Proposed acquisition and £10m placing

RNS Number : 7261T

Zephyr Energy PLC

29 March 2021

 

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310. MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS PREVIOUSLY BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND ALL SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

29 March 2021

Zephyr Energy plc

(the "Company" or "Zephyr")

Equity fundraising of £10m to fund the upcoming Paradox lateral well and

to acquire and fund oil producing interests in the Bakken Formation USA,

 and notice of General Meeting

Zephyr Energy plc (AIM: ZPHR), the Rocky Mountain oil and gas company focused on responsible resource development, is pleased to announce a placing and subscription of 500,000,000 new ordinary shares of 0.1 p each in the Company ("Placing Shares"), at a price of 2.0 pence ("p") per Placing Share, to raise £10 million before expenses (the "Placing"). The Placing has been supported by a range of new and existing institutional investors, family offices, Zephyr Board members and other investors, and was conducted by Turner Pope Investments ("TPI") acting as sole broker for the Company.

The proceeds from the Placing will be invested with the objective of transforming the Company into a self-sustaining platform for organic growth with a diverse portfolio of production assets in two established USA oil producing basins.

Of the funds raised in the Placing, £6 million  is conditional, inter alia, on the approval by the Company's Shareholders of resolutions to provide authority to the Directors to issue and allot further ordinary shares of 0.1p each ("Ordinary Shares") on a non-pre-emptive basis, which will be sought at a General Meeting to be held on 16 April 2021, further details of which are set out below.

Summary

· The Placing was carried out at a 2.5% discount to the Company's closing price of 2.05p per share on Friday 26 March 2021.

· The Placing will fully fund the $3.5 million State 16-2 CC LN appraisal well (the "lateral well" or "Paradox lateral") drilling programme targeting the Company's first production from its Paradox project (the "Paradox" or the "Paradox project").

· The Placing also allows the Company to proceed with the proposed acquisition, and to fund associated capital expenditure ("CAPEX"), of highly economic working interests in currently producing and near-term production wells in the Bakken Formation, North Dakota, USA (the "Acquisition" or the "Bakken project"). 

· Production from the Acquisition will provide the Company with immediate oil production and the substantial cashflows expected to be generated from the Bakken project have the potential to fund multiple additional Paradox wells over the next 12 months.  The Company will also be able to utilise its historical tax losses of more than $16 million to offset federal income taxes due on profits from the Acquisition.

Colin Harrington, Chief Executive of Zephyr, said : "Today's developments mark a truly ground-breaking moment for the Company.  Following the completion of this ambitious fundraise, Zephyr is poised to transform itself into a well-capitalised, self-sustaining platform with a financial flexibility that will enable the Company to pursue - on an independent basis - the significant upside potential which exists in our Paradox project. 

The key benefit of our proposed Bakken project acquisition is its potential to generate substantial cashflows which can be reinvested into our Paradox project.  This, combined with the funding secured to drill the Company's first production target in the Paradox later this year, means we have taken a massive step towards unlocking the substantial potential value from the Paradox project on a timeline and in a manner that is now within our control.

The combination of a funded Paradox drilling programme and a cash generating Bakken project will also give us the capacity to fund any future potential exploration opportunities on the additional 11 reservoirs in the Paradox we have identified above and beyond our main target, the Cane Creek reservoir.

The Bakken project acquisition is a perfect addition to our asset portfolio and is the ideal complement to our Paradox project. Since I joined the Company in mid-2019, we have evaluated over 75 potential acquisitions, and I believe the Bakken project to be the single best opportunity we've identified.  We have been able to negotiate the Acquisition on highly favourable economic terms, particularly when taking into account the recent rise in the oil price. The fact that the Bakken project wells have had all drilling risk removed is a major bonus, and the resulting cash flow will enable us to utilise the Company's historical tax losses of more than $16 million.

"The next few months will see a flurry of corporate and operational activity - including the completion of the Acquisition, first Bakken oil production and revenues for the Company, the Bakken well completions, the drilling of the State 16-2 lateral well targeting our first production in the Paradox and the release of additional analysis of the overlying reservoir zone in the Paradox. The team has shown fantastic energy and resilience to get the Company to this position, and we look forward to continuing delivering on these key objectives for our Shareholders.

"I would like to thank TPI and the rest of our adviser team for the successful execution of the Placing, a fantastic effort and outcome, and I would very much like to take this opportunity to welcome our new Shareholders and institutional investors on board.  

