Acquisition of 75 per cent. of Alpay Enerji A.S.

RNS Number : 8326O

San Leon Energy PLC

25 September 2013

 



THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR FORWARDING, RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, JAPAN, CANADA, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND OR AUSTRALIA OR ANY OTHER STATE OR JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

San Leon Energy Plc

("San Leon Energy" or the "Company")

Acquisition of 75 per cent. of Alpay Enerji A.S.

£31,000,000 Two Tranche Placing

£5,225,000 First Placing

£25,775,000 Second Placing and Notice of Extraordinary General Meeting

25 September 2013

DETAILS OF THE ACQUISITION

San Leon Energy, the oil and gas exploration and development company focused on projects in Poland, Albania, Morocco and Ireland is pleased to announce that it has entered into an agreement conditionally to acquire 75 per cent. of the issued share capital of Alpay Enerji AS (the "Acquisition") from Server Fatih Alpay. Completion of the Acquisition is conditional on the Company obtaining the necessary regulatory approvals from the General Directorate of Petroleum Affairs in Turkey.

Alpay Enerji AS ("Alpay") is a Turkish oil and gas company which currently holds a 100 per cent. participating interest in seven conventional oil and gas licences in Turkey (three in the "Hatay" area of the Iskendrun Basin (Blocks 4394, 4395 and 4396), three in the "Adana" sub-basin (Blocks 5098, 5101 and 5102) and one in the "Konya" area of the Tuz Golu Basin (Block 4077)), together covering 842,094 acres) (the "Existing Licences"). The Existing Licences have gross proved and probable gas reserves of 46.6 BCF (8 MMBOE) and the Company believes that additional gross proved and probable contingent gas resources of 140.7 BCF (24.3 MMBOE) can be unlocked with a low-risk drilling programme.

In addition to acquiring 75 per cent. of the issued share capital of Alpay, the Acquisition provides, under the terms of the agreement relating to the Acquisition (the "Acquisition Agreement"), (subject, amongst other things, to obtaining the necessary regulatory approvals from the General Directorate of Petroleum Affairs in Turkey) for the transfer to Alpay of nine additional conventional oil and gas licences in Turkey (three in the "Hatay" area of the Marmara Basin (Blocks 5092, 5093 and 3852), three in the "Adana" sub-basin (Blocks 5082, 5083 and 5084), one in the "Diyarbakir" area of the Anatolia Basin (Block 4226) and two in the "Konya" area of the Tuz Golu Basin (Blocks 4074 and 4075)), which are currently held by ARAR Petrol Ve Gaz Arama Uretim Pazarlama AS, a company incorporated and registered in Turkey, which is controlled by Server Fatih Alpay (the "Additional Licences"). Block 4226 is currently producing 60 BOPD. 

Following the transfer of the Additional Licences, Alpay will, following completion of such transfer, hold a 100 per cent. participating interest in sixteen licences in Turkey, making it the second largest private acreage holder in the country. Consequently, the Company will hold an indirect 75 per cent. interest in these same licences.

The Company estimates that production from the Existing Licences and the Additional Licences can be increased from approximately 250 MCFD and 60 BOPD to 10 MMCFD and 100 BOPD by the end of Q1 2014 which would generate monthly revenue of approximately US$ 3 million. The Company further estimates a large upside from the Existing Licences of 440 BCF on a proved plus probable plus possible reserves and contingent resources basis.

The purchase price for the Acquisition is US$ 4,000,000 (the "Purchase Price"), of which US$ 3,464,000 will be paid to Server Fatih Alpay upon completion of the Acquisition. The balance of US$ 536,000 will be contributed by the Company to Alpay as soon as practicable after completion, which amount shall be used by Alpay to repay existing debt owed to Server Fatih Alpay. Following completion of the Acquisition, Server Fatih Alpay will retain a 20 per cent. shareholding in Alpay. The balance of 5 per cent. will be retained (subject to any sale) by Niche Group plc.

The terms of the Acquisition provide that the costs of any work programmes and other costs, including operational, administrative and legal costs, due from Server Fatih Alpay in relation to the Existing Licences and, to the extent transferred, the Additional Licences, and any future licences acquired or transferred to Alpay, are to be carried by the Company. The terms of the Acquisition further provide that from completion of the Acquisition and for the lifetime of the Existing Licences and, to the extent transferred, Additional Licences, and any future licences acquired or transferred to Alpay, Server Fatih Alpay is to receive from the Company a 20 per cent. royalty share of production revenue (after the deduction of any government royalty and consumption tax, but before any deductions for value added tax, profit tax, income tax and any other deductible taxes) in lieu of dividends  up to a maximum total amount of £85,000,000. If the transfer of Additional Licences has not been completed within six months of the date of completion of the Acquisition (or such later time as the Company and Server Fatih Alpay may agree), the Company will be entitled to a refund from Server Fatih Alpay in respect of each Additional Licence that is not so transferred. The aggregate amount of such refunds shall be limited to US$ 2,000,000 (assuming no Additional Licences are so transferred).

DETAILS OF THE PLACING AND NOTICE OF EGM

The Company is further pleased to announce a placing of Ordinary Shares intended to raise £31,000,000 (gross) by way of a placing to be carried out in two tranches as described below (together, the "Placing").

The Company has entered into a placing agreement with Fox-Davies Capital Limited ("Fox-Davies"), Macquarie Capital (Europe) Limited ("Macquarie Capital") and FirstEnergy Capital LLP ("FirstEnergy") (the "Placing Agreement"), who are acting as joint bookrunners in connection with the Placing.

First tranche of the Placing

The first tranche of the Placing involves the issue of 110,000,000 new Ordinary Shares at a price of £0.0475 per share (the "First Placing Shares") to raise gross proceeds of £5,225,000 to Relevant Persons (as defined in the Disclaimer below) ("Placees") (the "First Placing").

The First Placing will be subject to the satisfaction of the conditions set out in the Placing Agreement, including (amongst other things), First Admission (as defined below) becoming effective and the Acquisition Agreement remaining in force and effect and no conditions to it becoming incapable of satisfaction prior to First Admission (as defined below).

The First Placing is being carried out using the Company's existing shareholder authorities and is not conditional upon the passing of any resolutions by the Company (including at the EGM). Accordingly, no further action on the part of the shareholders of the Company is required to approve the First Placing. The First Placing is not conditional on the Second Placing (as defined below) taking place. Should the Second Placing not proceed for any reason, the First Placing will continue unaffected.

