Acquisition

Zareba PLC 23 March 2006 For publication in the United Kingdom only. Not for release, publication or distribution in or into any other jurisdiction including the United States, Canada, Australia, South Africa or Japan. Zareba plc ('Zareba' or the 'Company') Acquisition of Quadrise International Limited Zareba plc is pleased to announce that, yesterday, it conditionally agreed to acquire the whole of the issued share capital of Quadrise International Limited ('Quadrise') from Masefield Energy Holdings AG ('Masefield Energy')and others, subject to Shareholder approval. The consideration under the Acquisition values Quadrise at £45 million and will be satisfied by the allotment of the Consideration Shares, as detailed below. In addition to the Acquisition, the Company proposes the following: • a waiver of Rule 9 of the City Code; • a Placing and re-admission to trading on AIM; • the change of name to Quadrise Fuels International plc; and • the Consolidation of Shares (together, the 'Proposals'). A document setting out details of the Proposals (the 'Admission Document') is being posted to Shareholders today The Admission Document is also available on the Company's website www.zarebaplc.com and from the offices of Smith & Williamson Corporate Finance Limited, 25 Moorgate, London EC2R 6AY. As a result of the publication of the Admission Document, the suspension in trading on AIM of the Company's shares has been lifted. Extracts from the Admission Document are set out in Appendix I to this announcement. As the transaction is a reverse takeover of the Company under the AIM Rules, the Acquisition requires approval of Shareholders at an Extraordinary General Meeting, notice of which has been sent to Shareholders with the Admission Document. Commenting on the transaction, Brian Moritz, Executive Chairman, stated, 'We are delighted to be so close to the completion of the acquisition of Quadrise, and to be able to recommend it to Shareholders for approval. We believe that the business of Quadrise has a bright future and that it will provide the value for our Shareholders which we have been seeking since Zareba's inception. We look forward to the future development of the Enlarged Group.' Ian Williams, proposed Executive Chairman, commented, 'We believe that the Quadrise MSAR(R) fuels business has substantial international potential. The transaction with Zareba represents a major milestone in the development of the Quadrise business. We are pleased with the level of support received from investors and the Proposed Directors will aim to grow the business to deliver value for all Shareholders.' This summary should be read in conjunction with the information in Appendix I and in the Admission Document. Enquiries: John Woolgar 07813 818 241 (m) Zareba plc 01483 890 004 (o) Azhic Basirov 020 7131 4000 Smith & Williamson Corporate Finance Limited Victoria Thomas 020 7493 3713 Parkgreen Communications 23 March 2006 Disclaimer The Existing Directors and the Proposed Directors, whose names, business addresses and functions appear on page 4 of the Admission Document, accept responsibility for all the information contained in this announcement (other than the information for which the Quadrise Directors and James Daley accept responsibility as detailed below) including collective and individual responsibility for compliance with the AIM Rules. To the best of the knowledge and belief of the Proposed Directors and the Existing Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. The Quadrise Directors together with James Daley, a director and a major shareholder of Masefield Energy, accept responsibility for the information relating to Masefield Energy, the information contained in paragraph 5 (e) of Part VIII of the Admission Document and the information contained in paragraph 9 of Part VIII of the Admission Document (except for the information in paragraph 9 which also appears elsewhere in the Admission Document). James Daley alone accepts responsibility for the financial information on Masefield AG contained in Part II of the Admission Document and the section entitled 'Information on Quadrise' in Appendix I of this announcement. To the best of the knowledge and belief of the Quadrise Directors and James Daley (who have taken all reasonable care to ensure that such is the case) the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. Smith & Williamson Corporate Finance Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is the Company's nominated adviser and, following Admission, will be joint broker for the purposes of the AIM Rules. Its responsibilities as the Company's nominated adviser under the AIM Rules will be owed solely to the London Stock Exchange and will not be owed to the Company or to any Existing Director or Proposed Director or to any other person in respect of his reliance on any part of this announcement. No representation or warranty, express or implied, is made by Smith & Williamson as to any of the contents of this announcement for which the Company, the Existing Directors and the Proposed Directors are solely responsible and without limiting the statutory rights of any person to whom this announcement is sent, no liability is accepted by Smith & Williamson for the accuracy of any information or opinions contained in this document or for any omission of any material information for which it is not responsible. Smith & Williamson is acting for the Company and no one else and will not be responsible to any other person for providing the protections afforded to customers of Smith & Williamson nor for providing advice in relation to the contents of this document or any matter referred to herein. Hichens Harrison & Co. plc, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is the Company's broker and, following Admission, joint broker for the purposes of the AIM Rules. Hichens is acting for the Company and no one else and will not be responsible to any other person for providing the protections afforded to customers of Hichens nor for providing advice in relation to the contents of this announcement or any matter referred to herein. No liability whatsoever is accepted by Hichens for the accuracy of any information or opinions contained in this announcement or for the omission of any material information, for which it is not responsible. This announcement does not constitute an offer of, or the solicitation of any offer to buy, any of the ordinary shares which are proposed to be offered to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful. The distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdiction. The ordinary shares which are proposed to be offered have not been, nor will they be, registered under the United States Securities Act of 1933 (as amended) (the 'Securities Act') and may not be offered or sold, directly or indirectly, in or into the United States absent registration or an exemption from registration. There will be no public offer of securities in the United States or any other jurisdiction. This announcement does not constitute or form part of an offer, or any solicitation of an offer, for securities and any purchase or application for shares in the placing may only be made on the basis of information contained in the formal AIM admission document issued by the Company in connection with the Proposals. APPENDIX I Extracts from the Admission Document PLACING AND ACQUISITION STATISTICS Pre-Consolidation Post-Consolidation Number of Shares in issue before the 203,300,000 20,330,000 Acquisition and Placing Number of Consideration Shares to be issued 3,758,271,417 375,827,136 pursuant to the Acquisition Number of Initial Placing Shares and Placing 647,697,213 64,769,972 Shares to be issued Consideration Shares as a percentage of 81.50% 81.50% Enlarged Share Capital Initial Placing Shares and Placing Shares as a 14.05% 14.05% percentage of Enlarged Share Capital Number of Shares or, following Consolidation, 4,611,268,630 461,126,863 number of New Shares (before adjusting for fractions) in issue on Admission Market capitalisation of the Company at the £92.2 million Placing Price on Admission AIM Symbol QFI ISIN number GB00B0661N17 ISIN number following Consolidation GB00B11DDB67 EXPECTED TIMETABLE OF PRINCIPAL EVENTS Date of publication of Admission Document 23 March 2006 Trading resumes in Existing Shares 23 March 2006 Last time and date for receipt of Forms of Proxy for the 3.00 p.m. on Extraordinary General Meeting 16 April 2006 Extraordinary General Meeting 3.00 p.m. on 18 April 2006 Completion of the Acquisition 8.00 a.m. on 19 April 2006 Admission effective and dealings in Enlarged Share Capital 19 April 2006 commence Despatch of definitive share certificates (where applicable) 3 May 2006 for Consideration Shares, Initial Placing Shares and Placing Shares, and New Shares to Existing Shareholders LETTER FROM THE CHAIRMAN OF ZAREBA ZAREBA PLC (Incorporated in England & Wales under the Companies Act 1985 with Registered No. 5267512) Directors: Registered Office: Brian Moritz (Executive Chairman) Third Floor John Woolgar (Executive) 55 Gower Street James Burgess (Executive) London WC1E 6HQ 23 March 2006 To holders of Existing Shares Dear Shareholder Proposed acquisition of Quadrise International Limited Proposed waiver of Rule 9 of the City Code Proposed Placing and Re-admission to trading on AIM Proposed change of name to Quadrise