" In conclusion, I'd like to note that we are currently operating in particularly exciting and unusual times - times which simultaneously offer strengthening commodity prices as well as reduced drilling and service costs, and times in which opportunistic acquisitions, such as the Bakken project, can be made at highly compelling valuations.  Zephyr's Board has elected to be opportunistic in these exceptional times in order to position the Company for significant long-term growth - and that growth now has the potential to be achieved without the need for future external funding while giving the Company autonomy and flexibility to deliver the value from its existing asset portfolio.

"We will be providing regular updates as we progress through this transformational period and in the meantime, we will continue to operate in line with our core values of being responsible stewards of both our investors' capital and of the environment in which we work."

Details of and reasons for the Acquisition

The proposed Acquisition will provide the Company with low-risk oil production from already drilled wells and is expected to generate substantial cashflows that can be utilised across the Company, including funding for the additional development of the Paradox project.

 The key details of the Acquisition are as follows:

· Acquisition of non-operated working interests in five wells (one producing well and four drilled but uncompleted wells (a "DUC" or "DUCs") in Mountrail County, North Dakota, USA (the " Bakken Interests ")

· The Bakken Interests on the five wells range from 16.8% to 37.2%

· The wells are operated by Whiting Petroleum, an active and highly experienced operator in the Bakken region (the " Operator ")

· The Company is acquiring the Bakken Interests from a privately owned exploration and production company based in the US (the " Seller ") which has not funded any of its historic or future CAPEX obligations on the Bakken Interests

· Zephyr agreed headline terms with the Seller when the oil price was at $45 per barrel of oil (" bo "), subject to further due diligence, funding and final documentation

· The producing well has been on production since March 2020

· The four DUCs are scheduled to be completed in May 2021 and production revenues are targeted to be received by August 2021

· 2P Reserves being acquired are estimated at 449,434 barrels of oil equivalent (" boe ") to Zephyr

· The five wells are spread across three separate drilling pads, creating production diversification

The key benefits of the Acquisition are as follows:

· A low-risk acquisition with substantial near-term cash flow expected

· No remaining drilling risk - all five wells have been drilled successfully to target depth

· Excellent complement to (and funding source for) the higher risk, higher upside Paradox Basin development

· No federal tax payments will be payable in the short-term as profits can be offset against Zephyr's historic tax losses

The economics on the Acquisition as calculated by Zephyr are extremely attractive and establish Zephyr as an immediate oil producer. Once the DUC wells are online, Zephyr forecasts that the Bakken Interests will provide:

· up to $8 million of undiscounted cash flow to Zephyr over the following 12 months to deploy into the Paradox development or into additional projects, and in total, $15 million of undiscounted cash flow, at $60/bo

· 2P Internal Rate of Return (" IRR "): 47% at $60/bo

· 2P net present value at a 10% discount rate (NPV-10): $4.3 million

· A cash flow breakeven oil price of $36.69/bo

· H2 2021: approximately 720 boepd average production anticipated

· a one-year payback

Terms of the Acquisition

Zephyr has a conditional agreement with the Seller providing exclusivity for Zephyr to acquire the Bakken Interests by 31 March 2021 (the " Agreement ").  Zephyr has already paid the Seller a non-refundable deposit of $50,000. Pursuant to the Agreement, to acquire the Bakken Interests Zephyr is required to make cash payments by 31 March 2021 (for which proceeds from the Placing will be used) totalling approximately $4 million, primarily representing the outstanding historical CAPEX due to the Operator, with the balance of less than 8 per cent. being payable to the Seller and which equates to less than $1.00 per proved boe acquired. 

Upon completion of the Acquisition, the Company will be responsible for payment of future CAPEX obligations on the Bakken Interests to complete the DUCs, which will be paid directly to the Operator and is estimated to be approximately $4.2 million, and which will become due after the wells are completed (currently scheduled for May 2021).  Therefore, total historical and future CAPEX on the Bakken Interests payable by Zephyr is estimated to be approximately $7.9 million and equates to $17.35/boe acquired, with first revenue from the DUC wells expected by August 2021.

Status of the Acquisition process

· Zephyr has exclusivity to acquire the Bakken Interests until 31 March 2021

· Financial, technical and commercial due diligence completed

· Land and lease checks completed

· Financial modelling completed

· Technical evaluation and asset review completed

· Assignments and closing documentation drafted

The Acquisition is expected to complete on 31 March 2021 and remains conditional on, inter alia, final contract, Zepyhr paying approximately $4 million by 31 March 2021, release of Operator liens and transfer of title.

