period
between the date of the Prospectus (6 August 2012) and the announcement of the
Issue Price (28 August 2012). Any amounts raised pursuant to any Advance Capital
Raisings would reduce the size of the Rights Issue.
Highlights of the Proposed Acquisition
-- OML 30, located onshore in the delta in Nigeria, includes eight
producing fields and associated infrastructure, including a segment of
the 850,000 bpd capacity Trans Forcados pipeline
-- The Proposed Acquisition represents a significant opportunity for
Heritage to achieve a material change in production and reserves
-- OML 30 is currently averaging gross production of c.35,000 bopd,
increasing Heritage's net production from 567 bopd to c.11,320 bopd
-- RPS estimates that OML 30 has gross proved and probable reserves of
1,114 mmbbls of oil
-- In addition, Heritage's Directors estimate 2.5 Tcf gross of gas
which has not been included in the RPS review or valuation
-- Net proved and probable reserves increase 568% from 61 mmbbls to 408
mmbbls
-- Potential to ramp up production of OML 30 in the short term by
refurbishing and maintaining existing infrastructure
-- Cash consideration of US$850 million, net of costs, for Shoreline to
purchase a 45% participating interest in OML 30 and related assets under
the corresponding joint operating agreement
-- OML 30 is expected to be cash generative immediately following
completion of the Proposed Acquisition
-- Shoreline will be one of the leading indigenous companies producing in
Nigeria
-- Combines Shoreline Power's energy and infrastructure operating
expertise and respected network of relationships within Nigeria with
Heritage's strong technical team with relevant geographic expertise
-- Shoreline and Heritage will work to develop close relationships with
local communities and other stakeholders
-- The Proposed Acquisition provides Heritage with exposure to Nigeria,
which is reported to contain the second largest proved reserves in
Africa, and provides further growth opportunities in a prolific
hydrocarbon region
-- The Proposed Acquisition will further diversify Heritage's portfolio,
balancing exploration with production, while extending Heritage's
geographic footprint within its core areas of Africa and the Middle East
Expected Timetable
All times are London times unless specifically stated otherwise.
----------------------------------------------------------------------------
Announcement of the Proposed Acquisition 29 June 2012
----------------------------------------------------------------------------
Publication of the Prospectus, the Circular 6 August 2012
(including the Notice of EGM) and the Form of
Proxy and despatch to Shareholders outside of
Canada
----------------------------------------------------------------------------
Despatch of the Prospectus, the Circular 7 August 2012
(including the Notice of EGM) and the Form of
Proxy to Shareholders in Canada
----------------------------------------------------------------------------
Announcement of any Advance Capital Raising no later than 27 August
2012
----------------------------------------------------------------------------
Completion and settlement of any Advance Capital no later than 27 August
Raising 2012
----------------------------------------------------------------------------
Issue Price determined no later than 27 August
2012
----------------------------------------------------------------------------
Announcement of Issue Price and entitlements of no later than 7.00 a.m. on
Qualifying Shareholders 28 August 2012
----------------------------------------------------------------------------
Latest time and date for receipt of Forms of 4.00 p.m. on 28 August
Proxy in respect of the EGM 2012
----------------------------------------------------------------------------
Rights Issue Record Date close of business on 28
August 2012
----------------------------------------------------------------------------
EGM 4.00 p.m. on 30 August
2012
----------------------------------------------------------------------------
Despatch of Provisional Allotment Letters (to 30 August 2012
Qualifying non-CREST Shareholders only)(1)
----------------------------------------------------------------------------
Despatch of Rights Certificates (to Qualifying 30 August 2012
Exchangeable Shareholders only)
----------------------------------------------------------------------------
Ordinary Shares marked "ex" by the London Stock 8.00 a.m. on 31 August
Exchange 2012
----------------------------------------------------------------------------
Admission and dealings in Nil Paid Rights and 8.00 a.m. on 31 August
Fully Paid Rights commence on the London Stock 2012
Exchange
----------------------------------------------------------------------------
Nil Paid Rights credited to stock accounts in as soon as practicable
CREST (Qualifying CREST Shareholders only)(1) after 8.00 a.m. on 31
August 2012
----------------------------------------------------------------------------
Nil Paid Rights and Fully Paid Rights enabled in as soon as practicable
CREST after 8.00 a.m. on 31
August 2012
----------------------------------------------------------------------------
Recommended latest time for requesting withdrawal 4.30 p.m. on 10 September
of Nil Paid Rights and Fully Paid Rights from 2012
CREST (i.e. if your Nil Paid Rights and Fully
Paid Rights are in CREST and you wish to convert
them to certificated form)
----------------------------------------------------------------------------
Recommended latest time for requesting withdrawal 4.30 p.m. on 10 September
Rights from CDS (i.e. if your Rights are in CDS 2012
and you wish to convert them to certificated
form)
----------------------------------------------------------------------------
Recommended latest time for depositing renounced 3.00 p.m. on 11 September
Provisional Allotment Letters, nil or fully paid, 2012
into CREST or for dematerialising Nil Paid Rights
or Fully Paid Rights into a CREST stock account
(i.e. if your Nil Paid Rights and Fully Paid
Rights are represented by a Provisional Allotment
Letter and you wish to convert them to
uncertificated form)
----------------------------------------------------------------------------
Latest time and date for splitting Provisional 3.00 p.m. on 12 September
Allotment Letters, nil or fully paid 2012
----------------------------------------------------------------------------
Latest time and date for splitting Rights 3.00 p.m. on 12 September
Certificates 2012
----------------------------------------------------------------------------
Latest time and date for acceptance, payment in 11.00 a.m. on 14 September
full and registration of renunciation of 2012
Provisional Allotment Letters
----------------------------------------------------------------------------
Latest time and date for acceptance and payment 10.00 a.m. (3.00 a.m.