Fuels International plc Consolidation of Shares Introduction On 9 December 2005, Zareba announced that it had entered into a Preliminary Merger Agreement with Masefield Energy to acquire all of the issued share capital of Quadrise. The Preliminary Merger Agreement provided that any acquisition by the Company of Quadrise would be conditional, inter alia, on satisfactory due diligence being undertaken on Quadrise and that the consideration for the Acquisition would be satisfied entirely by the issue of new ordinary shares in the Company to the shareholders of Quadrise, with completion of the Acquisition being conditional on Admission of the Company's Enlarged Share Capital to trading on AIM. As the Acquisition will constitute a reverse takeover under the AIM Rules, trading in the Shares was suspended pending publication of an AIM admission document in respect of the proposed Enlarged Group and is expected to resume today. Having completed its due diligence, the Company announced today that it has entered into a formal agreement to acquire the whole of the issued share capital of Quadrise. The consideration under the Acquisition values Quadrise at £45 million and will be satisfied by the allotment of the Consideration Shares. The Company is proposing to raise £12.9 million (before expenses) through the Placing. Of the net proceeds of the Placing, approximately £4.6 million will fund the remainder of the cost of the acquisition of Quadrise Limited by Quadrise, while the balance will provide working capital to support the growth and development of the Enlarged Group. It was agreed in the Preliminary Merger Agreement that the Company would, as a pre-condition of the Acquisition, ensure that it had net cash of £1.5 million available at the time when the Acquisition completed. As announced on 9 December 2005, the Company obtained a commitment from James Burgess, one of the Existing Directors, to underwrite the subscription of Shares at 1.75p per Share up to a maximum amount of £250,000 to ensure that the Company could meet this requirement. This subscription is now being made by way of the Initial Placing in which the Initial Placing Shares are to be placed with James Burgess and one sub-underwriter introduced by him, to raise the £250,000. The Initial Placing is conditional upon Admission. The Consideration Shares and the aggregate of the Initial Placing Shares and the Placing Shares will represent approximately 81.5 per cent. and 14.05 per cent. of the Enlarged Share Capital, respectively. As the transaction is a reverse takeover of the Company under the AIM Rules, the Acquisition requires approval of Existing Shareholders at the Extraordinary General Meeting and it is also conditional on the passing of certain other resolutions. Notice of the Extraordinary General Meeting which sets out the resolutions can be found on pages 142 and 143 of the Admission Document. Following the passing of the Resolutions at the EGM and completion of the Acquisition, the Concert Party will have an aggregate holding of 3,665,341,012 Shares or, on Consolidation, 366,534,097 New Shares, representing 79.49 per cent. of the Enlarged Share Capital. As the Concert Party will be interested in more than 30 per cent. of the Enlarged Share Capital, in normal circumstances a general offer to Existing Shareholders would be required under Rule 9 of the City Code to acquire all the Shares or New Shares not held by the Concert Party. However, the Panel has agreed to waive the requirement for such a general offer to be made subject to the approval of the holders of Existing Shares being obtained. Accordingly, Existing Shareholders' consent will be sought at the EGM to approve the reverse takeover and the waiver of the requirement for a general offer to be made (as described further below). If Resolutions 1 to 5 are duly passed at the EGM, the Company's existing quotation on AIM will be cancelled and the Company will apply immediately for the Enlarged Share Capital to be admitted to trading on AIM. The purpose of the Admission Document is to provide you with information on the Proposals and to explain why the Board considers the Proposals to be in the best interests of the Company and the Existing Shareholders as a whole and why they recommend that Existing Shareholders vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting. Background to and reasons for the Acquisition The Company has been considering a number of investments in order to meet the criteria of the London Stock Exchange for investing companies to make an acquisition or acquisitions which constitute a reverse takeover. The Company subsequently entered into discussions with Masefield Energy, with a view to acquiring Quadrise in a reverse transaction. The Directors believe that the acquisition of Quadrise should substantially enhance shareholder value and will be in the interests of both companies and their shareholders. Through the Acquisition the Company will obtain: • certain rights to promote and develop projects for the commercial application of the Akzo Nobel proprietary MSAR(R) oil process technology secured by Quadrise under the Alliance Agreement; • a 20.6 per cent. equity interest in Quadrise Canada which, subject to meeting certain performance targets, has the exclusive rights to use the MSAR(R) technology for hot water, steam and power production in Canada. Quadrise has, in addition, the right to a royalty of 1.67 per cent. (directly) and 5 per cent. (indirectly through its holding in Quadrise Limited) of the net pre-tax profit of Quadrise Canada; • a potential 49.7 per cent. interest in Quadrise US, a business in formation, which, pursuant to a memorandum of understanding between Quadrise America Inc. (a wholly owned subsidiary of Quadrise Canada), RJL Holdings LP and Quadrise, is intended to have certain rights to the manufacture and marketing of MSAR(R) fuels for the thermal power generation market in the United States and Mexico. Quadrise Canada (through Quadrise America Inc.) has a potential 29.7 per cent. interest in Quadrise US, hence the combined effective interest in Quadrise US is expected to be 55.9 per cent. before any dilution associated with local financing; • a 100 per cent. interest in Quadrise Limited which is the registered owner of the MSAR(R) trademark and a patent relating to the combustion of oil in water emulsion fuels in turbines, and which also has a 14.3 per cent. interest in and rights to a royalty of 5 per cent. of the net pre tax profit of Quadrise Canada; • a 100 per cent. interest in Quadrise Power Systems AG, a Swiss registered company, which it is intended will be responsible for the development of the MSAR(R) fuels business in major markets outside North America through business associations with joint venture partners or direct contracts with fuel user clients, as appropriate; • Quadrise's management team and contracted consultants which gives the Company access to an in-house team of commercial and technical experts who are experienced in the oil and energy business. The proposed executive directors are Ian Williams, Bill Howe, Tony Kallis and Hemant Thanawala, who have extensive experience in the energy and oil industries. The contracted specialist consultants are experts in the energy, oil and power generation sectors and in the specialised field of emulsion fuels processing, marketing and combustion; and • access to opportunities through the established relationships in the energy and oil industries and markets world wide of Masefield Energy, as well as availability of specialist services from group affiliates, on arms' length market terms, covering oil procurement and operations, price and freight risk management, transaction financing and other trading related activities. Information on Quadrise As outlined above, Quadrise, a subsidiary of Masefield Energy, holds a portfolio of managed, affiliate and associate interests all of which are engaged in developing business activities associated with the manufacture and marketing of Quadrise MSAR(R) fuels. The MSAR(R) fuels manufacturing process uses proprietary Akzo Nobel oil emulsification technology for which Quadrise has certain rights to promote and market pursuant to the Alliance Agreement. MSAR(R) is a liquid fuel consisting of very fine oil particles dispersed in a water carrier effectively producing a pre-atomised fuel. This enhances concepts previously used in emulsified fuels, enabling superior carbon burnout, improving thermal efficiency and reducing emissions. Further information on Quadrise and MSAR(R) fuel is set out in Part II of the Admission Document. Information on Zareba The Company was first admitted to AIM on 14 February 2005 with the stated intention to make investments in the mining and minerals sector. Its first investment was announced on 8 June 2005, and was in a company developing a diamond mine in northern Namibia. Initial investments of N$1,000,000 (approximately £85,000) were made with an agreement to subscribe up to a further N$1,000,000 on similar terms, as required. Following receipt of a disappointing competent person's report the Company has agreed to write off its initial investments and has been released from any obligation to invest further. In preparation for the Acquisition, the Company has also written off a small investment in a copper mining venture in Cuba and has transferred to Brian Moritz and