Paradox project update and next steps

On 15 March 2021, the Company announced a comprehensive update on the Paradox project, which included confirmation of evidence of oil saturation across entirety of the continuous core acquired from the Company's Cane Creek reservoir target.  The Company also announced it had elected to proceed with the near-term drilling of the Paradox lateral. The lateral will target the Cane Creek reservoir and will utilise the pre-existing roads, pad and wellbore from the State 16-2 well as a low-cost, low environmental impact sidetrack host.

It is estimated that the cost of the Paradox lateral well will be approximately $3.5 million and funds from the second tranche of the Placing (as detailed below) will be allocated towards drilling this sidetrack well. It is currently expected that the Paradox lateral will be drilled in July of this year.

The Company continues to refine the cost and economic benefits of the lateral.  The Paradox lateral is forecast by the Company's Board to have strong economics based on its 2C estimate, which includes:

· A single-well net present value of approximately $8.2 million at $60.00 per barrel of oil and at a ten per cent. discount rate (NPV-10)

· A cash flow breakeven oil price of $20.55 per barrel of oil

· A single-well estimated ultimate recovery of 694,000 barrels of oil equivalent

The Board's decision to proceed with the Paradox lateral was made following the initial analysis of the significant reservoir data that was obtained from the drilling operations on the State 16-2 well that were completed in January 2021. This data included 113 feet of continuous core obtained from the Cane Creek reservoir.

The highlights from that analysis were as follows:

· Initial analysis of the Cane Creek continuous core data provided further evidence of hydrocarbon saturation across the Cane Creek reservoir.

· The structure to be drilled has comparable geometry and form to other productive structures found within the neighbouring Cane Creek Field, and is characterised by multiple seismic indicators along its length that may represent natural fracture networks within the Cane Creek reservoir.

· When integrated with the recently acquired log data, existing 3D seismic data, and geologic and regional analogue analysis, the Board believes there is a strong justification to proceed to test the Cane Creek reservoir zone with a target to deliver initial oil production.

The use of the State 16-2 well's top hole enables a substantial well cost reduction and drilling risk mitigation.

The Board's target is to deliver first oil production - and benefit from the improved commodity price environment - in a rapid and responsible manner .  Permitting and detailed drill planning efforts for the lateral are underway, and the Company has targeted a spud date of July 2021, subject to final permit approval.

On a project-wide 2C basis, the Cane Creek reservoir on the Company's acreage (which includes the State 16-2LN CC) is a reservoir of substantial scale and is estimated by Zephyr to hold:

· Net recoverable resources of over 12mmboe; and

· A net present value of approximately $156 million using a flat oil price of $60 per barrel of oil and a ten per cent. discount rate.

The above estimates only include forecast resources in the Cane Creek reservoir and do not include the significant potential upside from additional overlying reservoirs which are being evaluated following the drilling of the State 16-2 well.  The estimates for the Cane Creek reservoir were calculated by Zephyr in accordance with the Company's Competent Persons Report prepared by Gaffney Cline & Associates in June 2018, and will be revised further once all data from the State 16-2 well has been processed.

In addition, the analysis and interpretation work on the multiple shallower reservoir targets continues to progress. Initial results have provided encouraging evidence for the presence of multiple stacked continuous oil and gas plays, and significant additional data remains to be processed and analysed over the coming months. 

Use of Placing Proceeds

Proceeds from the Placing will fully fund the upcoming State 16-2 LN CC drilling programme on the Company's project in the Paradox Basin, details of which were announced on 15 March 2021 and summarised above.

The Placing will also fully fund the acquisition of, and CAPEX related to, an attractive portfolio of non-operated production and near-term production assets in the Bakken Formation, a prolific Rocky Mountain oil and gas basin located in North Dakota to the north-east of Zephyr's existing Paradox Basin holdings. 

In particular, the Placing proceeds will be used as follows:

· Approximately $3.5 million to drill the Paradox lateral, which will target the Company's first oil production on its Paradox project, details of which were announced on 15 March 2021.

· Approximately $1.7 million to support and accelerate the development build-out of the Paradox project.

· Approximately $4 million to acquire and fund unpaid historical drilling CAPEX related to a portfolio of attractive, non-operated working interests in five drilled wells in the Bakken Formation, North Dakota, USA, as detailed above. 

· Approximately $4.2 million of additional completion CAPEX investment on the Bakken Interests when the four DUC wells are completed and tied in for production (currently scheduled for May 2021).  First cashflows from the DUC wells are expected to be received by Zephyr by August 2021. 

Of the funds raised in the Placing, £6 million  is conditional, inter alia, on the approval by the Company's shareholders of resolutions at a General Meeting to be held on 16 April 2021, further details of which are set out below.