Application has been made to AIM for the First Placing Shares to be admitted to trading on AIM, which is anticipated to be on 30 September 2013 ("First Admission").

The First Placing Shares will represent approximately 5.53 per cent. of the Company's enlarged issued share capital immediately following First Admission.

Second tranche of the Placing

The second tranche of the Placing involves the conditional issue of 542,631,579 new Ordinary Shares at a price of £0.0475 per Ordinary Share (the "Second Placing Shares") to Placees to raise gross proceeds of £25,775,000 (the "Second Placing").

The Second Placing will be conditional upon, inter alia, the approval of the Company's shareholders being obtained at an extraordinary general meeting (the "EGM") to be convened by the Company for 11.00 a.m. on 18 October 2013 and admission of the Second Placing Shares to trading on AIM becoming effective ("Second Admission").

Placees are referred to the Terms and Conditions set out at Appendix 1 of this Announcement for information on the other conditions of the First and Second Placing.

A circular, containing a notice of the EGM, will be sent to the shareholders of the Company outlining the terms of the Second Placing and seeking the necessary approval of the shareholders.

Application will be made to AIM for Second Admission and, subject to the requisite shareholder approval for the Second Placing being obtained at the EGM and satisfaction of the conditions referred to above, it is expected that Second Admission will become effective on 21 October 2013.

The Second Placing Shares will represent approximately 21.4 per cent. of the Company's enlarged issued share capital immediately following Second Admission.

Shareholders and Placees should note that if the Second Placing does not proceed for any reason, including if the conditions of the Second Placing are not satisfied, the First Placing, which will already have taken place, will continue unaffected.

The Placing price of £0.0475 per share under the First Placing and Second Placing (the "Placing Price") represents a discount of 13.6 per cent. to the Company closing mid-price of £0.055 on 24 September 2013, the last business day prior to the making of this announcement.

The First Placing Shares and the Second Placing Shares (together, the "Placing Shares") will be issued credited as fully paid and will rank pari passu with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after First Admission (with respect to the First Placing Shares) and second Admission (with respect to the Second Placing Shares).

Director's Participation

As part of the Placing, Mr Oisin Fanning, Executive Chairman of the Company, is subscribing for 21,052,631 Second Placing Shares at the Placing Price, Mr Fanning is not participating in the First Placing. Mr Fanning will not be offered any beneficial arrangement.

Mr Fanning currently holds 60,840,000 Ordinary Shares in the Company, representing 3.24 per cent. of the Company's existing issued share capital at the date of this announcement (and prior to the making of the Placing). Immediately after Second Admission, Mr Fanning will hold 81,892,631 Ordinary Shares in the Company, representing 3.23 per cent. of the Company's issued share capital as enlarged by the Second Placing.

Related Party Transaction

As part of the Placing, Toscafund Asset Management LLP ("Tosca"), a substantial shareholder in the Company and a related party (as defined by the AIM Rules for Companies of the London Stock Exchange ("AIM Rules")), is subscribing for 210,526,315 Placing Shares at the Placing Price. Tosca will not be offered any beneficial arrangement.

Tosca currently holds 300,778,533 Ordinary Shares in the Company, representing 16.01 per cent. of the Company's issued share capital. Immediately after Second Admission, Tosca will hold 511,304,848 Ordinary Shares, representing 20.20 per cent. of the Company's issued share capital as enlarged by the Second Placing.

The subscription by Tosca for these Ordinary Shares constitutes a related party transaction for the purposes of the AIM Rules. The Directors of the Company, having consulted with Westhouse Securities, the Company's nominated adviser, consider the terms of such subscription of shares by Tosca to be fair and reasonable insofar as the shareholders of the Company are concerned.

Use of Proceeds

The Company intends that, subject to First Admission, the Purchase Price will, on completion of the Acquisition, be funded out of the net proceeds of the First Placing. However, completion of the Acquisition is not conditional on the Placing and in the event that First Admission does not occur, or does not occur prior to the satisfaction of the conditions under the Acquisition Agreement, the Company will fund the Purchase Price out of its own existing, available resources.

In order to unlock the full potential of the Existing Licences, the Company intends to use the net balance of proceeds from the First Placing and the net proceeds of the Second Placing to develop the Existing Licences by, in the first instance:

i.   drilling three exploration wells (Goz-1, Gulhanim-3 and Sungur-1) in 2013 in an attempt to prove further reserves and fulfil licence commitments;

ii.   performing workovers on up to five existing discovery wells; and

iii.  funding the construction of an 11 km pipeline which will connect the Hatay area with the BOTAS transmission system and the upgrade of a production facility,

(together the "Development Projects").

The Company estimates that the costs associated with the Development Projects will be between approximately US$ 18.5 million and US$ 25 million (the "Development Costs") and that such Development Projects shall be conducted within the 18 months following completion of the Acquisition. Under the terms of the Acquisition Agreement, the Company has committed to contribute US$ 6,500,000 of the Development Costs before 31 March 2014.

The balance of the proceeds of the Second Placing, if any, will be used to develop further Alpay's assets, including the Additional Licences, as well as the Company's other assets.

Further details of certain of the Company's projects, programmes and licences (other than those described above) can be found on the Company's website (www.sanleonenergy.com) and in its regular market announcements. Information contained on or accessible from the Company's website is not incorporated in, and does not form a part of, this announcement.

Oisin Fanning, Executive Chairman of San Leon Energy, commented:

"The acquisition of Alpay Energy is an important milestone for San Leon, bringing both proven reserves and immediate cash flow which are directly accretive to the business.  The Company intends to use capital from this fund raising to bring to market rapidly stable production of 10 MMCFD and 120 BOPD in Turkey, with continued near term investment focused on developing the significant 2P and Contingent reserves already discovered.  In addition, the extensive land position we are acquiring through the transaction gives the Company access to significant exploration upside in proven play fairways.

The cash flow generated from the near-term development of Alpay Energy's assets is expected to make San Leon cash flow positive across the Company's entire portfolio of assets by Q2 2014 and to deliver significant cash flow by Q4 2014. This will allow the Company's longer term projects with huge upside, in Poland and Morocco, to develop while negating the need to come back to the market for further funding."