James Burgess, at cost, an investment made by the Company in a chromite mining venture in South Africa. This leaves the Company with no investments other than cash and no commitments to invest other than in connection with the Proposals. Intentions regarding the Company Following completion of the Proposals, the Proposed Directors intend that the strategic focus of the Company will be to develop projects for the production and sale of Quadrise MSAR(R) fuels to power station operators and others through the establishment of viable manufacturing locations and supply chains for major markets. The intention is that future revenue for the Company will be underpinned through the negotiation of long term supply contracts and joint ventures with key power utilities and steam generating industries and that the business will be supported by the creation by the Group of a recognised specialist central resource base. Save for the Existing Directors, Zareba does not have any employees. Details of the proposals regarding the Existing Directors, following the Acquisition, are provided in paragraph 6(b) of Part VIII of the Admission Document. The Acquisition Under the terms of the Acquisition, Zareba is to acquire all the issued Quadrise Shares for £45,000,000 to be satisfied by the allotment and issue of the Consideration Shares at an issue price of approximately 1.2p per Share (12p per New Share on Consolidation). The Acquisition is conditional, inter alia, on: (i) the passing of Resolutions 1, 2, 3, 4 and 5 at the EGM; (ii) the Placing having become unconditional in all respects save as regards completion of the Acquisition and Admission; and (iii) Admission becoming effective. The Acquisition will not complete if these conditions have not been satisfied by 30 April 2006 or such later date as Zareba and Masefield Energy may decide. The Quadrise Shares will be acquired free from all liens, charges, equitable interests, encumbrances and third party rights and together with all rights now or hereafter attaching thereto, including the right to all dividends and other distributions, if any, hereafter declared, made or paid. Inducement Fee Arrangements Under the terms of the Preliminary Merger Agreement, the Company agreed to pay Masefield Energy a fee to meet part of the costs of Masefield Energy's advisers in the event that the Acquisition does not complete, as an inducement to Masefield Energy to undertake the transaction. The fee amounts to £24,800 (inclusive of Value Added Tax if any), being the equivalent of one per cent. of the market value of the Company prior to the announcement of the Proposals. The fee was agreed to be payable to Masefield Energy if the Proposals did not proceed as a result of: (1) the Company having made a material misrepresentation concerning itself or its business affairs; or (2) the due diligence carried out by Masefield Energy disclosing a material adverse matter which was not remedied (if capable of remedy) to the reasonable satisfaction of Masefield Energy. The Acquisition Agreement provides that Zareba will pay this fee in the event that Masefield is entitled to rescind the Acquisition Agreement. Similar provisions under which Masefield Energy may become liable to contribute up to £75,000 to Zareba's costs were contained in the Preliminary Merger Agreement and the Acquisition Agreement. The Initial Placing and the Placing The Company proposes to raise £11.9 million (net of expenses) through the Initial Placing and the Placing. Pursuant to the Placing Agreement, Hichens has agreed to act as the Company's agent in relation to the Placing. However, Hichens will not be underwriting the issue of the Placing Shares. Pursuant to the Initial Placing, James Burgess and a sub-underwriter introduced by him have agreed to subscribe £250,000. Further details of the Initial Placing are set out in paragraph 14(a) of Part VIII of the Admission Document. The Placing is conditional upon the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms by Hichens. The Placing Agreement is conditional, inter alia, upon the passing of Resolutions 1 to 5 at the EGM, the completion (subject only to Admission) of the Acquisition and the Admission of the Placing Shares no later than 27 April 2006 (or such later date, being not later than 30 April 2006, as the Company, Hichens and Smith & Williamson may, prior to such date, agree). Further particulars of the Placing Agreement are set out in paragraph 11.1(d) of Part VIII of the Admission Document. Your attention is drawn to Part III of the Admission Document headed 'Risk Factors', where information on risk factors associated with making an investment in the Company is set out. Use of Funds An amount of approximately £4.6 million of the net proceeds of the Placing will be used to fund the cash consideration for the acquisition of Quadrise Limited by Quadrise. The balance of the net proceeds of the Placing will provide funding for working capital to support the growth and development of the Enlarged Group. Details of the Consideration Shares, Initial Placing Shares and Placing Shares The Consideration Shares will be issued credited as fully paid and will, in aggregate, represent approximately 81.50 per cent. of the Enlarged Share Capital. The Initial Placing Shares and Placing Shares will be issued credited as fully paid and, in aggregate, will represent approximately 14.05 per cent. of the Enlarged Share Capital. Following the Consolidation, the Consideration Shares, Initial Placing Shares and Placing Shares will rank pari passu with the Existing Shares in all respects, including the right to receive all dividends or other distributions declared, made or paid after the date of the Admission Document. Financial effects of the Acquisition and the Placing An unaudited pro forma statement of consolidated net assets of the Enlarged Group, prepared for illustrative purposes only, showing the impact of the Acquisition, the Initial Placing and the Placing, is set out in Part VI of the Admission Document. The City Code The terms of the Acquisition give rise to certain considerations under the City Code. Brief details of the Panel, the City Code and the protections they afford are described below. The City Code has not, and does not seek to have, the force of law. It has, however, been acknowledged by government and other regulatory authorities that those who seek to take advantage of the facilities of the securities markets in the United Kingdom should conduct themselves in matters relating to takeovers in accordance with best business standards and so according to the City Code. The City Code is issued and administered by the Panel. The City Code applies to all takeover and merger transactions, however effected, where the offeree company is, inter alia, a listed or unlisted public company resident in the United Kingdom. The Company is such a company and its shareholders are entitled to the protection afforded by the City Code. Pursuant to Rule 9 of the City Code, when any person, or group of persons acting in concert, acquires shares which, when taken together with shares already held by such person or persons, carry 30 per cent. or more of the voting rights of a company which is subject to the City Code, such person or persons, is or are normally required to make a general offer to all shareholders in that company to acquire their shares. Similarly, when any person or persons acting in concert already hold more than 30 per cent. but not more than 50 per cent. of the voting rights of such a company, a general offer will normally be required if any further shares are acquired. An offer under Rule 9 must be in cash and at the highest price paid, within the preceding 12 months, for any shares in the company by the person required to make the offer or any person acting in concert with him. For the purposes of the City Code, a concert party arises where persons acting in concert pursuant to an agreement or understanding (whether formal or informal) actively co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate control of that company. Control means a single holding, or aggregate holdings, of shares carrying 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control. The vendors of a private company generally will be deemed to be acting in concert. The members of the Concert Party are shareholders in Quadrise. Information on the members of the Concert Party is set out in paragraph 9 of Part VIII of the Admission Document. Following completion of the Acquisition, the members of the Concert Party will hold 3,665,341,012 Shares or, following Consolidation, 366,534,097 New Shares representing 79.49 per cent. of the Enlarged Share Capital. The Panel has agreed, however, to waive the obligation to make a general offer under Rule 9 of the City Code that would otherwise arise on completion of the Acquisition, subject to the approval of the Existing Shareholders at the Extraordinary General Meeting voting on a poll. Accordingly, Resolution 2 is being proposed at the Extraordinary General Meeting to be passed, it will require the approval of a simple majority of votes cast on the poll. Shareholders should be aware that, following completion of the Acquisition, the members of the Concert Party will between them hold over 50 per cent. of the Enlarged Share Capital, and (for so long as they continue to be treated as acting in concert) may accordingly