in full of Rights Certificates Calgary time) on 14
September 2012
----------------------------------------------------------------------------
Results of Rights Issue to be announced through a as soon as practicable
Regulatory Information Service after 7.00 a.m. on 17
September 2012
----------------------------------------------------------------------------
Dealings in New Ordinary Shares, fully paid, 8.00 a.m. on 17 September
commence on the London Stock Exchange 2012
----------------------------------------------------------------------------
New Ordinary Shares credited to CREST as soon as practicable
after 8.00 a.m. on 17
September 2012
----------------------------------------------------------------------------
Despatch of definitive share certificates for the by no later than 24
New Ordinary Shares in certificated form September 2012
----------------------------------------------------------------------------
Latest date for despatch of sale of rights 24 September 2012
payment, if any
----------------------------------------------------------------------------
Expected date of satisfaction of all Conditions on or around 1 November
(including receipt of consent to the Proposed 2012
Acquisition from the Nigerian Minister of
Petroleum Resources) other than in respect of
Readmission
----------------------------------------------------------------------------
Completion and Readmission by no later than 6
November 2012
----------------------------------------------------------------------------
Note:
Each of the times and dates in the above timetable are subject to change.
The times and dates set out in the expected timetable of principal events
above and mentioned throughout this Prospectus may be adjusted by the
Company in consultation with J.P. Morgan Cazenove, in which event details of
the new times and dates will be notified to the UKLA, the London Stock
Exchange and, where appropriate, Qualifying Shareholders.
(1) Subject to certain restrictions relating to Qualifying Shareholders with
registered addresses outside the United Kingdom.
Restoration of trading
As the Proposed Acquisition is classified as a reverse takeover under the
Listing Rules, the listing of the Company's Ordinary Shares and Exchangeable
Shares on the Official List of the UK Listing Authority was suspended with
effect from Monday 2 July 2012 until sufficient information on the Proposed
Acquisition was available to the market. Following approval by the UK Listing
Authority of the Circular and Prospectus as expected later today, the Company
will request that the listing of its Ordinary Shares and Exchangeable Shares be
restored to the Official List and trading in such Shares is expected to resume
with effect from the commencement of trading on 7 August 2012.
Tony Buckingham, Chief Executive Officer, commented:
"The Proposed Acquisition is considered to be the largest ever upstream asset
transaction in sub-Saharan Africa, based on the licence's proved and probable
reserves. The sheer size and valuation of the oil fields, based on the recently
issued independent reserves report, and the use of debt to fund a considerable
portion of the purchase consideration make this transaction transformational and
highly attractive.
"We remain confident of completing the acquisition in the announced timeframe
and that we will build Shoreline into one of the leading oil and gas producers
in Nigeria."
Analyst Presentation
Mr. Paul Atherton, Chief Financial Officer, will be hosting an analyst
presentation at 11.00 a.m. (BST) on 6 August 2012, details of which can be
obtained from Stephanie Power at FTI Consulting on 0207 269 7277 or
stephanie.power@fticonsulting.com.
Capitalised terms used in this announcement, unless otherwise specified, have
the meanings given to them in the Prospectus and the Circular.
Notes to Editors
Shoreline Power
-- Shoreline Power is a subsidiary of Shoreline Energy International
Limited ("SEI"), a leading private Nigerian energy and infrastructure
company. SEI was founded in 1997 and has offices in Lagos, where it has
its headquarters, and London.
-- SEI has operations across Sub-Saharan Africa and a portfolio of 16
operating companies with over 3,000 employees.
-- SEI has interests in the infrastructure, construction, energy,
investments and energy trading, and telecommunications sectors.