ENQUIRIES

San Leon Energy plc
Fox-Davies Capital Limited	Joint Bookrunner	[phone]
	Daniel Fox-Davies
	Oliver Stansfield
	Jonathan Evans
Macquarie Capital (Europe) Limited	Joint Bookrunner	[phone]
	John Dwyer
	Nicholas Harland
FirstEnergy Capital LLP	Joint Bookrunner	[phone]
	Hugh R. Sanderson
	Jonathan Wright
	David van Erp
Westhouse Securities Ltd	Nominated Adviser	[phone]
	Richard Johnson
	Antonio Bossi
College Hill	Investment Relations Adviser	[phone]
	David Simonson
	Alexandra Roper

DISCLAIMER

Fox-Davies, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any matters referred to in this announcement.

Macquarie Capital, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any matters referred to in this announcement.

FirstEnergy, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of FirstEnergy or for providing advice in relation to the Placing or any matters referred to in this announcement.

Westhouse Securities Ltd ("Westhouse Securities"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is the Company's nominated adviser.  Westhouse Securities' responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or to any other person. Westhouse Securities is acting exclusively for the Company and no one else in connection with the Placing, First Admission and Second Admission and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing, First Admission and Second Admission and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Westhouse Securities or for providing advice in relation to the Placing, First Admission, Second Admission or any matters referred to in this announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by, Westhouse Securities, Macquarie Capital, Fox-Davies or FirstEnergy or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

This announcement has been prepared and issued by the Company and is the sole responsibility of the Company. 

This announcement does not constitute an offer of securities for sale in the United States or any other jurisdiction. The Placing Shares have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any state or other jurisdiction the United States.  There will be no public offer of the Placing Shares in the United States. The Placing Shares are being offered and sold: (i) outside the United States in offshore transactions as such terms are defined in, and in reliance on, Regulation S under the US Securities Act; and (ii) inside the United States only to "qualified institutional buyers" as defined in Rule 144A under the Securities Act who have delivered a duly executed investor letter, pursuant to an exemption from registration under the Securities Act.  In addition, until forty days after the commencement of the Placing, an offer, sale or transfer of Placing Shares within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission (the "SEC"), any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares or the accuracy or adequacy of this announcement.  Any representation to the contrary is a criminal offence in the United States.

This announcement is not being and may not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in or into the United States and persons receiving this announcement (including brokers, custodians, trustees and other nominees) must not, directly or indirectly, mail, transmit or otherwise forward, distribute or send this announcement in or into the United States.

The Placing Shares have not been and will not be registered or qualified for distribution to the public under the securities legislation of any province or territory of Australia, Canada, Japan or South Africa or in any country, territory or jurisdiction where to do so may contravene local securities laws or regulations.  Accordingly, the Placing Shares may not, subject to certain exemptions be offered or sold directly or indirectly in or into, or to any national, citizen, or resident of Australia, Canada, Japan or South Africa.  The distribution of this announcement in or into other jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes, should inform themselves about and observe any such restrictions.  Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions.  This announcement is being sent into Australia, Canada, Japan and South Africa only to Shareholders for information in connection with the Extraordinary General Meeting and does not constitute an offer to sell, or a solicitation of an offer to buy, Placing Shares to or from any Shareholder in Australia, Canada, Japan or South Africa.

This announcement contains (or may contain) certain forward-looking statements, beliefs or opinions with respect to the Company and certain of its current plans, goals and expectations relating to its business, financial condition, results of operations and performance. These forward-looking statements involve a number of risks and uncertainties.  The Company cautions readers that forward-looking statements are not a guarantee of future performance and that actual results could differ materially from those contained in such forward-looking statements.

Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "proposes to", "goal", "believe" or other words of similar meaning.  Examples of forward-looking statements include statements regarding or which make assumptions in respect of the working capital which will be needed by the Group to fund its operations over the next twelve months.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of oil or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices as regards the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future exploration, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control.  As a result, the Company's actual future results may differ materially from the plans, goals and expectations set forth in the Company's forward-looking statements.

Any forward-looking statements made in this announcement by or on behalf of the Company speak only as at the date they are made.  Except as required by the Financial Conduct Authority, the London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances upon which any such statement is based.

No statement in this announcement is intended as a profit forecast or profit estimate and no statement in this announcement should be interpreted to mean that earnings per share for the current or future financial years would necessarily match or exceed the historical published earnings per share. Prices and values of, and incomes from, shares may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A) PERSONS WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AS AMENDED AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN ANY MEMBER STATE)  (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLES 19(1) AND 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (AS AMENDED) (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given ("Placees") will be deemed to have read and understood this announcement, including the Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained, in the Appendix.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

For Invited Placees Only

Important Information

1.          Eligible participants

This Appendix, including the terms and conditions of the Placing set out herein, is directed only at persons who are FSMA Qualified Investors.

In this Appendix:

(a)      "you" or "Placee" means any person who is, or becomes, committed to subscribe for Placing Shares under the Placing pursuant to a legally binding commitment given to Macquarie Capital, FirstEnergy or Fox-Davies, as the case may be, each acting as agent for the Company; and

(b)      terms defined elsewhere in this announcement have the same meanings, unless the context requires otherwise.

Members of the public are not eligible to take part in the Placing.

2.          Overseas jurisdictions

The distribution of this announcement and the Placing and/or the issue of Placing Shares pursuant to the Placing in certain jurisdictions may be restricted by law.  FSMA Qualified Investors who seek to participate in the Placing must inform themselves about and observe any such restrictions.  In particular, this announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia, Japan or South Africa or in any jurisdiction in which such publication or distribution is or may  be unlawful.  Furthermore, this announcement does not constitute an offer or invitation (or a solicitation of any offer or invitation) to subscribe for or acquire, sell or purchase or otherwise deal in Placing Shares in the United States, Canada, Australia, Japan or South Africa or in any other jurisdiction in which any such offer, invitation or solicitation is or would be unlawful.  No public offer of securities of the Company is being made in the United Kingdom, United States or elsewhere.

The Placing Shares have not been and will not be registered under the US Securities Act of 1933 (as amended) (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and accordingly may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, registration under the Securities Act.  The Placing is being made outside the United States only in "offshore transactions" (as defined in Regulation S under the Securities Act) meeting the requirements of Regulation S under the Securities Act and may be made to persons within the United States who are "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act, pursuant to a transaction that is exempt from, or not subject to, the registration requirements of the Securities Act.  Persons receiving this announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mail, directly or indirectly, in connection with the Placing.