be able to increase their aggregate shareholding without incurring an obligation under Rule 9 of the City Code to make a general offer to all Shareholders to acquire their Shares or, following Consolidation, New Shares, although individual members of the Concert Party with the exception of Masefield Energy will not be able to increase their percentage holdings through a Rule 9 threshold without Panel consent. Shareholders should note that as Masefield Energy will hold 59.09 per cent. of the Enlarged Share Capital it may be able to increase its shareholding without incurring an obligation under Rule 9 of the City Code to make a general offer to all Shareholders. New Board On Admission, Messrs Woolgar, and Burgess and I have agreed to resign as directors of the Company. We will receive compensation for loss of office, details of which are provided in paragraph 6(b) of Part VIII of the Admission Document. The New Board will comprise: Ian Williams, Executive Chairman, aged 59 Ian Williams joined Masefield in 1999 with responsibility for the development and management of business ventures. In this capacity, he led the strategy to secure the portfolio of assets and related business interests that culminated in the formation of Masefield Energy. Prior to joining Masefield, Mr Williams spent over 27 years with the Royal Dutch Shell Group in various capacities including as Managing Director and Deputy Chairman of Shell South Africa, Vice President (Downstream) of Shell Philippines and most recently as Head of Strategy & Consulting (Downstream) at Shell International Petroleum Company in London. He has also been actively involved in related industry and business associations. Bill Howe, President and Chief Executive Officer, aged 59 Bill Howe began his career as a process design engineer in the water engineering and oil refining industries prior to joining Foster Wheeler in South Africa in 1975 as Business Development Manager. During his time at Foster Wheeler, Mr Howe held a number of senior executive positions in South Africa as well as the UK, the last one being on the main board of Foster Wheeler Energy Ltd, responsible for international sales and marketing. He subsequently joined Bateman Project Holdings Limited in 1999 as executive director responsible for the company's oil, gas, energy and water engineering businesses. Since 2004, Mr Howe has operated as an independent consultant on technical and commercial issues related to the oil, gas, power, and process plants industries. Mr Howe has a BSc Hons in Chemical Engineering from Birmingham University. Tony Kallis, Commercial Director, aged 57 Tony Kallis is a qualified chemical engineer with over 30 years experience in the oil and energy field. He has spent 30 years with the Royal Dutch/Shell Group during which time he progressed from refining technology and optimisation activities, to supply and distribution functions and finally to marketing and senior general management. Tony has held various senior management and board positions within Shell Group companies including that of chairman of several subsidiary and joint venture boards in Southern Africa. From 1997 to 1999 Tony was based in The Hague and worked as a Global Leadership Consultant within the Shell group, leading substantial programmes in South East Asia, South America and Europe. His most recent role at Shell included responsibility for all commercial business in Southern Africa as well as membership of several global teams responsible for formulating policy and strategy for specialised downstream oil business sectors. Since leaving Shell in 2002, he has operated as an independent consultant to the oil and energy industries and has worked with Masefield on Quadrise business matters in that capacity. Hemant Thanawala, Finance Director, aged 48 Hemant Thanawala is a Chartered Accountant with over 27 years' professional and commercial experience. He joined Masefield in 2001 having previously served for three years as Chief Financial Officer of Premier Telesports Group which was involved in the entertainment sector in parts of Eastern Europe and the former Soviet Union. In this position, he played a key role in two private placings and the listing of the group on the Vienna Stock Exchange. Prior to that, Mr Thanawala served as the finance director of Rostel Group, a multi-national manufacturer and distributor of blue-chip branded consumer products for eight years. Before joining Rostel Group, Mr Thanawala was involved in professional practice in the UK, qualifying with KMG Thomson McLintock (now KPMG). Laurie Mutch, Non-executive Director, aged 58 Laurie Mutch is a management consultant providing advice on governance, strategic planning, business development and change management to multi-national organisations. He has 25 years' experience in the energy industry with the Royal Dutch/Shell Group where he sat on the Board of Shell International Gas & Power, as Executive Director for business development in the Eastern Hemisphere, leading the commercial appraisal and development of all Shell's gas and power projects in the Middle East, South Asia, China, Philippines and the Russian Far East. From 1994 to 1996, he was the Finance Director in Shell International Gas, and Principal Executive to the International Energy Agency's Coal Industry Advisory Board (CIAB), a forum of coal industry leaders and a main source of advice for coal policy matters to the International Energy Agency in Paris. Prior roles include senior management positions in Shell's Coal and Chemical Divisions. During his last two years of service he was Group Chief Information Officer and on the Microsoft and Dell Enterprise Advisory Boards. Mr Mutch holds a BSc in Mathematics & Physics and an MSc in Astrophysics. Tony Lowrie, Non-executive Director, aged 63 Tony Lowrie is currently a managing director in ABN AMRO Bank, based in London. Mr Lowrie was chairman of ABN AMRO Asia Securities Limited, having originally been a partner of Hoare Govett Limited, which he joined in 1972. He has been involved in Asian business for over 38 years, during which time he has resided in a number of Asian countries. He has been a non-executive director of several quoted Asian closed end funds. He is a non-executive director of The Thai-Euro Fund and The Edinburgh Dragon Fund. He has also been a non-executive director of Dragon Oil plc and for 18 years a main board director of JD Wetherspoon plc, both of which are admitted to the Official List. Details of the Proposed Directors' terms of appointment are set out in paragraph 6(a) of Part VIII of the Admission Document. Key personnel and consultants Ian Hole, Vice-President Marketing and Logistics Ian Hole has worked in the energy industry for over 25 years including more than 10 years in the field of emulsified fuels and has an MA in economics from Cambridge University. Mr Hole held a number of roles within the British Petroleum group and worked on the establishment of its joint venture with Petroleos De Venezuela SA to market Orimulsion(R). He then worked for the joint venture and subsequently transferred to Petroleos De Venezuela SA with responsibility for commercial development. He left Petroleos De Venezuela SA in 2000 to join former British Petroleum colleagues as a director of Quadrise Limited and transferred to Masefield in March 2005 specifically to develop the Quadrise initiative. Mr. Hole is to be employed by the Company from Admission and details of his service agreement are given in paragraph 11.1(h) of Part VIII of the Admission Document. Dr Simon Craige, Vice-President Technical Services Simon Craige holds a BSc in Applied Chemistry and a PhD in Bitumen Technology. He has expert specialised knowledge of emulsion science combined with commercial application experience and a substantial understanding of power generation technology and related engineering. Dr Craige was part of the British Petroleum Research Centre team involved in the development of the specialised technology supporting the Orimulsion(R) venture with Petroleos De Venezuela SA in the late 1980s. He then transferred to the joint venture where he worked extensively in Europe in the co-ordination of major commercial developments associated with the conversion of thermal power stations to oil emulsion fuels. He joined Masefield mid 2005, following a three-year term as managing director of a Danish oil re-refining company, DOG A/S. Dr Craige is to be employed by the Company from Admission and details of his service agreement are given in paragraph 11.1(i) of Part VIII of the Admission Document. Dr Ian Duckels, Consultant Ian Duckels has over 30 years' experience in the oil, chemicals and mining industries, having worked for both Shell and the British Petroleum group, including his involvement in the establishment of British Petroleum's Nerefco refinery in Rotterdam as first Chairman of the management board. He has a BSc in Chemistry, a PhD in Chemical Physics, a BSc in Mathematics & Astrophysics and is an associate of the Chartered Institute of Management Accountants. Dr Duckels is retained as a consultant by Quadrise under the agreement referred to in paragraph 11.2.1(e) of Part VIII of the Admission Document. Dr Alan Stockwell, Consultant Alan Stockwell joined Peter Dodd at Quadrise Limited in 1993. Prior to that, he worked for the British Petroleum Research & Development for over 15 years, leading