-- Shoreline Power is led by Mr. Kola Karim, who is also the CEO of SEI.
-- For further information please refer to www.shoreline-power.com
Heritage
-- Heritage is listed on the Main Market of the London Stock Exchange and
is a constituent of the FTSE 250 Index. The trading symbol is HOIL.
Heritage has a further listing on the Toronto Stock Exchange (TSX:HOC).
-- Heritage is an independent upstream exploration and production company
engaged in the exploration for, and the development, production and
acquisition of, oil and gas in its core areas of Africa, the Middle East
and Russia.
-- Heritage has an exploration, appraisal and development asset in the
Kurdistan Region of Iraq, exploration assets in Malta, Tanzania, Mali,
Pakistan, Libya and the Democratic Republic of Congo and a producing
property in Russia.
-- For further information please refer to our website,
http://www.heritageoilplc.com
This press release is not for distribution to United States Newswire Services or
for dissemination in the United States.
J.P. Morgan Limited, which conducts its UK investment banking business as J.P.
Morgan Cazenove and is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting as Sole Financial Adviser to Heritage
and for no one else in connection with the Proposed Acquisition only and will
not be responsible to anyone other than Heritage for providing the protections
afforded to its clients nor for providing advice in relation to the matters set
out in this announcement.
J.P. Morgan Securities plc, which conducts its UK investment banking business as
J.P. Morgan Cazenove and is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting as Sole Sponsor to Heritage in
connection with the matters set out in this announcement, and Joint Global
Coordinator, Joint Bookrunner and Underwriter in connection with the Rights
Issue and any other capital raising as set out in this announcement to Heritage
and for no one else and will not be responsible to anyone other than Heritage
for providing the protections afforded to its clients nor for providing advice
in relation to the matters set out in this announcement. For the purposes of
this announcement, references to "J.P. Morgan Cazenove" are to both J.P. Morgan
Limited and/or J.P. Morgan Securities plc, as appropriate.
Standard Bank Plc is authorised and regulated in the United Kingdom by the
Financial Services Authority and is entered in the FSA's register (register
number 124823). Standard Bank Plc is acting as Joint Global Coordinator and
Joint Bookrunner to Heritage and for no one else in connection with the Rights
Issue and any other capital raising as set out in this announcement and will not
be responsible to anyone other than Heritage for providing the protections
afforded to its clients nor for providing advice in relation to the matters set
out in this announcement.
Canaccord Genuity Limited is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting as Lead Manager to Heritage and for
no one else in connection with the Rights Issue and any other capital raising as
set out in this announcement and will not be responsible to anyone other than
Heritage for providing the protections afforded to its clients nor for providing
advice in relation to the matters set out in this announcement.
If you would prefer to receive press releases via email please contact Jeanny So
(jeanny@chfir.com) and specify "Heritage press releases" in the subject line.
Certain information in this announcement is based on management estimates. Such
estimates have been made in good faith and represent the genuine belief of
applicable members of management. Those management members believe that such
estimates are founded on reasonable grounds. However, by their nature, estimates
may not be correct or complete. Accordingly, no representation or warranty
(express or implied) is given that such estimates are correct or complete. No
representation or warranty (express or implied) is given that such estimates are
so founded. None of the Company, J.P. Morgan Cazenove, Standard Bank Group or
Canaccord undertake any obligation to correct or complete any estimate whether
as a result of being aware of information (new or otherwise), future events or
otherwise.
Overseas Shareholders
The participation in the Rights Issue by persons who are not resident in the
United Kingdom may be affected by the laws of the relevant jurisdictions. Such
persons should inform themselves about and observe any applicable requirements.
Further details in relation to overseas shareholders will be contained in the
Prospectus.
Any failure to comply with the applicable restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies involved in the Proposed Acquisition
and the Rights Issue disclaim any responsibility or liability for the violation
of such restrictions by any person.
This announcement has been prepared for the purposes of complying with English
law and the Listing Rules of the United Kingdom Financial Services Authority and
information disclosed may not be the same as that which would have been prepared
in accordance with the laws of jurisdictions outside England.
