Oversubscribed conditional placing to raise ?6.5m

RNS Number : 0984K

Rose Petroleum PLC

20 June 2014

 



Rose Petroleum plc

("Rose" or the "Company")

Intention to raise £6.5m by way of an oversubscribed conditional placing and subscription

Rose Petroleum plc (AIM Ticker: ROSE) is pleased to announce its intention to raise £6.5m by way of an oversubscribed conditional placing and subscription.

Summary of the Placing

-      The Company proposes to raise £6.5m (before expenses) by way of an oversubscribed conditional placing by Allenby Capital Limited ("Allenby Capital") and Pareto Securities Limited ("Pareto") and a subscription of 433,333,322 new Ordinary Shares of 0.1 pence ("Ordinary Shares") each (the "Placing Shares") at a price of 1.5 pence per share (the "Placing")

-      Placing Shares have been conditionally placed with institutional and other investors and certain Directors

-      Subject to approval by shareholders of the authority to allot shares (the "Resolution") at the forthcoming Annual General Meeting to be held at 9.00 a.m. on 27 June 2014 (the "AGM") and, amongst other things, to admission of the shares to be issued under the placing to trading on AIM ("Admission")

-      The net proceeds of the Placing will be used to develop the Company's Mancos and Paradox assets in Eastern Utah and, in particular,:

o  to permit, shoot, process and interpret 3D seismic (July to December 2014);

o  to drill and complete a horizontal Mancos well (Q3 2014);

o  to test the vertical shut-in Paradox well (Q3 2014);

o  to pursue strategic acquisitions (Q3 2014); and

o  for general working capital purposes.

Matthew Idiens, CEO, commented: "I am delighted that we are able to announce this proposed oversubscribed placing and subscription of £6.5m.  This initial financing will allow us to commence the development of our Mancos and Paradox assets and which we anticipate will lead to initial production from the project during the first half of next year. We are also pleased that a number of oil & gas companies that have expressed an interest in partnering with Rose on a project level. We have a fantastic opportunity in a region with a long history of significant production to dramatically change the future for Rose."

For further information, please contact:

Rose Petroleum Plc                                                                                      [phone]

Matthew Idiens, CEO

Allenby Capital (Nominated Adviser & Joint Broker)                                         [phone] Jeremy Porter / Alex Price

Pareto Securities (Joint Broker)                                                                      [phone]

Guy Wilkes

Lionsgate Communications (Public Relations)                                                 [phone] Jonathan Charles / Lynn Carratt

Placing and subscription of 433,333,322 new Ordinary Shares of 0.1 pence each at 1.5 pence (the "Placing Price") per new Ordinary Share

1. Introduction

The Company proposes to raise £6.5 million (before expenses) through the issue of 433,333,322 new Ordinary Shares at 1.5 pence per share.  The Placing Price represents a discount of approximately 20 per cent. to closing price of 1.875 pence per Ordinary Share on 19 June 2014, being the last dealing day immediately prior to the release of this announcement. The Placing price was determined by a book-building process carried out by Allenby Capital and Pareto and having considered the price at which the Ordinary Shares are currently traded, and other market factors, the directors of Rose (the "Directors") have resolved that the Placing Price is appropriate. The Placing Shares will represent approximately 33.18 per cent. of the Company's share capital as enlarged by the Placing ("Enlarged Share Capital").

Pursuant to the terms of a placing agreement, Allenby Capital and Pareto, as agents for the Company, have agreed to use their reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing Agreement is conditional, inter alia, upon the passing of the Resolutions at the AGM and Admission becoming effective on or before 8.00 a.m. on 30 June 2014. The Placing Agreement contains provisions entitling Allenby Capital and Pareto to terminate the Placing Agreement at any time prior to Admission in certain circumstances. If this right is exercised the Placing will not proceed. The Placing has not been underwritten by either Allenby Capital or Pareto.

The notice of AGM has already been sent to shareholders and this seeks sufficient authority to enable the Placing to proceed.

2. Background to and reasons for the Placing

The Directors believe that there is currently an opportunity to raise funds from a small number of institutional and other investors rather than by offering all shareholders the opportunity to acquire further shares and that this opportunity may not be present in the future given the current uncertain market conditions. The Directors believe that the additional cost and delay incurred in connection with any such offer would not have been in the best interests of the Company.

The net proceeds of the Placing will be used to develop the Company's Mancos and Paradox assets in Eastern Utah and, in particular,:

o  to permit, shoot, process and interpret 3D seismic (July to December 2014);

o  to drill and complete a horizontal Mancos well (Q3 2014);

o  to test the vertical shut-in Paradox well (Q3 2014);

o  to pursue strategic acquisitions (Q3 2014); and

o  for general working capital purposes.

The Directors believe that the Placing will give the Company sufficient working capital to pursue the above proposed programme, which the Directors believe has the potential to significantly increase the value of the Company. However, exploration costs are difficult to predict and if they prove to be higher than anticipated, or in the event of unforeseen circumstances, further capital may be required.

3. Admission and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares on AIM will commence on 30 June 2014.

The Placing Shares will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared following Admission.

4. Directors and consultants participation

As part of the Placing, Matthew Idiens, CEO, has agreed to subscribe for 3,333,333 Placing Shares at the Placing Price.  Following admission, Mr Idiens will be interested in 20,139,213 Ordinary Shares, representing approximately 1.54 per cent. of the Enlarged Share Capital.  In addition, Mr Idiens holds 21,800,000 options to subscribe for Ordinary Shares at 1.125 pence per Ordinary Share.

The Earl of Kilmorey, Chairman, has agreed to subscribe for 1,666,666 Placing Shares at the Placing Price. Following admission, The Earl of Kilmorey will be interested in 3,996,666 Ordinary Shares, representing approximately 0.31 per cent. of the Enlarged Share Capital. In addition, The Earl of Kilmorey holds 8,250,000 options to subscribe for Ordinary Shares at 1.125 pence per Ordinary.

The Glenville Discretionary Trust, has agreed to subscribe for 3,333,333 Placing Shares at the Placing Price. Following admission, The Glenville Discretionary Trust will be interested in 20,833,333 Ordinary Shares, representing approximately 1.60 per cent. of the Enlarged Share Capital.  Philip Jeffcock, a Non-Executive Director of the Company, and others in his family are beneficiaries of The Glenville Discretionary Trust.

As part of the Placing, John Blair, Head of New Ventures, has agreed to subscribe for 2,000,000 Placing Shares at the Placing Price.  Following admission, Mr Blair will be interested in 2,000,000 Ordinary Shares, representing approximately 0.15 per cent. of the Enlarged Share Capital.  In addition, Mr Blair holds 23,700,000 options to subscribe for new Ordinary Shares at 0.4 pence per Ordinary Share.

5. Recommendation

The Directors consider that the Placing is in the best interests of the Company and its shareholders as a whole. Accordingly, the Directors unanimously recommend that shareholders vote in favour of the Resolutions to be proposed at the AGM, as they have intend to do in respect of their aggregate interests of 36,751,880 Ordinary Shares (representing approximately 4.21 per cent. of the Company's current issued Ordinary Shares).

 

END

 

 

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