the emulsion technology team responsible for the development of Orimulsion(R). Dr Stockwell also served as a key member of the team that developed Transoil, a product used for the transportation of Wolf Lake bitumen in emulsion form. He has played a key role in the development of MSAR(R) with Quadrise. Dr Stockwell has a BSc in Chemistry and a PhD in Physical Chemistry. Dr Stockwell is retained as a consultant by Quadrise under the agreement referred to in paragraph 11.2.1(f) of Part VIII of the Admission Document. Paul Jennings, Consultant Paul Jennings joined Masefield in 2000 with responsibility for exploration and production finance and business development. He has over 25 years experience in the oil and gas sector as an accountant, economist and commercial and business development director. Mr Jennings spent 17 years with the British Petroleum group, ultimately serving as Head Petroleum Economist for British Petroleum Exploration Limited. He subsequently spent seven years as an independent consultant advising a number of clients including the Russian and Chinese governments and he also served as Commercial Director, Russia for Bitech Petroleum. Mr Jennings is to be retained as a consultant by the Company from Admission under the agreement referred to in paragraph 11.1(e) of Part VIII of the Admission Document. Stephen Jenkins, Consultant Stephen Jenkins joined Masefield in 2003, responsible for all upstream technical management. He is also the chief executive of Nautical Petroleum plc. Mr Jenkins has over 20 years' technical and management experience in exploration and production worldwide with a range of oil and gas companies. Prior to joining Masefield, he spent 11 years at Nimir Petroleum where he was responsible for the development and evaluation of acquisition strategy and all technical dimensions of the company's strategic planning. He has experience in a vast number of regions including North and South America, the Middle East, North Africa, Russia and other OECD countries. Mr Jenkins has an MSc in Petroleum Geology and DIC from Imperial College of Science and Technology University of London, a BSc Hons in Geology from Queens University Belfast and is a Fellow of the Geological Society of London. Mr Jenkins is to be retained as a consultant by the Company from Admission under a consultancy agreement, details of which are given in paragraph 11.1(g) of Part VIII of the Admission Document. Peter Dodd, Consultant Peter Dodd founded Quadrise Limited in the early 1990s. Prior to that, he spent over 25 years with the British Petroleum group in various senior executive roles in the chemicals, liquified petroleum gas and new energies divisions. He was deputy managing director of the British Petroleum joint venture company with Petroleos De Venezuela SA that developed and marketed Orimulsion(R) as a new power station fuel. Mr Dodd is retained as a consultant by Quadrise under the agreement referred to in paragraph 11.2.1(e) of Part VIII of the Admission Document. It is anticipated that the Proposed Directors and certain other key personnel and consultants will participate in the management incentive arrangements described below. Management incentive arrangements The Proposed Directors believe that it is important that directors and key personnel are appropriately motivated and rewarded and accordingly the Company intends to introduce as soon as practicable following Admission, a share option scheme in which qualifying personnel and directors will be eligible to participate. In addition, in recognition of their contributions to the development of the Quadrise Group, the Proposed Directors, certain members of the Concert Party and other key personnel and consultants have been granted options, conditional on Admission, over 165,000,000 Shares or, following Consolidation, 16,500,000 New Shares amounting to 3.61 per cent. of the Enlarged Share Capital. These options have an exercise price of 2p per Share (or, following Consolidation, 20p per New Share). Details regarding the number and terms upon which such options are granted are set out in paragraphs 3, 5 and 9 of Part VIII of the Admission Document. It is proposed that, in aggregate, no more than 10 per cent. of the issued share capital of the Company from time to time should be available under any and all share option arrangements for directors and employees. Corporate governance The Existing Directors and the Proposed Directors recognise the importance of sound corporate governance and the Proposed Directors intend to comply with the QCA's Corporate Governance Guidelines for AIM Companies published in 2005. The Company will establish, with effect from Admission, audit, nominations and compensation committees with formally delegated duties and responsibilities. Laurie Mutch and Tony Lowrie will be members of each committee. The nominations committee will also include Ian Williams. The board will meet regularly and be responsible for strategy, performance, approval of major capital projects and the framework of internal controls. The board will have a formal schedule of matters specifically reserved to it for decision, including matters relating to management structure and appointments, strategic and policy considerations, transactions and finance. To enable the board to discharge its duties, all of the directors will receive timely information. Briefing papers will be distributed to all directors in advance of board meetings, all Proposed Directors will have access to the advice and services of the company secretary, who is responsible for ensuring that the board procedures are followed and that applicable rules and regulations are complied with. The articles of association of the Company, summarised in paragraph 4 of Part VIII of the Admission Document, provide that the Proposed Directors will subject themselves to re-election at the first opportunity after their appointment and one third of the board members will voluntarily submit themselves for re-election at each annual general meeting of the Company. Audit, compensation and nominations committees The audit committee will have primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on. In addition, it will receive and review reports from the Company's management and auditors. The audit committee will meet not less than three times in each financial year and will have unrestricted access to the Company's auditors. The compensation committee will, amongst other things, make recommendations to the board on matters relating to the remuneration of the Chief Executive and other executive directors. The compensation committee will also make recommendations to the board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The nominations committee will have responsibility for leading the process of new board appointments and will make recommendations to the board. Internal financial control The New Board will be responsible for establishing and maintaining the Enlarged Group's system of internal financial control and places importance on maintaining a strong control environment. The key procedures which the Proposed Directors intend to establish with a view to providing effective internal financial control include the following: • the Company will institute a monthly management reporting process to enable the Proposed Directors to monitor the performance of the Enlarged Group; • the New Board will adopt and review a comprehensive annual budget for the Enlarged Group. Monthly results will be examined against the budget and deviations will be closely monitored by the New Board; • the New Board will be responsible for maintaining and identifying major business risks faced by the Enlarged Group and for determining the appropriate courses of action to manage those risks; and • fully consolidated management information will be prepared on a regular basis, at least quarterly. The Proposed Directors recognise, however, that such a system of internal financial control can only provide reasonable, not absolute, assurance against material misstatement or loss. The effectiveness of the system of internal financial control operated by the Enlarged Group will therefore be subject to continuing review by the Proposed Directors. The New Board intends to comply with Rule 21 of the AIM Rules relating to directors' dealings as applicable to AIM companies and will also take all reasonable steps to ensure compliance by the Company's applicable employees. The Company has adopted a share dealing code for this purpose. Dealings and trading Application will be made by the Company for the Enlarged Share Capital to be admitted to AIM following publication of the Admission Document. It is expected that Admission will take place and trading in the Shares or, following Consolidation, the New Shares will commence on the first dealing day following that on which the Resolutions 1 to 5 relating to the Acquisition are passed at the Extraordinary General Meeting. All Shares or New Shares, including the Consideration Shares, may be held in either certificated or uncertificated form (i.e. in CREST). CREST CREST is a paperless security transfer system, which enables securities to be held otherwise than by a certificate and transferred otherwise than by written instrument. The Shares or, following Consolidation, New Shares will be made eligible for settlement in CREST with effect from