Details of the Placing

In total, 500,000,000 Placing Shares are proposed to be issued pursuant to the Placing, at a price of 2.0p per Placing Share (the "Placing Price") to raise gross proceeds of £10 million. The Placing Shares (save for director subscriptions as detailed below) have been conditionally placed by Turner Pope Investments (TPI) Limited ("TPI"), as agent and broker of the Company, with certain new and existing institutional and other investors pursuant to a Placing Agreement, as detailed below.

The Company currently has limited shareholder authority to issue Ordinary Shares for cash on a non-pre-emptive basis.  Accordingly, the Placing is being conducted in two tranches as set out below: 

1. First tranche

A total of £4 million, representing the issue of 200,000,000 Placing Shares at the Placing Price (the "First Placing Shares"), has been raised within the Company's existing share allotment authorities  which was granted at the Company's general meeting held on 2 November 2020  (the "First Placing"). Application will be made for the First Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 30 March 2021 ("First Admission"). The issue of the First Placing Shares is conditional, inter alia, on First Admission becoming effective and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission. 

The First Placing is not conditional on the Second Placing (as defined below) completing (but the Second Placing is conditional on the First Placing completing).  Accordingly, should the First Placing proceed but not the Second Placing, due to resolutions at the GM (as defined below) not being passed or for another reason, the Company will only receive gross proceeds of £4 million from the Placing, which will enable the Acquisition to proceed but will not provide sufficient funds for the Company's other objectives such as to drill the Paradox lateral, and therefore the Company will pursue alternative funding options to achieve this objective. Further, whilst the Acquisition is expected to complete on 31 March 2021, it remains subject to final conditions such as release of Operator liens on the Bakken Interests and transfer of title.

2. Second tranche

The balance of the Placing, being £6 million and representing the issue of 300,000,000 Placing Shares at the Placing Price (the "Second Placing"), is conditional upon, inter alia, the passing of resolutions to be put to shareholders of the Company at a general meeting of the Company to be held on 16 April 2021 (the "GM") to provide authority to the Directors to issue and allot further Ordinary Shares on a non-pre-emptive basis, whereby such authority will be utilised by the Directors to enable completion of the Second Placing. A circular containing a notice of the GM will be posted to shareholders shortly.

Application will be made for the Second Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 19 April 2021, conditional on the passing of the resolutions at the GM ("Second Admission").

In addition to the passing of the resolutions at the GM, the Second Placing is conditional, inter alia, on First Admission and Second Admission becoming effective and the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to Second Admission. The First Placing is not conditional on the Second Placing completing.

The Placing as a whole would, if the necessary resolutions are approved at the GM, result in the issue of 500,000,000 Placing Shares, representing, in aggregate, approximately 41 per cent. of the Company's issued ordinary share capital as enlarged by the Placing. 

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

Director subscriptions and shareholdings

Origin Creek Energy LLC ("OCE") has subscribed for 2,500,000 Placing Shares in the Second Placing, equivalent to £50,000 at the Placing Price. Rick Grant, the Chairman of Zephyr, and Colin Harrington, the CEO of Zephyr, are both shareholders and directors of OCE, and Colin Harrington is indirectly the controlling shareholder of OCE. Upon First Admission, OCE's interest in Ordinary Shares will remain unchanged at 134,636,364 Ordinary Shares but will represent 14.64% of the then issued share capital. Upon Second Admission, OCE will have an interest in 137,136,364 Ordinary Shares, equivalent to 11.22% of the Company's then issued share capital.  

In addition to OCE, Colin Harrington has also subscribed for 750,000 Ordinary Shares in the Second Placing. Mr Harrington's total interest in Ordinary Shares will remain unchanged on First Admission at 135,340,300 (which includes OCE's shareholding) but will represent 14.72 per cent. of the then issued share capital. His total interest in the Company on Second Admission will be 138,590,300 Ordinary Shares and will represent 11.34% of the then issued share capital.

In addition, Rick Grant (Chairman of Zephyr), Chris Eadie (CFO of Zephyr) and Gordon Stein (Non-Executive Director of Zephyr) have also each subscribed for Placing Shares in the Second Placing as follows:

	No. of Placing Shares subscribed	Total shareholding on Second Admission	Percentage held on Second Admission
Rick Grant*	1,500,000	1,500,000	0.12
Chris Eadie	1,500,000	6,775,095	0.55
Gordon Stein	500,000	2,350,000	0.19

 *In addition, Rick Grant has a minority shareholding in OCE which holds Ordinary Shares, as noted above.