Unless otherwise determined by Heritage, and permitted by applicable law and
regulation, the shares to be issued in connection with the Rights Issue will not
be issued directly to shareholders in and will not be capable of acceptance in
or from any jurisdiction where to do so would constitute a breach of securities
laws in that jurisdiction. Copies of this announcement are not being, and must
not be, mailed or otherwise forwarded, distributed or sent in, into or from any
jurisdiction where to do so would constitute a breach of securities laws in that
jurisdiction. Persons receiving this announcement (including custodians,
nominees and trustees) should observe these restrictions and should not send or
distribute this announcement in, into or from any such jurisdictions.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:
This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements include, but are
not limited to, statements with regard to the outcome of the Proposed
Acquisition, future production and grades, projections for sales growth,
estimated revenues, reserves and resources, targets for cost savings, the
construction cost of new projects, the timing and outcome of exploration
projects and drilling programmes, projected capital expenditures, the timing of
new projects, future cash flow and debt levels, the outlook for the prices of
hydrocarbons, the integration of acquisitions, the outlook for economic recovery
and trends in the trading environment, statements about strategies, cost
synergies, revenue benefits or integration costs and production capacity and
future production levels and timing, and may be (but are not necessarily)
identified by the use of words such as "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "aims", "plans",
"predicts", "continues", "assumes", "positioned", "will", or "should" and other
similar expressions that are predictions of or indicate future events and future
trends or, in each case, their negative or other variations or comparable
terminology.
These forward-looking statements include matters that are not historical facts
and include statements regarding the Company's intentions, beliefs or current
expectations. An investor should not place undue reliance on forward-looking
statements because, by their nature, they involve known and unknown risks,
uncertainties and other factors and relate to events and depend on circumstances
that may or may not occur in the future that are in many cases beyond the
control of the Company. A number of factors could cause actual results and
developments to differ materially from those expressed or implied by the
forward-looking statements. In particular, there is no assurance that the
conditions precedent to Completion will be satisfied or waived and the Company
may not realise the anticipated benefits, operational and other synergies and/or
cost savings from the Proposed Acquisition. Forward-looking statements also
appear in a number of places in the RPS Report, which reproduces data derived
from studies conducted on behalf of the Company relating to its interest in
reserves and resources of crude oil and gas in certain of the Company's
properties and the reserves and resources of crude oil and gas of OML 30, and
contains projections and estimates relating to the Company's current plans
regarding volume of crude oil and gas, well development, amount and type of
equipment and transportation infrastructure necessary to implement its
exploration and production plans and associated timeline and capital and
operating expenditures required to purchase or build such equipment and
infrastructure. The estimates and projections contained in the RPS Report are
based on certain assumptions, which may prove to be incorrect.
Any forward-looking statements in this announcement reflect the Company's view
with respect to future events as at the date of this announcement and are
subject to risks relating to future events and other risks, uncertainties and
assumptions relating to the Company's operations, results of operations, growth
strategy and liquidity. None of the Company, J.P. Morgan Cazenove, Standard Bank
Group or Canaccord undertake any obligation publicly to release the results of
any revisions or up-dates to any forward-looking statements in this announcement
that may occur due to any change in its expectations or to reflect events or
circumstances after the date of this announcement.
Subject to certain exceptions, neither this announcement nor any copy of it may
be taken or transmitted into the United States of America, its territories or
possessions or distributed, directly or indirectly, in or into the United States
of America, its territories or possessions. Neither this announcement nor any
copy of it may be taken or transmitted into any other jurisdiction where to do
so would constitute a violation of the relevant laws of such jurisdiction or to
any securities analyst or other person in any of those jurisdictions. Any
failure to comply with this restriction may constitute a violation of United
States, or other applicable securities law. The distribution of this
announcement in other jurisdictions may be restricted by law and persons into
whose possession this document comes should inform themselves about, and
observe, any such restrictions. This announcement does not constitute or form a
part of any offer or solicitation to purchase or subscribe for securities in the
United States. The securities referred to herein have not been and will not be
registered under the US Securities Act of 1933 (the "Securities Act"), and may
not be offered or sold in the United States absent an exemption from, or in a
transaction not subject to the registration requirements of the Securities Act
and in compliance with any applicable securities laws of any state or other
jurisdiction of the United States. There will be no public offer of any
securities of Heritage in the United States. The securities referred to herein
have not been and will not be registered under the applicable securities laws of
any other restricted jurisdiction and, subject to certain exceptions, may not be
offered or sold within any jurisdiction where to do so would constitute a
violation of the relevant laws or to any national, resident or citizen of such
jurisdiction.
This announcement constitutes an advertisement within the meaning of the
Prospectus Rules of the United Kingdom Financial Services Authority and is not a
prospectus and has been prepared solely in connection with the Proposed
Acquisition. A prospectus and circular will be published by Heritage today in
connection with the Proposed Acquisition. Copies of the Circular and Prospectus
will be available from the Company's registered office and from 34 Park Street,
London, W1K 2JD and will be available for viewing on the Company's website at
www.heritageoilplc.com.
Important Information
This announcement does not constitute an offer to sell, or the solicitation of
an offer to buy, exchange, or transfer any securities of Heritage. The value of
the Heritage Shares can go down as well as up and past performance cannot be
relied on as a guide to future performance.
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