Admission. Accordingly, settlement of transactions in the Shares or New Shares may take place within the CREST system if the relevant holders so wish. CREST is a voluntary system and holders of Shares or New Shares who wish to receive and retain share certificates will be able to do so. Lock-ins and orderly market arrangements All of the Vendors, Proposed Directors, related parties and applicable employees (each as defined in the AIM Rules) who will, on Admission, own Shares or, following Consolidation, New Shares have undertaken with the Company, Hichens and Smith & Williamson that they will not (subject to certain exceptions) dispose of any of their Shares or, following Consolidation, New Shares until the expiry of 12 months after the date of Admission and that, for a further period of 12 months thereafter, they will not sell or dispose of any of their Shares or New Shares except through the Company's broker(s) from time to time. These undertakings are in respect of a total of 3,936,271,417 Shares or, following Consolidation, 393,627,136 New Shares representing 85.36 per cent. of the Enlarged Share Capital. In addition, certain Placees who are not Vendors, Proposed Directors, related parties or applicable employees, have agreed that they will not during the first twelve months following Admission sell or dispose of any Shares or New Shares except through the Company's broker from time to time. Smith & Williamson has undertaken to the Company and Hichens that it will not (subject to certain exceptions) dispose of any of the Shares or, following Consolidation, New Shares which are to be issued to it in connection with the Proposals (as described in paragraph 11.1(d) of Part VIII of the Admission Document) until the expiry of twelve months from the date of such issue and that, for a further period of twelve months thereafter, it will not sell or dispose of any of the Shares or, following Consolidation, New Shares except following consultation with the Company (unless it is not broker to the Company at such time in which case any such sale or disposal will be through the Company's broker). The provisions of the lock-in and orderly market arrangements will not apply in certain limited circumstances which include, inter alia: • the acceptance of, or the entering of an irrevocable undertaking to accept, a general offer for the whole of the issued equity share capital of the Company in accordance with the City Code; or • any transfer pursuant to a compromise or arrangement between the Company and its creditors; or • any transfer for the purpose only of effecting the appointment of a trustee or new trustee of a family settlement for the benefit of members of the immediate family of a locked-in Shareholder; or • any transfer by the personal representatives of a locked-in Shareholder in the event that he should die; or • any transfer pursuant to a court order. Relationship Agreement Masefield Energy, which will hold 59.09 per cent. of the Enlarged Share Capital, has entered into a relationship agreement with Zareba in which it has undertaken to ensure that the Company and the Enlarged Group can operate independently of Masefield Energy and its associates so as to ensure that all transactions, relationships and agreements are on arms' length commercial terms. Further details of the Relationship Agreement are set out in paragraph 11.1(c) of Part VIII of the Admission Document. Consolidation of Share Capital In order to be more attractive to institutional investors, immediately prior to Admission the Company is proposing to consolidate the Shares into New Shares on the basis of 10 Shares for each New Share. A resolution to this effect is to be proposed at the EGM. Fractional entitlements as a result of the consolidation will not be issued and will be aggregated and (so far as is practicable) sold in the market for the benefit of the Company. Reporting period The Company's accounting reference date is 31 March. Dividends The Company intends to devote its cash resources to MSAR(R) fuel processing and supply projects in the short to medium term and it is not anticipated that the Company will pay a dividend in respect of the current financial period ending 31 March 2006 but, having regard to the earnings, cash flows, distributable reserves and the prospects of the Company, the Proposed Directors intend to adopt a progressive but prudent dividend policy in the future. Annual General Meeting The Company has not yet held an Annual General Meeting and needs to do so shortly in order to comply with the requirements of the Act. The opportunity is therefore being taken to hold the Company's first Annual General Meeting on 18 April 2006 after the EGM. You will find the notice convening the Annual General Meeting on page 144 of the Admission Document. There is less than the usual business to be dealt with at the Annual General Meeting as the Company's first accounting period ends on 31 March 2006 and there will be no audited accounts available to be laid before the meeting. Extraordinary General Meeting On pages 142 and 143 the Admission Document, you will find a notice convening an Extraordinary General Meeting of the Company, which is to be held at 3.00 p.m. on 18 April 2006 at the offices of Smith & Williamson, 25 Moorgate, London EC2R 6AY. The resolutions to be proposed at the EGM will be as follows: 1) to approve the Acquisition for the purposes of Rule 14 of the AIM Rules; 2) to approve the Waiver; 3) to increase the Company's authorised share capital from £1,000,000 to £10,000,000; 4) to grant authority to the directors pursuant to section 80 of the Act to allot relevant securities (inter alia as consideration for the Acquisition); 5) to give power to the directors to allot certain relevant securities for cash free from pre-emption rights as if section 89 of the Act did not apply to such allotment; 6) to change the name of the Company to Quadrise Fuels International plc; and 7) to consolidate the Shares into New Shares. Resolutions (1) to (4) and (7) will be proposed as ordinary resolutions while resolutions (5) and (6) will be proposed as special resolutions. As required by the Panel, Resolution (2) will be decided on a poll. Resolutions (1) to (5) are conditions of the Acquisition and the Placing, which in each case will only proceed if all those Resolutions are carried. Taxation Certain general information relating to United Kingdom taxation with regards to Admission is set out in paragraph 12 of Part VIII of the Admission Document. If you are in any doubt as to your tax position, you should contact your professional adviser immediately. Further information Your attention is drawn to the further information set out in the remainder of the Admission Document and, in particular, to the risk factors set out in Part III of the Admission Document. Action to be taken You will find enclosed with the Admission Document two Forms of Proxy, for use in connection with the EGM and the Annual General Meeting. Whether or not you intend to be present at the EGM and/or the Annual General Meeting, you are asked to complete and return the two Forms of Proxy in accordance with the instructions printed on them so as to be received by Share Registrars Limited, Craven House, West Street, Farnham, Surrey GU9 7EN as soon as possible but in any event not later than 4.00 p.m. on 16 April 2006. Completion and return of the Forms of Proxy will not preclude you from attending and voting at the meetings in person should you so wish. Recommendation and voting intentions The Existing Directors, who have been so advised by Smith & Williamson, believe that the Proposals are fair and reasonable and in the best interests of your Company and its Shareholders as a whole. In providing advice to the Existing Directors, Smith & Williamson has taken into account the Existing Directors' and the Proposed Directors' commercial assessments. Accordingly, the Existing Board unanimously recommends that you vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting as the Existing Directors and their connected persons have irrevocably undertaken to do in respect of their own beneficial holdings amounting in aggregate to 25,800,000 Shares representing approximately 12.69 per cent. of the Existing Shares. Yours faithfully Brian Moritz Chairman INFORMATION ON QUADRISE Background Quadrise is a subsidiary of Masefield Energy, a company formed in 2004 to hold the non-trading asset based business interests of Masefield AG. The core business of Masefield AG is global trading of crude oil and refined oil products. Since inception in 1990, Masefield AG has expanded this business and established worldwide representation in major oil trading hubs with international activity serving a clientele which includes most of the recognised participants in the global crude oil, gas and refined products markets. Masefield AG undertakes physical oil trades with private and state sector oil producers, oil majors, independent traders, oil refiners, power generators and other consumers. Masefield AG has expert capability in risk management and the application of associated techniques in complex energy transactions involving, inter alia, the full range of derivative and forward market instruments. For the year ended 30 June 2005, Masefield AG had turnover of $1,321,844,068, profit before tax of $1,021,212 and net assets of $23,734,863. In 2004, Masefield Energy