Placing Agreement

Under the terms of a Placing Agreement between the Company and TPI, TPI will receive commission from the Company conditional on First Admission and Second Admission and the Company will give customary warranties and undertakings to TPI in relation, inter alia, to its business and the performance of its duties.  In addition, the Company has agreed to indemnify TPI in relation to certain liabilities that they may incur in undertaking the Placing. TPI has the right to terminate the Placing Agreement in certain circumstances prior to First Admission and Second Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. The Placing is not being underwritten.

Warrants

The Company is proposing to issue TPI with 32,350,000 warrants to subscribe for 32,350,000 new Ordinary Shares ("Broker Warrants") as part of TPI's fees for undertaking the Placing. The Broker Warrants will be exercisable at a price of  3 p per Ordinary share, a  50 per cent. premium to the Placing price, for a period of three years from issue.

The issue of the Broker Warrants is conditional on the passing of the resolutions to be put to shareholders of the Company at the GM to provide authority to the Directors to issue and allot further Ordinary Shares on a non-pre-emptive basis.  The Broker Warrants will not be admitted to trading on AIM or any other stock exchange.

Further issue of equity

The Company announces the proposed issue and allotment of 2,428,885 Ordinary Shares in lieu of professional fees incurred by and due to a professional service-provider engaged by the Company for services performed in 2020 ("Fee Shares"). The issue of the Fee Shares is conditional on the passing of applicable resolutions at the GM.

Application will be made for the Fee Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on Second Admission.

The Fee Shares will rank pari passu in all respects with the existing Ordinary Shares of the Company in issue and therefore will rank equally for all dividends or other distributions declared, made or paid after the issue of the Fee Shares. 

Total voting rights

Following First Admission, the Company's total issued share capital will consist of 919,339,287 Ordinary Shares, with one voting right per share. The Company does not hold any shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company will be 919,339,287 from First Admission. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company pursuant to the FCA's Disclosure Guidance and Transparency Rules.

Following Second Admission, the Company's total issued share capital will consist of 1,221,768,172 Ordinary Shares, with one voting right per share. The Company does not hold any shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company will be 1,221,768,172 from Second Admission. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company pursuant to the FCA's Disclosure Guidance and Transparency Rules.

Notice of General Meeting

The Company will publish a Circular to convene the GM to propose resolutions to enable completion of the Placing.

The GM will be held at 10.00 a.m. on 16 April 2021.  The circular containing the notice of general meeting will be published and sent to Shareholders tomorrow and will then be available thereafter on the Company's website, www.zephyrplc.com. Shareholders will not be able to attend the meeting due to current COVID-19 restrictions and are strongly urged to vote by proxy in accordance with the instructions set out in the notice of general meeting.

Contacts:

Zephyr Energy plc Colin Harrington (CEO) Chris Eadie (CFO)	Tel: [phone]
Allenby Capital Limited  - AIM Nominated Adviser Jeremy Porter / Liz Kirchner	Tel: [phone]
Turner Pope Investments  - Broker Andy Thacker / Zoe Alexander Flagstaff Strategic and Investor Communications Tim Thompson / Mark Edwards / Fergus Mellon	Tel: [phone] Tel: [phone]

Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD, Technical Adviser to the Board of Zephyr Energy plc, who meets the criteria of a qualified person under the AIM Note for Mining and Oil & Gas Companies - June 2009, has reviewed and approved the technical information contained within this announcement.

Glossary of Terms

1C: Low estimate of Contingent Resources

2C: Best estimate of Contingent Resources

3C: High estimate of Contingent Resources

1P: proven reserves (both proved developed reserves + proved undeveloped reserves)

2P: 1P (proven reserves) + probable reserves, hence "proved and probable"

3P: the sum of 2P (proven reserves + probable reserves) + possible reserves, all 3Ps "proven and probable and possible"

Contingent Resources:

Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies.

Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status.

Reserves: Reserves are defined as those quantities of petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward

mmboe: million barrels of oil equivalent

Notice to Distributors

Solely for the purposes of the temporary product intervention rules made under sections S137D and 138M of the FSMA and the FCA Product Intervention and Product Governance Sourcebook (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, as defined under the FCA Conduct of Business Sourcebook COBS 3 Client categorisation, and are eligible for distribution through all distribution channels as are permitted by the FCA Product Intervention and Product Governance Sourcebook (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing offer no guaranteed income and no capital protection; and an investment in the Placing is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital Limited will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA Conduct of Business Sourcebook COBS 9A and 10A respectively; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

 

END

 

 

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