Acquisition and Placing

30 April 2018

Andalas Energy and Power Plc

(‘Andalas’ or the ‘Company’)

Acquisition and Placing

Andalas Energy and Power Plc, the AIM listed upstream oil and gas and energy company (AIM: ADL), is pleased to announce it has acquired an interest in Licence P2112, a Southern North Sea Licence, which contains Badger, a large undrilled gas prospect through the acquisition of a 14.75% equity interest in Eagle Gas Limited (“Eagle”), a private UK oil and gas company.

Highlights:

• Eagle, through its wholly owned subsidiary, has a 66.67% interest in Licence P2112.

• Andalas’ investment will provide capital for Eagle’s share of the 2018 work programme, contracted to PGS.

  • The existing 3D seismic data and interpretation by the previous Operator indicates that Badger has significant gas potential.

  • The work programme will further define the size of the Badger prospect and fully meets the licence commitment.

  • Eagle is targeting completion of the work programme in Summer 2018.

• The Licence straddles existing pipeline infrastructure.

• Creates the potential for further investments opportunities in the UKCS.

• Consideration payable to Eagle is £125,000 in cash and 147,058,824 fully paid Andalas shares equating to £25,000 at the placing price.

• £600,000 (gross) raised via the issue of 3,529,411,765 new ordinary shares of no par value, at a price of 0.017 pence per share – funding the acquisition and for general working capital (“Placing Shares”).

Simon Gorringe, CEO of Andalas Energy and Power PLC said:

“This investment is the first step in delivering my broader strategy to combine nearer term catalysts for shareholders, with our existing Indonesian projects.  Indonesia offers significant potential and we remain committed to our existing projects and strategy there. However to generate sustained value for shareholders we believe we must diversify into other projects or jurisdictions where suitable opportunities arise.  Our team has over 25 years’ experience in the UK North Sea, working across 15 fields encompassing every stage of the development cycle, which makes the Eagle opportunity particularly complementary to the teams skill set.

The investment gives us a material stake in an asset at an attractive entry point, with an existing work programme underway, providing significant upside potential. It also gives us access to other possible UK oil and gas projects that are being worked on by the team at Eagle.  We believe our expertise will help Eagle progress Badger and assist in negotiations on other business development opportunities.

Under our new low-cost operating model I have continued to stream line costs.  In particular in my first six months as CEO, I have already reduced our 6 month cash spend by 25% and continue to make reductions.  The benefit of these cost savings mean that the funds from this placing will provide us with sufficient working capital to deliver the results of Eagle’s work programme and make progress on our other initiatives.  We look forward to providing further updates on this and other projects in due course.”

About Eagle and the Badger prospect

Seaward production Licence P2112 contains the Badger prospect, one of the largest undrilled gas prospects in the UK Southern North Sea. Eagle, through its wholly owned subsidiary, has a 66.67% interest in Licence P2112.  The unaudited management accounts of Eagle for the period from 1 September 2017 to 28 February 2018 showed a pre-tax loss of £276,435.

The 2018 work programme includes the reprocessing of 3D seismic. The programme fully meets the Licence commitment and Petroleum Geo-Services ASA (“PGS”) has been contracted to undertake the work. Eagle and Andalas will cooperate on funding the long-term development of the project.

The consideration payable to Eagle is £125,000 in cash and 147,058,824 fully paid Andalas shares at the placing price for the 14.75% interest in Eagle (“Initial Consideration Shares”).   Andalas will issue a further 147,058,824 (£25,000) consideration shares to Eagle on the earlier of the Licence being extended beyond 31 December 2018 and Eagle acquiring additional assets agreed by Andalas.  The investment in Eagle will initially be recorded in the books of Andalas at the fair value of the consideration.

The acquisition is funded via the placing of 3,529,411,765 new ordinary shares of no par value, raising gross proceeds of £600,000, at a price of £0.00017 per share.  The proceeds of the placing will also be applied for general working capital purposes.  Application has been made for the Placing Shares and Initial Consideration Shares to be admitted to trading on AIM and dealings are expected to commence on or around 13 May 2018 (“Admission”).

In conjunction with the placing, a total of 264,705,882 three year warrants exercisable at the placing price have been issued.

Appointment of Joint Brokers

Upon completion of the placing, Novum Securities Limited and Optiva Securities Limited have been appointed as Joint brokers to the Company. 

Total voting rights

Following Admission, the Company's issued share capital will consist of 9,662,162,387 ordinary shares of nil par value ("Ordinary Shares"), with each Ordinary Share carrying the right to one vote. The Company does not hold any Ordinary Shares in treasury. This figure of 9,662,162,387 Ordinary Shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules ("DTRs").

For further information, please contact:

Simon Gorringe	Andalas Energy and Power Plc	Tel: [phone]
David Porter/Nick Tulloch	Cantor Fitzgerald Europe (Nominated Adviser and Joint Broker)	Tel: [phone]
Colin Rowbury	Novum Securities Limited (Joint Broker)	Tel: [phone]
Christian Dennis/ Tejas Padalkar	Optiva Securities Limited (Joint Broker)	Tel: [phone]