3.          Placing

3.1        Macquarie Capital, FirstEnergy and Fox-Davies (together the "Joint Bookrunners") are arranging the Placing as agents for and on behalf of the Company.  The Joint Bookrunners, in consultation with the Company, will, determine the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee.  The placing obligations of each of the Joint Bookrunners in connection with the Placing are set out in the Placing Agreement (further details of which are described in paragraph 7 of this Appendix).  No commissions will be paid to or by Placees in respect of their agreement to subscribe for any Placing Shares.

3.2        Each Placee will be required to pay to the relevant Joint Bookrunner, on the Company's behalf, the Placing Price as the subscription sum for each Placing Share agreed to be subscribed by it under the Placing in accordance with the terms and conditions set out in or referred to in this Appendix.  Each Placee's obligation to subscribe and pay for Placing Shares under the Placing will be owed to each of the Company, Macquarie Capital, FirstEnergy and Fox-Davies.  Each Placee will be deemed to have read and understood this announcement in its entirety.  To the fullest extent permitted by law and applicable FCA rules, neither Macquarie Capital nor any other Macquarie Person, nor FirstEnergy nor any other FirstEnergy Person, nor Fox-Davies nor any other Fox-Davies Person, will have any liability to Placees or to any person other than the Company in respect of the Placing.  To the fullest extent permitted by law and applicable FCA rules, the Company will have no liability to Placees or to any person in respect of the Placing.

3.3        Various dates referred to in this announcement are stated on the basis of the expected timetable for the Placing.  It is possible that some of these dates may be changed.  The expected date for First Admission is currently 1 October 2013. The expected date for Second Admission is currently 22 October 2013 and, in any event, the latest date for Second Admission is 30 November 2013 (the "Long-Stop Date").

4.          Participation and settlement

4.1        Participation in the Placing is only available to persons who are invited to participate in it by Macquarie Capital, FirstEnergy or Fox-Davies, as the case may be.

4.2        A Placee's commitment to subscribe for a fixed number of Placing Shares at the Placing Price under the Placing will be agreed orally (or, if agreed previously, may be confirmed orally) with Macquarie Capital, FirstEnergy or Fox-Davies.  Such agreement will constitute a legally binding and irrevocable commitment on your part to subscribe for that number of Placing Shares at the Placing Price on the terms and conditions set out or referred to in this Appendix and subject to the Company's constitution, such legally binding and irrevocable commitment is subject only to the Placing conditions set out in paragraph 8 of this Appendix.  Following such legally binding and irrevocable commitment, a contract note (a "Contract Note") will be despatched to you by Macquarie Capital, FirstEnergy or Fox-Davies, as the case may be, confirming: (i) the number of Placing Shares for which you have agreed to subscribe; (ii) the aggregate amount you will be required to pay for those Placing Shares; (iii) all relevant settlement information; and (iv) settlement instructions.  It is expected that Contract Notes for the First Placing will be despatched on 25 September 2013, that the "trade date" for the First Placing for settlement purposes will be 25 September 2013 and that the "settlement date" for the First Placing will be 30 September 2013. It is expected that Contract Notes for the Second Placing will be despatched on 18 October 2013, that the "trade date" for the Second Placing for settlement purposes will be 25 September 2013 and that the "settlement date" for the Second Placing will be 21 October 2013.

4.3        At such points, each Placee will have an immediate, separate, irrevocable and legally binding obligation, owed to the Company and to Macquarie Capital, FirstEnergy or Fox-Davies, as the case may be, to pay to Macquarie Capital, FirstEnergy or Fox-Davies, as the case may be (or as they may direct), in cleared funds an amount equal to the product of the Placing Price and such number of Placing Shares that such Placee has agreed to acquire.

4.4        A settlement instruction form will accompany each Contract Note and, upon receipt, should be completed and returned in accordance with the instructions on it by the time and date stated therein.

4.5        Settlement of transactions in the Placing Shares will take place within the CREST system, subject to certain exceptions, on a "delivery versus payment" (or "DVP") basis.  The Joint Bookrunners reserve the right to require settlement for and/or delivery to any Placee of any Placing Shares by such other means as it may deem appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

4.6        If your Placing Shares are to be delivered to a custodian or settlement agent, you should ensure that the Contract Note is copied and delivered immediately to the appropriate person within that organisation.

5.          No Prospectus

No prospectus has been or will be submitted for approval by the FCA in relation to the Placing or the Placing Shares.  Placees' commitments in respect of Placing Shares will be made solely on the basis of the information contained in this announcement and on the terms contained in it and subject to the further terms set out in the Contract Note to be despatched to you by Macquarie Capital, FirstEnergy or Fox-Davies, as the case may be (details of which are set out in paragraph 4.2 of this Appendix).

6.          Placing Shares

6.1        The Placing Shares will, when issued, be credited as fully paid and will rank in full for all dividends declared, made or paid after their issue and otherwise will rank pari passu in all respects with the existing issued Ordinary Shares.

6.2        Application has been made for the admission of the First Placing Shares to trading on AIM.  It is expected that First Admission will take place, and dealings in the First Placing Shares will commence, on 30 September 2013.

6.3        Application will be made for the admission of the Second Placing Shares to trading on AIM.  It is expected that Second Admission will take place, and dealings in the Second Placing Shares will commence, on 21 October 2013.

7.          Placing Agreement

7.1        The Joint Bookrunners have entered into the Placing Agreement with the Company under which each of Macquarie Capital, FirstEnergy and Fox-Davies has agreed, on a conditional basis, to use all reasonable endeavours as agents of the Company to procure Placees for the Placing.  The Placing is not being underwritten.

7.2        The Company hereby irrevocably confirms that the appointments in of the Joint Bookrunners confer on each of the Joint Bookrunners all powers, authorities and discretions on behalf of the Company which are necessary for, or incidental to, the carrying out of the Placing of the Placing Shares by the Joint Bookrunners as agents for the Company including, without limitation, authority to appoint their Affiliates as sub-agents or to delegate the exercise of any of their powers, authorities or discretions to their Affiliates as the Joint Bookrunners see fit and the Company hereby agrees to ratify and confirm everything which the Joint Bookrunners or any of their respective Affiliates shall lawfully do in the exercise of such appointment, powers, authorities and discretions.

