Issuance of Ordinary Shares, Options and Warrants

RNS Number : 1783C

Bahamas Petroleum Company PLC

15 October 2020

 

15 October 2020

Bahamas Petroleum Company plc

("BPC" or the "Company")

Issuance of Ordinary Shares, Options and Warrants

BPC, the Caribbean and Atlantic margin focused oil and gas company, with exploration, production, appraisal and development assets across the region, advises of the issuances of: i) new ordinary shares of 0.002p each in the Company ("Ordinary Shares"), related to previously announced and shareholder approved salary deferrals; ii) new Ordinary Shares and warrants to subscribe for new Ordinary Shares in respect of certain adviser payment arrangements; iii) previously unallocated options over new Ordinary Shares from existing shareholder approved schemes; and iv) potential issue of new Ordinary Shares to executive and management conditional on certain performance criteria related to operations in Trinidad and Tobago being met.

Deferred Pay Shares

On 17 December 2014, the Directors entered into an agreement for the deferral of 20% of their salaries and fees. On 1 April 2016, the Directors entered into a further agreement for the deferral of 50% of their fees and the CEO entered into an agreement for the deferral of 90% of his salary, with half of this deferral accruing into an entitlement to shares and the other half accruing into an entitlement to cash. On 1 January 2018 the Directors (excluding the CEO) entered into a further agreement for the deferral of 90% of their fees, with half of this deferral accruing into an entitlement to shares and the other half accruing into an entitlement to cash.

In all cases, the terms of these deferrals were advised to the market. However, in summary, the deferrals related to fees and salaries being forgone until completion of a farmout or other arrangement sufficient to finance the Company's first exploration well in the Bahamas . Where applicable, the value of fees/salary forgone accrued at the end of each month as an entitlement to new Ordinary Shares in the Company, calculated as the value of fees/salary forgone divided by the volume weighted average closing share price on AIM of the Company's Ordinary Shares each month. Determination of whether the first exploration well had been sufficiently funded was defined as the Company either securing a farm-in or securing capital via debt and/or equity in excess of US$25 million, or any combination thereof. It was also subsequently determined that the Board would consult with the Company's relevant advisers on the adequacy of well funding prior to determining that the criteria had been met. Several members of the Company's executive team and staff had also agreed to a deferral of salary entitlements on a comparable basis.

In August 2019, shareholders were advised that the total number of deferred shares owed by the Company to Directors and certain other executives and staff members under this arrangement amounted to 116,698,188. Further, shareholders approved the issuance of this number of Ordinary Shares as and when the initial exploration well was considered fully funded and following consultation with the Company's relevant advisers. These entitlements included amounts due up to 31 July 2019. The circular that set out these proposals and which was posted to shareholders on 21 August 2019 explained that deferred payment obligations accruing from 1 August 2019 onwards would be payable in cash or shares at the Company's discretion, with all relevant Directors and members of management agreeing that any deferred shares would also be issued when the initial well was determined to be fully funded. The Company has elected to settle its obligations to Directors and management for the period 1 August 2019 to 30 September 2020 in Ordinary Shares amounting to 30,120,577 shares, such that the total aggregate number of accrued deferred pay shares as at 1 October 2020 amounted to 146,818,765 Ordinary Shares (the "Deferred Pay Shares").

Further to the US$12 million equity placing as announced on 1 October 2020 (the "Placing"), the Board, having consulted with the Company's relevant advisers, has determined that the initial exploration well is fully funded per the established criteria. As such, the Company will proceed to issue 146,818,765 Deferred Pay Shares, in aggregate, as follows:

DIRECTORS	Deferred Pay Shares
Bill Schrader	14,155,667
James Smith	9,255,630
Simon Potter	63,567,276
Adrian Collins	10,888,977
Ross McDonald	9,255,630
Leo Koot	289,970
Total Deferred Pay Shares issued to Directors	107,413,150
Management & Former Directors(1)	39,405,615
TOTAL DEFERRED PAY SHARES ISSUED	146,818,765

(1)  Includes accrued shares owing to the Estate of Mr. Shallcross (former Director) who passed away on 15 October 2019.

Given the determination that the initial exploration well is fully funded, all fee and salary deferral arrangements have now ceased, effective 1 October 2020.

Issuance of Shares and Warrants to Advisers

In relation to the Placing, the Company had agreed to the payment of brokerage fees to various placing advisers in the form of cash and warrants.

In relation to cash fees payable, certain of the Company's advisers have agreed to receive Ordinary Shares in the Company in lieu of those cash fees, with such Ordinary Shares to be issued on the same basis as shares were issued to investors in the institutional placing (being at a price of 2 pence per share). Consequently, the Company is issuing 7,733,592 Ordinary Shares (the "Adviser Fee Shares") in part settlement of cash fees otherwise payable in respect of the Placing.

The Company also agreed to issue 20,677,362 warrants in relation to brokerage fees for the Placing. These warrants are valid for two years from the date of grant and with an exercise price of 2 pence per share. If exercised, these warrants would result in gross proceeds being received by the Company of approximately £414,000.

Issuance of Options to Management

The Board's Remuneration Committee has resolved to make the following award of unallocated share options under the Company's existing approved option arrangements:

To the CEO:

-  Award immediately of 6,250,000 Series B Options; and

-  Award of 6,250,000 Series B Options, such award to be made and take effect once the Goudron EPSC in Trinidad has been fully executed and become effective.

To various members of the Company's executive and management:

-  Award immediately of, in aggregate, 6,250,000 Series B Options;

- Award of, in aggregate, 6,250,000 Series B Options, such award to be made and take effect once the Goudron EPSC in Trinidad has been fully executed and become effective; and

-  Award immediately of, in aggregate, 8,300,000 Series C Options.

