Loan Agreement

RNS Number : 4166D

Lansdowne Oil & Gas plc

26 June 2019

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. If you have any queries on this, then please contact Steve Boldy, the Chief Executive Officer of the Company (responsible for arranging release of this announcement).

26 June 2019

Lansdowne Oil & Gas plc

("Lansdowne" or the "Company")

Loan Agreement with Two Major Shareholders

Lansdowne Oil & Gas plc ("Lansdowne" or "the Company") is pleased to confirm that on 25 June 2019 the Company entered into a Loan Agreement for GBP 300,000 (the "Loan") with Lampe Conway & Co LLC and Brandon Hill Capital Limited (collectively the "Major Shareholders").

Under the Agreement, which is split equally between the Major Shareholders, Lansdowne is able to draw down funds at its discretion in part or in full. A coupon of 12% per annum will be applied only to those funds drawn by the Company. There are no options, warrants or convertible aspect to the Loan and no fee owed to the Major Shareholders for providing the funds. The Loan is unsecured and repayable on 25 July 2020.

Lampe Conway & Co LLP and Brandon Hill Capital Limited are Significant Shareholders in Lansdowne and therefore the Loan is considered a related party transaction for the purposes of Rule 13 of the AIM Rules.  The Directors of Lansdowne consider, having consulted with the Company's nominated adviser, that the terms of the Loan are fair and reasonable insofar as the Company's shareholders are concerned.

Steve Boldy, CEO commented:

"Given the significant softening in our share price over the last few months, in part as a result of delays with respect to the award of a new Site Survey Permit over the Barryroe Licence and the delay in delivery of funds due under the farm-out to APEC, the Board concluded a new equity fundraising at this time would not be in the interest of all shareholders.  Accordingly, we would like to thank our Major Shareholders for their continued support and believe the terms of the Loan are attractive when compared to a number of other debt financings announced by quoted peers in the junior AIM resource sectors.

"With the statutory public consultation period relating to the Site Survey Period having recently concluded, the Board remains optimistic that upon receipt of regulatory consents and financing, the Well Site Survey Operations will take place in Q3 2019, ahead of the previously outlined drilling campaign."

For further information please contact:

Lansdowne Oil & Gas plc	[phone]
Steve Boldy
SP Angel Corporate Finance LLP	[phone]
Nominated Adviser
Lindsay Mair
Richard Hail
Brandon Hill Capital	[phone]
Broker
Oliver Stansfield

Competent Person's Statement

In accordance with the "AIM Rules - Note for Mining and Oil and Gas Companies", the information contained within this announcement has been reviewed and signed off by Dr. Stephen Boldy, Chief Executive Officer of Lansdowne, who is a petroleum geologist with 39 years' experience in petroleum exploration and management.  Dr. Boldy has consented to the inclusion of the technical information in this release in the form and context in which it appears.

Notes to editors:

About Lansdowne

Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focused, oil and gas exploration and appraisal company quoted on the AIM market and head quartered in Dublin.

For more information on Lansdowne, please refer to www.lansdowneoilandgas.com 

About Barryroe

Barryroe, located in the North Celtic Sea Basin, off the south coast of Ireland, has had six wells successfully drilled on the structure.  Hydrocarbons have been logged in all six wells, with flow test results from four wells.  Four wells were drilled in the 1970's by Esso with a further appraisal well drilled in 1990 by Marathon Oil.  The sixth well was drilled by Providence & Lansdowne in 2011/12.  The oil is light (43° API) with a wax context of c. 17-20%.  The successfully tested reservoir sands are of Cretaceous Middle and Lower Wealden age located between c. 4,500' TVDSS and 7,550' TVDSS.  The field is covered by both 2D and 3D seismic, the latter which was acquired in 2011.

Following acquisition and interpretation of the new 2011 3D seismic data together with the subsequent drilling and testing of the 48/24-10z Barryroe appraisal well in 2012, Providence retained the services of Netherland Sewell & Associates Inc. (NSAI) to carry out a third party contingent resource audit (CPR) of the in-place hydrocarbon and recoverable resources for the Basal Wealden oil reservoir.  NSAI reported that the Basal Wealden oil reservoir has a 2C in-place gross on-block volume of 761 MMBO with recoverable resources of 266 MMBO and 187 BCF of associated gas, based on a 35% oil recovery factor.  A third party (CPR) audit of the overlying Middle Wealden, which was carried out by RPS Energy (RPS) in 2011, reported a 2C in-place gross on-block volume of 287 MMBO with technically recoverable resources of 45 MMBO and 21 BCF of associated gas, based on a 16% oil recovery factor. 

The total combined audited gross on block 2C recoverable resources at Barryroe therefore amount to 346 MMBOE, comprising 311 MMBO and 207 BCF.   The following table summarises the range of total gross audited on-block Barryroe oil resources:

	1C (MMBO)	2C (MMBO)	3C (MMBO)
Basal Wealden STOIIP (NSAI)	338	761	1,135
Basal Wealden Recoverable (NSAI)	85	266	511
Middle Wealden STOIIP (RPS)	31	287	706
Middle Wealden Recoverable (RPS)	4	45	113
TOTAL STOIIP	369	1,048	1,841
TOTAL RECOVERABLE OIL RESOURCES	89	311	624

Note: The table above excludes recoverable solution gas (i.e. 207 BCF or 34.5 MMBOE in the 2C case) 

Further incremental resource potential has been identified in logged hydrocarbon bearing intervals within stacked Lower Wealden and Purbeckian sandstones which Providence has previously estimated contains total associated P90, P50 & P10 in place oil resources of 456 MMBO, 778 MMBO & 1,165 MMBO respectively. As there is currently limited reservoir and well test data available over these two intervals, future well data over these specific zones would be required in order to firm up their associated final recoverable resource estimates.

 

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