8.          Placing conditions and termination rights

8.1        The obligations of the Joint Bookrunners in respect of the Placing are conditional upon certain conditions which are set out in the Placing Agreement.

8.2        The First Placing is conditional, inter alia, on: (i) the Placing Agreement not being terminated in accordance with its terms; (ii) First Admission becoming effective no later than 8.00 a.m. 1 October 2013 or such other date as may be agreed between the Company and the Joint Bookrunners; (iii) certain conditions relating to the Acquisition; and (iv) the Placing Agreement becoming unconditional in respect of the First Placing Conditions. The First Placing is not conditional on the EGM or on the passing of the EGM Resolutions. If the Second Placing does not proceed for any reason, including if the conditions of the Second Placing are not satisfied, the First Placing, to the extent that it has already taken place, will continue unaffected.

8.3        The Second Placing is conditional, inter alia, on: (i) the passing, without amendment, of the EGM Resolutions; (ii) the Placing Agreement not being terminated in accordance with its terms; (iii) First Admission having become effective and Second Admission becoming effective no later than 8.00 a.m. on the Second Long-Stop Date or such other date as may be agreed between the Company and the Joint Bookrunners; (iv) certain conditions relating to the Acquisition; and (v) the Placing Agreement becoming unconditional in respect of the Second Placing Conditions.

8.4        Certain conditions may be waived, in whole or in part, and the time for satisfaction of such conditions may be extended by the Joint Bookrunners (acting in their absolute discretion and without any obligation to make any such waiver or extension) by express written notice to the Company. If any condition is not fulfilled or waived by the Joint Bookrunners by the relevant time, the Placing will lapse and your rights and obligations in respect of the Placing will cease and terminate at such time.

8.5        The Placing Agreement may be terminated by the Joint Bookrunners at any time prior to Second Admission in certain circumstances including, inter alia, following a material breach of the Placing Agreement by the Company, any material changes to the terms and conditions of the Acquisition, or the occurrence of certain force majeure events.  The exercise of any right of termination pursuant to the Placing Agreement, any waiver of any condition in the Placing Agreement and any decision by the Joint Bookrunners whether or not to extend the time for satisfaction of any condition in the Placing Agreement or otherwise in respect of the Placing will be within the absolute discretion of the Joint Bookrunners.  The Joint Bookrunners will not have any liability to you in respect of any such termination, waiver or extension or any decision to exercise or not exercise any such right of termination, waiver or extension.

9.          Payment default

9.1        Your entitlement to receive Placing Shares will be conditional on the relevant Joint Bookrunner's receipt of payment in full for such Placing Shares by the relevant time to be stated in the Contract Note referred to in paragraph 4.2 of this Appendix, or by such later time and date as such Joint Bookrunner may in its absolute discretion determine, and otherwise in accordance with the terms of that Contract Note.  The relevant Joint Bookrunner may, in its absolute discretion, waive such condition, and will not be liable to you for any decision to waive or not to waive such condition.

9.2        If you fail to make such payment by the required time for any Placing Shares: (i) the Company may release itself, and (if at its absolute discretion it decides to do so) will be released from, all obligations it may have to allot and/or issue any such Placing Shares to you or at your direction which are then unallotted and/or unissued; (ii) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any such Placing Shares to the full extent permitted under its constitution or otherwise by law and to the extent that you then have any interest in or rights in respect of any such shares; (iii) the Company or, as applicable, the relevant Joint Bookrunner may sell (and each of them is irrevocably authorised by you to do so) all or any such Placing Shares on your behalf and then retain from the proceeds of such sale, for the account and benefit of the Company or, where applicable, such Joint Bookrunner: (a) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares; (b) any amount required to cover any stamp duty or stamp duty reserve tax arising on the sale; and (c) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale; and (iv) you will remain liable to the Company and to the Joint Bookrunners for the full amount of any losses and of any costs which any of them may suffer or incur as a result of: (a) not receiving payment in full for such Placing Shares by the required time; and/or (b) the sale of any such Placing Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it.  Interest may be charged in respect of payments not received by the relevant Joint Bookrunner for value by the required time referred to above at the rate of two percentage points above the base rate of Barclays Bank plc.

10.        Placees' representations, warranties and undertakings to the Company and the Joint Bookrunners

By agreeing with Macquarie Capital, FirstEnergy or Fox-Davies, as the case may be, to subscribe for Placing Shares under the Placing you irrevocably acknowledge, represent, confirm, warrant and undertake to, and agree with, each of the Company, Macquarie Capital, FirstEnergy and Fox-Davies, in each case as a fundamental term of your application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to you (or at your direction), that:

(a)      you agree to and accept all of the terms and conditions set out in this announcement (including, but not limited to, this Appendix);

(b)      no prospectus, admission document or other offering document has been or will be prepared in connection with the Placing Placing and you have not received a prospectus, admission document or other offering document in connection with the Placing Placing and/or the Placing Shares;

(c)       the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business and the Company's most recent AIM admission document and financial statements and you are able to obtain or access such information without undue difficulty, and are able to obtain access to the Company's published financial statements or comparable information concerning any other publicly traded company without undue difficulty;

(d)      your rights and obligations in respect of the Placing will terminate only in the circumstances referred to in this announcement and will not be subject to rescission or termination by you in any circumstances;

(e)      this announcement, which has been prepared and issued by the Company, is the sole responsibility of the Company and none of the Joint Bookrunners, nor any of their affiliates nor any person acting on their behalf or any of their affiliates have, or shall have, any liability for any information, representation or statement contained in this announcement or any information previously published by or on behalf of the Company in connection with the Placing;

(f)       you have not been, and will not be, given any warranty or representation in relation to the Placing Shares or to the Company or to any other member of its Group in connection with the  Placing;

(g)      you have not relied on any representation or warranty in reaching your decision to subscribe for Placing Shares under the Placing;

(h)      you are not a client of any of Macquarie Capital, FirstEnergy or Fox-Davies in relation to the Placing and none of Macquarie Capital, FirstEnergy or Fox-Davies is acting for you in connection with the Placing and none of Macquarie Capital, FirstEnergy or Fox-Davies will be responsible to you in respect of the Placing for providing protections afforded to their clients;