Consequently, the Series B Option pool has been fully allocated and 8,000,000 options remain available for allocation from the Series C pool.

Conditional Bonus Payments to Management

The Board's Remuneration Committee has resolved to make the following performance related bonus payments to the CEO and a member of the Company's executive and management:

To the CEO:

- US$200,000, such award to be made and take effect only once the Goudron EPSC in Trinidad has been fully executed and becomes effective.

To a member of the Company's executive and management:

-  US$200,000, such award to be made and take effect only once the Goudron EPSC in Trinidad has been fully executed and becomes effective.

The above recipients have agreed that they would be willing to receive such bonus payments in the form of Ordinary Shares, to be issued at such time as the Goudron EPSC performance criteria is met.

Aggregate Information

Directors' Holdings

Following the issue of the Deferred Pay Shares and options to Directors as described above, and inclusive of shares and options already held by Directors, the aggregate position held by the Directors is as follows:

DIRECTORS	TOTAL SHARES	SERIES A OPTIONS(1)	SERIES B OPTIONS(2)	SERIES C OPTIONS(3)
Bill Schrader	17,845,667	1,500,000	750,000	750,000
James Smith	11,475,630	750,000	375,000	375,000
Simon Potter(5)	76,119,214	20,000,000	27,500,000(4)	25,000,000
Adrian Collins	13,528,977	750,000	375,000	375,000
Ross McDonald	11,725,630	750,000	375,000	375,000
Leo Koot	19,514,077	nil	nil	nil

(1)  Series A options are exercisable at 2.22 pence per share

(2)  Series B options are exercisable at 2.4 pence per share

(3)  Series C options are exercisable at 2.8 pence per share at such point in time as the initial exploration well commences (defined as once a rig is mobilised, that being when the contracted drilling rig, following inspection by BPC and any necessary customs authorisations, leaves the port of origination by a distance of 1 nautical mile)

(4)  The award of 6,250,000 of these options remain conditional on the Goudron EPSC in Trinidad being fully executed and becoming effective

(5)  This will increase to reflect the issuance of additional ordinary shares in lieu of agreed bonus at such time as the Goudron EPSC in Trinidad is fully executed and becomes effective

Total Voting Rights

Application will be made for the Deferred Pay Shares and Adviser Fee Shares to be admitted to trading on the AIM market of the  London Stock Exchange ("AIM") and it is expected that admission will take place and trading in the shares will commence from 8.00 a.m. on or around 21 October 2020 ("Admission").

Upon Admission, the Company's issued share capital will consist of 4,049,360,203 Ordinary Shares, with each Ordinary Share carrying the right to one vote. The Company does not hold any Ordinary Shares in treasury. This figure of 4,049,360,203 Ordinary Shares may therefore 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 under the FCA's Disclosure Guidance and Transparency Rules.

Total Options and Warrants on issue

Following the issuances of the options and warrants announced herein, the total options and warrants outstanding in the Company are as follows:

	SERIES A OPTIONS(1)	SERIES B OPTIONS(2)	SERIES C OPTIONS(3)	WARRANTS & OTHER OPTIONS(4)
Directors (6)	3,750,000	1,875,000	1,875,000	Nil
Executive, Management and other	46,250,000	73,125,000(5)	65,125,000	Nil
Advisers and others	nil	nil	nil	73,213,605

(1)  Series A options are exercisable at 2.22 pence per share

(2)  Series B options are exercisable at 2.4 pence per share

(3)  Series C options are exercisable at 2.8 pence per share at such point in time as the initial exploration well commences (defined as once a rig is mobilised, that being when the contracted drilling rig, following inspection by BPC and any necessary customs authorisations, leaves the port of origination by a distance of 1 nautical mile)

(4)  Warrants & Other Options include warrants issued to Company advisers and options issued to finance providers and former executives of Columbus Energy Resources plc

(5)  The award of 12,500,000 of these options remain conditional on the Goudron EPSC in Trinidad being fully executed and becoming effective

(6)  For the purposes of this table those totals pertaining to Simon Potter, CEO, and the Estate of Mr Shallcross (former Director) who passed away on 15 October 2019, are included with the line item Executive, Management and other

If all options and warrants were to become exercisable and then exercised in accordance with their terms, gross proceeds received by the Company would be approximately £6.1 million.

For further information, please contact:

Bahamas Petroleum Company plc Simon Potter, Chief Executive Officer	Tel: [phone]
Strand Hanson Limited - Nomad Rory Murphy / James Spinney / Jack Botros	Tel: [phone]
Shore Capital Stockbrokers Limited - J oint Broker Jerry Keen / Toby Gibbs	Tel: [phone]
Investec Bank Plc - J oint Broker Chris Sim / Rahul Sharma	Tel: [phone]
CAMARCO Billy Clegg / James Crothers / Hugo Liddy	Tel: [phone]

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Notes to editors

BPC is a Caribbean and Atlantic margin focused oil and gas company, with a range of exploration, appraisal, development and production assets and licences, located offshore in the waters of The Bahamas and Uruguay, and onshore in Trinidad and Tobago, and Suriname. BPC is currently on-track for drilling an initial exploration well in The Bahamas, Perseverance #1, in late 2020 / early 2021, with the well targeting recoverable P₅₀ prospective oil resources of 0.77 billion barrels, with an upside of 1.44 billion barrels. In Trinidad and Tobago, BPC has five producing fields, two appraisal / development projects and a prospective exploration portfolio in the South West Peninsula. BPC's exploration licence in Uruguay is highly prospective, with a potential resource of 1 billion barrels of oil equivalent. In Suriname, BPC has an onshore appraisal / development project.

BPC is listed on the AIM market of the London Stock Exchange.    www.bpcplc.com

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