formed an upstream (exploration and production) oil company, Nautical Holdings Limited, focused on the development of discovered heavy oil reserves in the North Sea and Europe. In March 2005, Nautical Holdings Limited was acquired by Bullion Resources Plc, an AIM quoted company, in a reverse transaction. Bullion Resources Plc changed its name to Nautical Petroleum plc on completion of the reverse transaction. Masefield Energy also formed Quadrise to hold its worldwide downstream (oil processing and marketing) assets and interests. Quadrise holds a portfolio of managed, affiliate and associate interests all of which are engaged in developing business activities associated with the manufacture and marketing of Quadrise MSAR(R) fuels. The MSAR(R) fuels manufacturing process uses proprietary Akzo Nobel residue emulsification technology. Quadrise has certain rights to promote and develop projects for the commercial application of the Akzo Nobel proprietary MSAR(R) technology in all countries other than Canada, the United States, Mexico, Japan and China. These rights are held under the Alliance Agreement, details of which are set out in paragraph 11.2.1(b) of Part VIII of the Admission Document. MSAR(R) Fuel Technology MSAR(R) fuel is a liquid fuel consisting of very fine oil particles dispersed in a water carrier. Heavy oil feedstock is processed into a water based emulsion fuel with oil particles of typically three to five micron size which is, effectively, a pre-atomised fuel. This enhances concepts previously used in emulsified fuels such as Orimulsion(R) as smaller sized, consistent oil particles maximise carbon burnout, improving thermal efficiency and reducing emissions. To produce MSAR(R) fuel, heavy oil feedstock is separated into high value light oil (which can be sold back in the oil market) and low value residue. This residue is processed in the MSAR(R) manufacturing unit, together with water and chemical emulsifiers to produce MSAR(R) fuel, an 'oil in water' emulsion fuel. The MSAR(R) fuel is capable of being used in various combustion applications. The MSAR(R) fuel process substitutes water and emulsifiers for valuable lighter oil fractions which are normally added to dilute the distilled or cracked heavy residue component of fuel oils. These lighter oil fractions can command a higher value as blend components in conventional fuels such as diesel and kerosene. The process, therefore can produce a lower cost substitute for conventional heavy fuel oils. Similarly, the process can also add value to heavy crude oils which can be separated through simple distillation into residues for MSAR(R) feedstock and higher value light crude, using a distillation unit. In the manufacture of MSAR(R) fuel, the heavy oil residue particles are typically milled to approximately 3 to 5 microns in size. Compared to ordinary atomised fuel oil droplets, an MSAR(R) droplet has a far greater surface area facilitating increased carbon burnout. The greater carbon burnout results in lower quantities of emissions. Thermal Power Plant Fuels The MSAR(R) processing technology enables the conversion of low value heavy oil residues into emulsion fuels for use in thermal power generation and other industrial steam generation applications. MSAR(R) fuels may be used to replace both fuel oils and coal in thermal power generation and, particularly relative to coal, offer significant environmental advantages associated with greenhouse gas emissions. When substituted for coal, carbon dioxide emissions per kilowatt of power generated are reduced by approximately 20 per cent. The Quadrise Directors believe that the cost reductions associated with using MSAR(R) fuels may, in certain circumstances, restore the viability and extend the economic life of 'brown field' oil fired steam cycle power plants while also making it viable for power plant operators to invest in the plant required to meet new emissions standards. Diesel Fuel Substitution MSAR(R) fuels are also suitable for use in diesel powered generators. Early trials with Rolls Royce produced very promising results and a fuel qualification programme, coordinated by Quadrise Canada, is currently underway with a leading manufacturer of diesel fuelled power generator plants. Diesel based power generation developments tend to have short lead times and modular capacity expansion. It is believed that a significant opportunity exists for re-fuelling existing installed capacity. MSAR(R) Turbine Fuel Quadrise Limited, a wholly owned subsidiary of Quadrise, owns a patent relating to the combustion of oil in water emulsion fuels in turbines. This requires further application development work before it will be ready for general market application. It is intended that this be undertaken by Quadrise in association with a major turbine manufacturer. The Quadrise Directors believe that the cost advantage of Quadrise MSAR(R) fuel, when compared with conventional turbine fuels, is likely to be considerable and potentially offers a further business opportunity with considerable profit potential. Business of Quadrise The Quadrise vision is: 'To be a profitable and growing business with representation in major world markets, acknowledged to be the leading supplier of oil emulsion fuels for steam and power generation by 2010'. The strategic focus of Quadrise is to develop the market for MSAR(R) fuels through the establishment of viable process locations and supply chain operations for major markets, the negotiation of long term supply contracts and joint ventures with key power utilities, all supported by a recognised specialist inhouse resource base being developed by Quadrise. Quadrise has certain rights to promote and develop projects for commercial application of the proprietary MSAR(R) process technology of Akzo Nobel in all countries except the United States, Canada, Mexico, China and Japan under the Alliance Agreement. Further details of the Alliance Agreement are set out in paragraph 11.2.1(b) of Part VIII of the Admission Document. It it intended that Quadrise will participate in the North American markets through its interests in Quadrise Canada and Quadrise US, further details of which are set out below. Quadrise has an in-house team of commercial and technical experts who have significant experience in the oil and energy business including those individuals who first identified the MSAR(R) business opportunity. This team has built up the Quadrise portfolio of assets, rights, interests and prospects over several years. The Proposed Directors believe that there is opportunity for mutual benefit within the portfolio as there is considerable synergy in base business development and related commercial and technical support programmes. Quadrise Limited Quadrise Limited is a wholly owned subsidiary of Quadrise and is the registered owner of the MSAR(R) trademark and of a patent relating to the combustion of oil in water emulsion fuels in turbines. Quadrise Power Systems AG Quadrise Power Systems AG is a wholly owned subsidiary of Quadrise and it is intended that it will be responsible for the development of the MSAR(R) fuels business in markets outside North America through business associations with joint venture partners or direct contracts with fuel clients. In particular, it is intended that Quadrise will identify opportunities in developing economies and Quadrise Power Systems AG will exploit these opportunities in association with local partners and government agencies, where appropriate. Quadrise Canada Quadrise Canada, in which Quadrise and Quadrise Limited have a combined 20.6 per cent. equity interest, is a self managed associate company specialising in the application of the MSAR(R) fuels technology in the generation of steam and power used in SAGD heavy oil production in Alberta. The production systems involve horizontal wells and steam injection to heat the oil reservoirs. The MSAR(R) technology uses the produced heavy oil to produce a fuel for steam generation. The economics are considerably better than the current practice of using natural gas for boiler fuel; the MSAR(R) fuel approach materially impacts the economics of oil production and the viability of new field development. Present indications are that the MSAR(R) technology can improve the internal rate of return of a typical SAGD project by in excess of 20 per cent.. Quadrise Canada has an agreement with Colt Technologies Inc. providing exclusive rights for North America for the emulsion manufacturing component of the patented Colt Technologies Inc. combustion process. Quadrise Canada intends to build a portfolio of related intellectual property patents in association with several leading industry partners including ColtKBR and Paramount Resources Limited. With its exclusive rights to Akzo Nobel's MSAR(R) technology in Canada combined with the major growth market of SAGD oil operations, the Quadrise Directors believe that Quadrise Canada has considerable business potential. In December 2005, Quadrise Canada completed a C$32 million financing and has advised shareholders and investors of its intention to provide liquidity, possibly through a listing on a recognised investment exchange by mid 2007. In addition to their combined 20.6 per cent. equity interest, Quadrise and Quadrise Limited between them also have the right to a combined royalty of 6.67 per cent. of the net (before tax) income of