(i)       you have not been, and will not be, given any warranty or representation by any Macquarie Person, FirstEnergy Person or any Fox-Davies Person in relation to any Placing Shares, the Company or any other member of its Group and no Macquarie Person, FirstEnergy Person nor any Fox-Davies Person will have any liability to you for any information contained in this announcement or which has been published by the Company or for any decision by you to participate in the Placing based on any such information or on any other information provided to you;

(j)       in making your decision to acquire any Placing Shares, you: (i) have not relied on any investigation that Macquarie Capital, FirstEnergy or Fox-Davies or any person acting on their behalf may have conducted with respect to the Placing Shares or the Company; (ii) have made your own investment decision regarding the Placing Shares based on your own knowledge (and information you may have or which is publicly available) with respect to the Placing Shares and the Company; (iii) have had access to such information as you deem necessary or appropriate in connection with your acquisition of any Placing Shares; and (iv) have sufficient knowledge and experience in financial and business matters and expertise in assessing credit, market and all other relevant risk and are capable of evaluating, and have evaluated, independently, the merits, risks and suitability of purchasing the Placing Shares;

(k)      you understand that by your acquisition or holding of any Placing Shares you are assuming, and are capable of bearing, the risk of loss that may occur with respect to the Placing Shares, including the possibility that you may lose all or a substantial portion of your investment in any Placing Shares, and you will not look to the Company, any Macquarie Person, any FirstEnergy Person or any Fox-Davies Person for all or part of any such loss or losses you may suffer;

(l)       you have neither received nor relied on any confidential price-sensitive information concerning the Company in accepting this invitation to participate in the Placing;

(m)     you will pay the full subscription amount as and when required in respect of all Placing Shares allocated to you and will do all things necessary on your part to ensure that payment for such Placing Shares and their delivery to you or at your direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that you have in place with a Joint Bookrunner or put in place with a Joint Bookrunner with its agreement;

(n)      you are entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to you and you have complied, and will fully comply, with all such laws (including where applicable, the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007) and have obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such subscription, and you will provide promptly to Macquarie Capital, FirstEnergy and Fox-Davies such evidence, if any, as to the identity or location or legal status of any person which Macquarie Capital, FirstEnergy and Fox-Davies (or any of them) may request from you in connection with the Placing (for the purpose of its complying with any such laws or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Macquarie Capital, FirstEnergy or Fox-Davies (as applicable) on the basis that any failure by you to do so may result in the number of Placing Shares that are to be allotted and/or issued to you or at your direction pursuant to the Placing being reduced to such number, or to nil, as Macquarie Capital, FirstEnergy and Fox-Davies may decide at their sole discretion;

(o)      you, and, if different, the beneficial owner of the Placing Shares, are not and at the time the Placing Shares are acquired, will not be residents of Australia, Canada, Japan, or South Africa or any other jurisdiction in which the Placing or any connected offer, invitation or solicitation is or would be unlawful;

(p)      you have complied and will comply with all applicable provisions of FSMA with respect to anything done or to be done by you in relation to any Placing Shares in, from or otherwise involving the United Kingdom and you have not made or communicated or caused to be made or communicated, and you will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to Placing Shares in contravention of section 21 of FSMA;

(q)      you or your agent who manages investments on your behalf on a discretionary basis are a FSMA Qualified Investor;

(r)       you are acting as principal only in respect of the Placing or, if you are acting for any other person: (i) you are duly authorised to do so; (ii) you are and will remain liable to the Company and/or Macquarie Capital, FirstEnergy and Fox-Davies for the performance of all your obligations as a Placee in respect of the Placing (regardless of the fact that you are acting for another person); (iii) you are both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of Directive 2003/71/EC (known as the Prospectus Directive) acting as agent for such person; and (iv) such person is either: (a) a FSMA Qualified Investor; or (b) a"client" (as defined in section 86(2) of FSMA) of yours that has engaged you to act as his agent on terms which enable you to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;

(s)      nothing has been done or will be done by you in relation to the Placing or to any Placing Shares that has resulted or will result in any person being required to publish a prospectus in relation to the Company or to any Ordinary Shares or Placing Shares in accordance with FSMA or the Prospectus Rules or in accordance with any other laws applicable in any part of the European Union or the European Economic Area;

(t)       you are not, and are not acting in relation to the Placing as nominee or agent for, a person who is or may be liable to stamp duty or stamp duty reserve tax in respect of any agreement to acquire (or any acquisition of) shares or other securities (including, without limitation, under sections 67, 70, 93 or 96 of the Finance Act 1986 concerning depositary receipts and clearance services), and the allocation, allotment, issue and/or delivery to you, or any person specified by you for registration as holder, of Placing Shares will not give rise to a liability under any such section; (ii) the person whom you specify for registration as holder of Placing Shares will be you or your nominee or (as applicable) the person for whom you are acting or its nominee; (iii) you and any person for whom you are acting will acquire Placing Shares on the basis that they will be allotted to the CREST stock account of the relevant Joint Bookrunner and such Joint Bookrunner will then hold them as settlement agent and as nominee for you or such person until settlement in accordance with such Joint Bookrunner's settlement instructions; (iv) payment for Placing Shares will be made simultaneously on their receipt in your stock account on a "delivery versus payment" (or "DVP") basis; and (v) neither Macquarie Capital, FirstEnergy nor Fox-Davies nor the Company will be responsible to you or anyone else for any liability to pay stamp duty or stamp duty reserve tax resulting from any breach of, or non-compliance, with this paragraph;

(u)      you will not treat any Placing Shares in any manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of your participation in the Placing will contravene any legislation applicable in any territory or jurisdiction in any respect or cause the Company or Macquarie Capital or FirstEnergy or Fox-Davies to contravene any such legislation in any respect;

(v)      you understand and acknowledge that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and are being offered and sold to you in a transaction that is exempt from, or not subject to, the registration requirements of the Securities Act and not involving any public offering;

