Placing, Directorate Change, Lifting of Suspension

RNS Number : 2503W

Gold Oil PLC

24 January 2013

 



24 January 2013

Gold Oil PLC

("Gold Oil" or "the Company")

Placing, Appointment of New Director, Lifting of Suspension of Trading and Strategy Update

Gold Oil (AIM:GOO), an independent oil and gas exploration and production company focused on identifying oil and gas interests in Latin America, is pleased to announce:

·     that trading of the Company's ordinary shares of 0.025 pence each ("Ordinary Shares") on AIM is to resume today;

·     the Company has raised £2.085m, before expenses, by way of a placing of 278,000,000 new Ordinary Shares ("Placing Shares") at a subscription price of 0.75 pence per Placing Share ("the Placing");

·     that it has appointed William Colvin as an additional non-executive director of the Company with effect from today; and

·     a strategy update.

1.         Placing

The Placing Shares have been placed unconditionally, save as to their Admission. Application has been made for admission of the Placing Shares to trading on AIM and admission is expected to take place on or around 28 January 2013. 

The net proceeds of the Placing will be used to strengthen the Company's balance sheet and for working capital (including the payment of creditors such as BGP (CNPC)).  The remaining balance of the net proceeds will principally be used to consolidate Gold Oil's position in the Nancy Burdine field and for optimisation of the field.

The issue of the Placing Shares is to be effected by way of a cashbox placing. The Company will allot and issue the Placing Shares on a non-pre-emptive basis to the placees in consideration for Kerman Shelf 20 Limited transferring its holdings of ordinary shares and redeemable preference shares in Gold Oil Capital (Jersey) Limited to the Company. Accordingly, instead of receiving cash as consideration for the issue of Placing Shares, at the conclusion of the Placing the Company will own the entire issued share capital of Gold Oil Capital (Jersey) Limited whose only asset will be its cash reserves, which will represent an amount approximately equal to the net proceeds of the Placing.

The Placing is not a rights issue or open offer and the Placing Shares will not be offered generally to shareholders on a pre-emptive basis.  The Directors believe the extra cost and delay involved in a rights issue or open offer would not be in the best interests of the Company in the circumstances and, accordingly, the Board considers that it is in the best interests of the Company and shareholders as a whole for the funds to be raised through the Placing. 

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of 0.025 pence per share in the capital of the Company ("Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

The Placing Shares will together represent approximately 23.7 per cent. of the Company's enlarged issued share capital and the total number of shares in issue following completion of the Placing will be 1,169,513,025.

Rudolph Berends, a director of the Company will subscribe for 36,333,335 new Ordinary Shares in the Placing.  In addition, Mrs Parvisi, a substantial shareholder in the Company will subscribe for 84,000,000 new Ordinary Shares in the Placing.  The subscription by Rudolph Berends and Mrs Parvisi are deemed to be related party transactions for the purposes of rule 13 of the AIM Rules. For the purpose of the AIM Rules, the independent Director of Gold Oil (being Mr Camilo Merendoni), having consulted with the Company's nominated adviser, considers that the terms of the subscription by Mr Berends and Mrs Parvisi  are fair and reasonable insofar as the shareholders are concerned.

It is intended that Mr Berends will be granted options to subscribe for 22,000,000 new Ordinary Shares with an exercise price of 0.75 pence per share, subject to the approval of the non executive Directors.   

2.         Appointment of an additional non-executive director

William Colvin ("Bill")

Gold Oil is pleased to announce the appointment of William Colvin (aged 54) as a non-executive Director of the Company, effective today.

William has wide experience in the oil and gas, and healthcare sectors in senior management and board positions of large corporations. He was Finance Director of British-Borneo Oil & Gas Plc from 1992 to 1999. From 1990 to 1992, William was Finance Manager/Director at Oryx UK Energy. From 1984 to 1989, he worked in a variety of financial roles for Atlantic Richfield (ARCO) Inc. He qualified as a Scottish Chartered Accountant in 1982 and holds a Bachelor of Commerce degree from the University of Edinburgh. William is currently a non-executive Director of Energy XXI, the independent oil & natural gas exploration and production company, and Infrastrata PLC.

The following disclosures are being made under Schedule 2 (g) of the AIM Rules following William's appointment to the Board of Gold Oil. William Colvin is or has been a director of the following companies during the past five years.

