LEPCO plc
26 October 2000
LEPCO plc ('the Company')
The text below was originally published as part of the
Interim Results released this morning under RNS No. 0870T.
There are no material changes to the text.
DEAL WITH DNO/SUSPENSION OF SHARES
DNO ASA ('DNO') and LEPCO plc ('LEPCO') have signed an
agreement of intent for LEPCO to acquire oil assets in
return for ordinary shares in the Company. DNO is expected
to enter into an agreement, subject to shareholder approval,
prior to the end of the calendar year.
The asset deal involves the transfer of part of DNO's equity
in Blocks 32 and 53 in the Yemen. Both blocks are held
under Production Sharing Contracts. Block 32 contains a
number of oil prospects and an estimated 6-million barrel
development (the Tasour field), which is due onstream later
this year. The block is operated by DNO.
Block 53 lies due east of Block 32 and in June 2000, a
wildcat well made an oil discovery, which flowed at 4,850
barrels/day under test conditions. A further well is being
drilled to appraise this discovery.
The transaction will have an economic effective date of 1
January 2001 and after completion DNO will hold a majority
interest in the share capital of LEPCO. The agreement will
be conditional upon the 'white wash' provisions of the Panel
on Takeover and Mergers.
It is proposed to transact the asset-for-equity deal at
16.5p a share, that being the bid price at close of business
on the Alternative Investment Market of the London Stock
Exchange on Friday 20th October 2000.
The completion of the sale and transfer of interests in the
Yemen are subject to governmental and coventurer approvals
and consents being given in a form acceptable to DNO. In
addition, LEPCO is required to obtain all necessary
regulatory and corporate approvals. An Extraordinary
General Meeting will be held to approve the transaction and
a circular to shareholders will be despatched in due course.
On completion of the transaction, the Board and Management
of LEPCO will be restructured. A majority of the current
Board members will resign and Berge Gerdt Larsen (Chief
Executive of DNO ASA) and a further nominee of DNO will be
appointed. It has also been agreed that upon completion of
these changes Peter Bassett will retire as Chairman of the
Board and Berge Larsen will be appointed as Chairman of the
Board.
In a separate agreement, DNO has agreed to provide LEPCO
with a £250,000 loan facility.
Under this facility, DNO is entitled to require repayment in
either cash or ordinary shares in LEPCO at the then
prevailing market price. In the event of DNO requiring
repayment in cash, LEPCO is entitled to make repayment in
shares to the extent that it is unable to repay in cash.
In view of the loan facility agreed on 24 October 2000 and
the size of the proposed transaction which will result in
DNO having control of more than 50% of the Company's issued
share capital and DNO having a majority of the Board, the
Directors have requested that trading in the Company's
shares is suspended until full details of the transaction
are circulated to shareholders.
For further information contact:
Peter Wilde Managing Director, LEPCO plc 020 7233 5245
Chris Callaway Beeson Gregory 020 7488 4040
26 October 2000
Editor's Notes:
LEPCO plc is an AIM quoted Company whose current principle
asset is a 90% operated WI in a 75 Bcf gas prospect in the
Southern Gas Basin. The Company floated on the AIM market in
1997 and its management has been seeking ways to expand
following the sale of its interest in the UK Forties field
after the oil price collapsed in 1998. LEPCO currently has
9.9 million shares in issue.
DNO ASA is a Norwegian quoted Company with assets in the
North Sea and the Yemen. In the UKCS DNO is the Operator of
the Heather field. In 1996, Berge Gerdt Larsen acquired a
controlling interest and restructured the Company's Board
and management. In the subsequent four years, the Company's
market capitalization has grown from £3m to approximately
£100m.
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