(w)     you represent and warrant that, unless you duly execute and deliver to the Company and, as the case may be, Macquarie, a Macquarie Person, Fox-Davies, a Fox-Davies Person, FirstEnergy, or a FirstEnergy Person a US purchaser letter in the form provided to you by the relevant Joint Bookrunner or an affiliate of the same (the "US Purchaser Letter") in which you will make certain acknowledgements, representations, confirmations, warranties and undertakings (in addition to those contained in paragraph 11 of this Appendix), you: (i) are, or at the time the Placing Shares are acquired, you will be, the beneficial owner of such Placing Shares and are neither a person located in the United States nor acting on behalf of a person in the United States; (b) are, or at the time the Placing Shares are acquired, you will be, acquiring the Placing Shares in an "offshore transaction" (as defined in Regulation S under the Securities Act); and (c) will not offer or sell, directly or indirectly, any of the Placing Shares in the United States except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

(x)      each of Macquarie Capital, FirstEnergy and Fox-Davies are entitled, but shall be under no obligation to, satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any other Macquarie Person, FirstEnergy Person or Fox-Davies Person (as applicable) or any person associated with any Macquarie Person, FirstEnergy Person or Fox-Davies Person (as applicable) to do so;

(y)      time is of the essence as regards your obligations under this Appendix;

(z)      this Appendix and any contract (whether oral or written (and including, but not limited to the Contract Note referred to in paragraph 4.2 of this Appendix)) which may be entered into between you and Macquarie Capital, FirstEnergy or Fox-Davies and/or the Company (as the case may be), and all non-contractual obligations arising between you and Macquarie Capital, FirstEnergy or Fox-Davies and/or the Company (as the case may be), pursuant to or in connection with it or the Placing, will be governed by and construed in accordance with the laws of England, for which purpose you submit (for yourself and on behalf of any person on whose behalf you are acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute, or matter arising out of or relating to this Appendix or such contract, except that each of the Company, Macquarie Capital, FirstEnergy and Fox-Davies will have the right to bring enforcement proceedings in respect of any judgment obtained against you in the English courts or in the courts of any other relevant jurisdiction;

(aa)    each right or remedy of the Company, Macquarie Capital, FirstEnergy or Fox-Davies provided for in this Appendix is in addition to any other right or remedy which is available to such person and the exercise of any such right or remedy in whole or in part will not preclude the subsequent exercise of any such right or remedy;

(bb)    any  document that is to be sent to you in connection with the Placing will be sent at your risk and may be sent to you at any address provided by you to Macquarie Capital, FirstEnergy or Fox-Davies;

(cc)     you shall indemnify and hold each of the Company, Macquarie Capital, FirstEnergy and Fox-Davies harmless, on an after-tax basis, from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach by you of the terms and conditions included in this Appendix;

(dd)    your commitment to acquire Placing Shares on the terms and conditions set out in this Appendix and in the Contract Note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and you will have no right to be consulted or require that your consent be obtained with respect to the Company's conduct of the Placing.  The foregoing acknowledgements, representations, warranties, undertakings and confirmations are given for the benefit of the Company as well as Macquarie Capital, FirstEnergy and Fox-Davies;

(ee)    nothing in this Appendix will exclude any liability of any person for fraud on its part, and all times and dates in this announcement are subject to amendment at the discretion of Macquarie Capital, FirstEnergy and Fox-Davies, except that in no circumstances will the dates scheduled for First Admission and Second Admission be later than the Long-Stop Date; and

(ff)      none of your rights or obligations in respect of the Placing is conditional on any other person agreeing to subscribe any Placing Shares under the Placing and no failure by any other Placee to meet any of its obligations in respect of the Placing will affect any of your rights or obligations in respect of the Placing.

11.        Placees' additional US representations, warranties and undertakings

In addition to the foregoing, if you are located in the United States, by agreeing to subscribe for Placing Shares under the Placing, you must duly execute and deliver to the Company and, as the case may be, Macquarie, a Macquarie Person, Fox-Davies, a Fox-Davies Person, FirstEnergy, or a FirstEnergy Person, a US purchaser letter in which you will irrevocably acknowledge, represent, confirm, warrant and undertake to, and agree with, each of the Company and the relevant Joint Bookrunner or an affiliate of the same, in each case as a fundamental term of your application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to you or at your direction, that:

(a)      you understand that no offering document or prospectus has been prepared;

(b)      you acknowledge that: (i) you may not rely on any investigation that, as the case may be, Macquarie, a Macquarie Person, Fox-Davies, a Fox-Davies Person, FirstEnergy, or a FirstEnergy Person, any of its affiliates or any person acting on its or their behalf may have conducted, and none of such persons has made any representation to you, express or implied, with respect to the Placing Shares or the Company; (ii) you have conducted your own investigation with respect to the Placing Shares and the Company; and (iii) you have had access to such financial and other information and have been afforded the opportunity to ask such questions of representatives of the Company, and receive answers thereto, as you deem necessary in connection with your decision to purchase the Placing Shares;

(c)       you are a sophisticated investor having such knowledge and experience in financial and investment matters as to be capable of evaluating the merits and risk of an investment in the Placing Shares, and you are (or any account for which you are purchasing the Placing Shares is) a "qualified institutional buyer" as defined in Rule 144A under the Securities Act.  You have made an independent investigation and reached your own independent conclusions regarding the nature of the Placing Shares and the risks relating thereto, in general and in relation to your particular circumstances.  The decision to purchase the Placing Shares was based upon this independent appraisal and the advice of your own counsel and other advisers, to the extent you considered it appropriate to seek such advice;

(d)      you are acquiring the Placing Shares for your own account (or for accounts as to which you exercise sole investment discretion and have authority to make, and do make, the statements contained herein and in the US Purchaser Letter) for investment purposes and not with a view to any distribution of the Placing Shares;

(e)      you understand that: (i) the Placing Shares are not being, and will not be, registered under the Securities Act; (ii) the Placing Shares are being offered and sold to you in a transaction that is exempt from the registration requirements of the Securities Act; and (iii) the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act;

(f)       you agree:

(i)       that in the event that you wish to dispose of any of the Placing Shares, you will not do so except:

(A)      in an offshore transaction meeting the requirements of Rule 904 of Regulation S under the Securities Act; or

(B)      in accordance with Rule 144A under the Securities Act; or

(C)      pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if available); and in each case in accordance with all applicable securities laws of the states of the United States and other jurisdictions;

(ii)      not to deposit the Placing Shares in an unrestricted depositary receipt facility for so long as the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act; and

(iii)      to notify any transferee to whom you subsequently reoffer, resell, pledge or otherwise transfer the purchased securities of the foregoing restrictions on transfer;