Current Directorships:

Elizabeth Finn Homes Limited                       

Elizabeth Finn Care

Brigantes Energy Limited

S C Commerce Limited

Scottish Care

Oasis Dental Limited

Energy XXI (Bermuda) Limited

Infrastrata PLC

Corfe Energy

Duke Street Capital Oasis Holdings Limited

Hangar Records (UK) Limited

  Previous Directorships:

Southern Cross Healthcare Group Plc

The West Hill Golf Club (1959) Limited

BSN Medical

3.         Strategy Update

Colombia

Nancy-Burdine Field

Further to the announcement of 19 November 2012, the Company's strategy remains focused on stabilising production at Nancy Burdine, currently in line with historical rates at 450-600 BOPD, 25 API Gravity. New trading and transportation contracts have been signed with Ecopetrol for the next six months. Gold Oil's strategy is also to consolidate its holding from 60% to 81.6% by buying out most of the minority partners. The Company is also focused on implementing arrangements with local neighbouring communities for a new Social Program, as dictated by the new regulations.  Technical and economic discussions are also underway with Ecopetrol and other state agencies on improving the regional infrastructure.

Rosa Blanca Block

Discussions are underway with a national investor group to undertake exploration activities in the Rosa Blanca block.

Peru

Block Z-34

In respect of the farm out process for the Block Z-34, the revised strategy, as announced on 7 September 2012 continues to focus on open discussions with interested companies about the conditions for a potential farm-in; this has been generally well received. Discussions with potential candidates are ongoing.

Additionally, the Company is working on a new permit for additional seismic and future well locations. EIA permits have become quite a lengthy process in Peru as the Ministry of Energy and Mines is understaffed to cope with the large amount of applications by various companies. Gold Oil has presented a Force Majeure letter to PeruPetro last week to achieve a 'stand still situation' of the contract, which is a mechanism provided by the Peruvian license contract. The Company is endeavouring to extend the third phase of the exploration contract to the end of 2014.

The commitment for the present phase III consists of 720 UTE's (technical economical units) which is the equivalent of 720 square km² of 3D seismic. Phases IV and V of the contract consists of 740 UTE's and 470 UTE's. It is the Company's choice to select between an equivalent work program based on UTE's or to drill one well in each exploration phase. This flexibility which is part of the attractions of the Peruvian license contract means in fact that a well commitment in Block Z-34 can be delayed and drilled at a time chosen by the Company as long as the minimum amount of UTE's per phase are fulfilled.

There is an increase in exploration activity in the region of Block Z-34. In Block Z-38 (north from Block Z-34) operator Karoon, an Australian company, has recently announced a program to drill two wells with an option of one more by late 2013 early 2014. The Directors believe that Karoon's drilling campaign, if successful, should add value to Block Z-34 as the block is in a similar geological environment as our block. In addition, companies with assets east of Block Z-34 (Savia), north east (BPZ /Pacific Rubiales) and further south (Savia and SK Energy) have announced aggressive exploration and development plans. The Directors believe this exploratory activity and presence of offshore supply service companies may have a positive effect on the offshore development costs in the area.

Block XXI

Gold Oil continues to consider this asset, located onshore at the North West side of Peru and close to oil and gas producing assets (e.g. Savia, Olympic, Interoil), to be prospective.

Vale has a 70 per cent interest. Gold Oil retains 30 per cent and is the designated Operator of the block. Gold Oil is carried for the first $10 mm of exploration work.

Following the airborne survey (8000 line km's of aero gravity), Gold Oil/Vale have now defined the seismic grid and already started the EIA permitting during the fourth quarter of 2012.

The plan is to acquire approximately 400 to 600 line km's of 2D seismic in the most attractive areas as soon as the EIA is approved by the Ministry of Energy and Mines.

Approval

Mr. Camilo Merendoni, Director of the Company, who has been involved in the oil and gas industry for more than 45 years has compiled, read and approved the technical disclosure in this regulatory announcement. Camilo is an engineer by training.

Forward Looking Statements

Statements relating to the estimated or expected future production, operating results, cash flows and costs and financial condition of Gold Oil, planned work at the Company's projects and the expected results of such work are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words such as the following: expects, plans, anticipates, forecasts, believes, intends, estimates, projects, assumes, potential and similar expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur. Information concerning exploration results and reserve and resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.

These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable at the time they are made, are inherently subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; the possibility that results of work will not fulfil projections/expectations and realize the perceived potential of the Company's projects; uncertainties involved in the interpretation of drilling results and other tests and the estimation of reserves and resources; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of environmental issues at the Company's projects; the possibility of cost overruns or unanticipated expenses in work programs; the need to obtain permits and comply with environmental laws and regulations and other government requirements; fluctuations in the price of oil and gas and other risks and uncertainties.

For further information:

Gold Oil Plc

Rudolph Berends (Chairman & CEO)                               Tel: [phone]

Seymour Pierce Ltd (Nomad and Joint Broker):

David Porter / Stewart Dickson (Corporate Finance)  Tel:  [phone]

Richard Redmayne / David Banks (Corporate Broking)

FirstEnergy Capital LLP (Joint Broker):  

Hugh Sanderson / Travis Inlow                                          Tel: + 44 (0) 20 7448 0200

 

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