Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil and Gas
12 October 2018
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Issue of Loan Notes
Highlights
·
· Proceeds to help fund 2019 development costs at the Selva gas discovery on the Podere Gallina Permit,
· Loan Notes and additional non-equity funding expected to fund the full development of Selva as well as further exploration in the proposed production concession
· This debt financing follows first gas production in
Prospex Oil and Gas Plc, the AIM quoted investment company, is pleased to announce that it has raised
The proceeds of the Loan Notes will be used to fund the Company's share of the budgeted early stage development costs (including environmental monitoring) at the Selva gas discovery ('Selva') on the Podere Gallina Permit in
The Loan Notes will pay 10% interest biannually, capitalised to 30 June 2019, with the first cash payment 31 December 2019. Repayments start in December 2020 with final repayment on 30 June 2022 (four equal payments) and fit conservatively with expected first production at Selva in Q1/Q2 in 2020.
The Directors believe the issue of the Loan Notes reflects the considerable progress made by Prospex over the last twelve months across its portfolio of European onshore projects. In addition to the Podere Maiar discovery, the Company participated in a gas discovery on the EIV-1 Suceava Concession in onshore
Prospex holds a 17% interest in Podere Gallina where a significant gas discovery was confirmed in January 2018 following highly positive flow testing results at the Podere Maiar-1d appraisal/redevelopment well ('Podere Maiar'). A production concession application has since been submitted to the Italian Government to develop the gas field with first phase production targeted to commence in Q1/Q2 2020 at a rate of up to 150,000 cubic metres (5.3 mmscf/day). The operator, Po Valley Energy, estimates the gross capex required to bring the discovery into production is
Prospex non-executive Chairman, Bill Smith, said, "The market may not have fully recognised the significance to the Company of first gas production in
"Our focus on generating shareholder value is dual focused: build and develop a portfolio of high quality European projects with clear lines of sight towards high impact activity such as drilling and production; and protect the capital structure of the Company by minimising dilution. We firmly believe a huge disconnect has opened up between the underlying value of our projects and our current market valuation. We expect this valuation gap to close as the various workstreams that are underway to monetise our investments are advanced to the point where their considerable potential is visible to all. Until this value gap closes, however, we intend to take full advantage of the non-equity funding opportunities we now have at our disposal."
Further Information on the Warrants
The Subscribers have been issued with 55 warrants ('the Warrants') for each
Further Information on the Subscribers and the Loan Note
The
Director |
Amount |
Bill Smith |
|
Richard Mays (and family) |
|
James Smith |
|
Interest up to 30 June 2019 shall be capitalised on 30 June 2019. Interest thereafter shall be paid biannually beginning on 31 December 2019 and thereafter 30 June and 31 December of each succeeding year until all Loan Notes are repaid.
The Company can elect to pay the interest in Euros by giving 10 business days' notice. Loan Note holders can elect, on a change of control of the Company, where a single party has over 50% of the issued share capital of the Company, to convert some or all of their Loan Notes, including capitalised interest, into ordinary shares at the prevailing market price. Likewise, Loan Note holders in the limited period, from 1 September 2019 to 30 August 2020, can convert into the same class of shares as are issued in any future equity financing of
The Company can elect to repay the Loan notes in full or part at any time by giving the holders 30 days' notice otherwise the Company shall repay the Loan Notes in four equal instalments on 31 December 2020, 30 June 2021, 31 December 2021 and finally on 30 June 2022.
Related Party Transaction
The issue of the Loan Notes to the Directors is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Accordingly, Edward Dawson, independent Director in relation to the Loan Notes, having consulted with the Company's Nominated Adviser, Strand Hanson Limited, considers that the terms of the Directors' Participation in the Loan Note subscription are fair and reasonable insofar as the Company's shareholders are concerned.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
* * ENDS * *
For further information visit www.prospexoilandgas.com or contact the following:
Edward Dawson |
Prospex Oil and Gas Plc |
Tel: +44 (0) 203 9481619 |
Rory Murphy
|
Strand Hanson Limited
|
Tel: +44 (0) 20 7409 3494 |
Duncan Vasey |
Peterhouse Corporate Finance
|
Tel: +44 (0) 20 7469 0932 |
Frank Buhagiar Charlotte Page
|
St Brides Partners Ltd
|
Tel: +44 (0) 20 7236 1177 |
Notes
Prospex Oil and Gas Plc is an AIM quoted investment company focussed on high impact onshore and shallow offshore European opportunities with short timelines to production. The Company's strategy is to acquire undervalued projects with multiple, tangible value trigger points that can be realised within 12 months of acquisition and then applying low cost re-evaluation techniques to identify and de-risk prospects.
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