(g)      you are entitled to purchase the Placing Shares under the laws of all relevant jurisdictions which apply to you and agree that you will comply with applicable law with regard to any resale of any Placing Shares;

(h)      you confirm that, to the extent you are purchasing the Placing Shares for the account of one or more other persons: (i) you have been duly authorized to sign the US Purchaser Letter and make the confirmations, acknowledgements and agreements set forth herein and in the US Purchaser Letter on their behalf; and (ii) the provisions of the US Purchaser Letter constitute legal, valid and binding obligations of you and any other person for whose account you are acting; and

(i)       you acknowledge that the Company and, as the case may be, Macquarie, a Macquarie Person, Fox-Davies, a Fox-Davies Person, FirstEnergy, or a FirstEnergy Person and others will rely upon your confirmations, acknowledgments and agreements set forth herein and in the US Purchaser Letter, and you agree to notify the Company and, as the case maybe, Macquarie, a Macquarie Person, Fox-Davies, a Fox-Davies Person, FirstEnergy, or a FirstEnergy Person promptly in writing if any of your representations or warranties herein or in the US Purchaser Letter ceases to be accurate and complete.  In this connection, you irrevocably authorize the Company and, as the case maybe, Macquarie, a Macquarie Person, Fox-Davies, a Fox-Davies Person, FirstEnergy, or a FirstEnergy Person to produce the US Purchaser letter and any related documentation as may be required in any administrative or legal proceeding, official inquiry or in any other circumstances where this may be necessary or desirable with respect to the matters covered hereby.

DEFINITIONS

"AIM" means AIM, a market operated by the London Stock Exchange.

"AIM Rules"means the AIM Rules for Companies published by the London Stock Exchange (as amended or reissued from time to time).

"Company" means San Leon Energy PLC.

"Contract Note"has the meaning given to it in paragraph 4.2 of this Appendix.

"CREST" means the relevant system (as defined in the Regulations) in respect of which Euroclear is the Operator (as defined in the Regulations).

"Directors" means the directors of the Company.

"EGM" means the extraordinary general meeting of the Company at which the EGM Resolutions are to be considered, and if thought fit, passed.

"EGM Resolutions"means the resolutions numbered 1, 2 and 3 to be considered, and if thought fit, passed at the EGM.

"Euroclear" means Euroclear UK & Ireland Limited.

"FCA" means the Financial Conduct Authority.

"First Admission" means the admission of the First Placing Shares to trading on AIM in accordance with the AIM Rules.

"FirstEnergy" means FirstEnergy Capital LLP.

"FirstEnergy Person"means any person being: (i) FirstEnergy; (ii) an undertaking which is a subsidiary undertaking of FirstEnergy; (iii) a parent undertaking of FirstEnergy or a subsidiary undertaking of any such parent undertaking; or (iv) a director, officer, agent or employee of any such person.

"First Placing" means the issue to Placees of 110,000,000 new Ordinary Shares at a price of £0.0475 per share to raise gross proceeds of £5,225,000 million under the Company's existing authorities, pursuant to the Placing Agreement and on and subject to the terms and conditions set out or referred to in this Appendix.

"First Placing Shares" means Placing Shares issued to Placees in the First Placing.

"Fox-Davies" means Fox-Davies Capital Limited.

"Fox-Davies Person"means any person being: (i) Fox-Davies; (ii) an undertaking which is a subsidiary undertaking of Fox-Davies; (iii) a parent undertaking of Fox-Davies or a subsidiary undertaking of any such parent undertaking; or (iv) a director, officer, agent or employee of any such person.

"FSMA" means the Financial Services and Markets Act 2000 (as amended) including any regulations made pursuant thereto.

"FSMA Qualified Investor" means a person who is a "qualified investor" as referred to at section 86(7) of FSMA and at or to whom any private communication relating to the Company that is a "financial promotion" (as such term is used in relation to FSMA) may lawfully be issued, directed or otherwise communicated without the need for it to be approved, made or directed by an "authorised person" as referred to in FSMA.

"Group" means the group of which the Company is the parent and its subsidiary undertakings are members.

"London Stock Exchange"means London Stock Exchange plc.

"Long-Stop Date" has the meaning given to it in paragraph 3.3 of this Appendix.

"Macquarie Capital"means Macquarie Capital (Europe) Limited.

"Macquarie Person"means any person being: (i) Macquarie Capital; (ii) an undertaking which is a subsidiary undertaking of Macquarie Capital; (iii) a parent undertaking of Macquarie Capital or a subsidiary undertaking of any such parent undertaking; or (iv) a director, officer, agent or employee of any such person.

"Ordinary Shares"means the ordinary shares of €0.05 in the issued share capital of the Company.

"Placees" has the meaning given to it in paragraph 1(a) of this Appendix.

"Placing" means the First Placing and the Second Placing.

"Placing Agreement"means the conditional placing agreement relating to the Placing between the Company, Macquarie Capital, FirstEnergy and Fox-Davies to be dated the same date as this announcement and as further described in paragraph 7 of this Appendix.

"Placing Price"means £0.0475 pence per Placing Share.

"Placing Shares" means the 652,631,579 new Ordinary Shares to be made available to Placees for subscription under the Placing.

"Prospectus Rules"means the Prospectus Rules of the UK Listing Authority made under Part VI of FSMA.

"Regulations" means the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended).

"Second Admission" means the admission of the Second Placing Shares to trading on AIM in accordance with the AIM Rules.

"Second Placing" means the conditional issue to Placees of be 542,631,579 new Ordinary Shares at a price of £0.0475 per share to raise gross proceeds of £25,775,000, pursuant to the Placing Agreement and on and subject to the terms and conditions set out or referred to in this Appendix.

"Second Placing Shares" means Placing Shares issued to Placees in the Second Placing.

"Securities Act"has the meaning given to it in paragraph 2 of this Appendix.

"Shareholders" means holders of Ordinary Shares, from time to time.

"United Kingdom"means the United Kingdom of Great Britain and Northern Ireland.

"UK Listing Authority" means the FCA acting in its capacity as the competent authority in the United Kingdom under Part VI of FMSA.

"United States"means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

"US Purchaser Letter"has the meaning given to it in warranty (w) found in paragraph 10 of this Appendix.

 

END

 

 

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