Quadrise Canada. Quadrise US Quadrise US is a business in formation which is intended to have certain rights to the manufacture and marketing of MSAR(R) fuels for supply to the thermal power generation market in the United States and Mexico. The formation of Quadrise US is the subject of a non-binding memorandum of understanding ('MOU') entered into on 1 November 2005, further details of which are given in paragraph 11.2.1(c) of Part VIII of the Admission Document. Assuming that legally binding arrangements are concluded in line with the terms recorded in the MOU, Quadrise will have the right to a 49.7 per cent. interest in Quadrise US, Quadrise America Inc. (a wholly owned subsidiary of Quadrise Canada) will have 29.7 per cent. and a US based partner will have a 19.7 per cent. entitlement with the obligation to provide US$1 million seed financing as well as to raise further funding as required. (Effectively Quadrise will hold a further 6 per cent. indirectly through its share of Quadrise Canada and thus it will potentially have a majority interest in the US business). Marketing and Operations The Quadrise Directors believe that it is possible to progress from a small scale single separator and processor configuration, which could be located on a single power plant site, to a substantial process plant manufacturing operation supplying MSAR(R) fuels to several clients. The first strategic marketing priority is the establishment of process sites to be used as MSAR(R) production facilities and technology reference plants. These process sites will be limited in scale and used to supply MSAR(R) fuel to client's power plants as a precursor to (or instead of) future supply from larger scale, more centralised manufacturing facilities. Figure 9 illustrates the supply chain for a larger manufacturing facility. The marketing focus will be on oil fired thermal power stations with fuel cost and emissions compliance difficulties, as well as consumers of Orimulsion(R). A further early focus will involve the identification of suitable local business associates for prospective high potential markets (such as India) and creation of related joint ventures to accelerate business development. In respect of the process sites, Quadrise will evaluate the potential of a number of location options taking into consideration feedstock and MSAR(R) product shipping costs, the extent of existing utility and tankage facilities, the availability of feedstock and MSAR(R) product transfer facilities, as well as the availability of local support for the operation and maintenance of the production plant. Local regulatory and environmental issues will also be considered. The actual design and construction of the facilities are intended to be carried out substantially on a turnkey contract basis by SNC Lavalin UK Limited, who will provide an overall integrated design on a project by project basis and who will also manage the operation and maintenance of the production plants. Quadrise has entered into a frame agreement with SNC Lavalin UK Limited to take advantage of its expertise in the design and construction of hydrocarbon processing facilities. Further details of this contract are set out in paragraph 11.2.1(a) of Part VIII of the Admission Document. To date, Quadrise has conducted successful burn trials at 3 power plants located in the UK and Europe. Discussions on the supply of MSAR(R) fuel to those and associated power plants are in hand, as are discussions on supply to a further power plant in South East Asia. Negotiations are also currently in progress to establish process sites in three European or Middle Eastern locations for central processing and onward distribution of MSAR(R) fuels to the power plant client base. Quadrise Canada has completed an extensive programme of burn trials at the facilities of CANMET, testing samples for several bitumen emulsions which ignited and burned well in the research tunnel furnace. The results led to a pilot plant trial, completed in December 2005, on a Deer Creek oil field development site. Several major Canadian oil production companies supported the pilot project in order to assess the experience and findings. Recent Trends and Prospects The first emulsified fuel available to worldwide markets was Orimulsion(R) supplied using process technology developed by Petroleos de Venezuela in partnership with British Petroleum in Venezuela in the 1980s. Orimulsion(R) has been used worldwide as a fuel for thermal power generation with annual consumption typically exceeding 100,000 barrels per day. For the past decade consumption was effectively limited by Orimulsion(R) production capacity. Quadrise MSAR(R) fuels offer several advantages over Orimulsion(R). Orimulsion(R) is a single source product based on a single feedstock, Orinoco Bitumen. MSAR(R), by contrast, can be produced using feedstock from a variety of sources and with differing characteristics, specifications and quality. This allows flexible, multiple sourcing and the opportunity to manufacture locally on a client's site. In addition, the MSAR(R) process is able to achieve smaller average residue particle sizes and thereby assure superior carbon burnout. These advantages are commercially significant given worldwide government pressure to reduce pollutant emissions, particularly from power plants. OECD data shows global oil use in power generation to be equivalent to over 400 million tonnes of MSAR(R) per annum. This represents a substantial business opportunity for the conversion of thermal power plants to MSAR(R). In addition, there have been uncertainties recently on the future availability of supplies of Orimulsion(R) which the Proposed Directors believe are due to arrangements between Chinese interests and Petroleos de Venezuela which are likely to result in those Chinese interests having a preferred call on the available fuel. These developments have already led to the reduction or termination of Orimulsion(R) fuels supplies to major users and result in significant potential for the manufacture and marketing of MSAR(R) fuels to supply former Orimulsion(R) clientele. There is a worldwide trend towards the production of heavier crude oil and from an economic perspective, MSAR(R) provides a simple value-enhancement option for such crudes. Splitting these crude oils allows Quadrise to utilise the residue as low cost feedstock for its MSAR(R) fuel sales. Further, Quadrise can then sell the higher value light oil content into the refining market as a premium refining feed with very low residue content. This is particularly important with a worldwide trend towards heavier average produced crude barrels, and greater market demand for the lighter distillate barrels required for transportation fuels. This also tends to underpin the prospects for light to heavy oil value spreads which generally favour the MSAR(R) business. The Proposed Directors believe that many developing economies would benefit from the recovery of light oils to contribute to their transportation fuel pools. This would either reduce the importation of finished light fuel products or provide an availability of high value fuels for export. Quadrise intends to identify and exploit these opportunities in association with local partners and government agencies, where appropriate. A focus of technology development in the power generation field concerns emissions reduction and thermal efficiency. MSAR(R) fuels hold significant promise in both respects, not only from re-fuelling and supply of 'customised' low sulphur fuels, but also in co-firing or over-firing in coal fuelled plants for flame stabilisation and emissions mitigation. MSAR(R) achieves significantly lower carbon oxides and particulate emissions than coal and lower nitrogen oxide emissions than both coal and commercial fuel oils. Research studies undertaken by Quadrise experts have also illustrated that MSAR(R) turbine fuels could, in future, provide an environmentally friendly basis for 're-powering' of both oil and coal fuelled brown-field power plants. The Quadrise Directors believe that MSAR(R) turbine fuels have the potential to improve efficiency and commercial returns while ensuring compliance with future emissions standards. RISK FACTORS In addition to the other relevant information set out in the Admission Document, the following specific factors should be considered carefully in evaluating whether to make an investment in the Company or whether to approve the Acquisition at the EGM. An investment in the Company may not be suitable for all recipients of the Admission Document. If you are in any doubt about the action you should take, you should consult a person authorised under FSMA if you are resident in the United Kingdom or, if you are not resident in the United Kingdom, an appropriate independent adviser who specialises in advising on the acquisition of shares and other securities. A prospective investor ought not to infer any relative importance in relation to the risk factors by reference to the order in which they appear. It should be noted that the risks described below are not the only risks faced by the Company. There may be additional risks that the Existing Directors and the Proposed Directors currently consider not to be material or of which they are unaware. The information below does not purport to be an exhaustive list or summary of the risks affecting the Enlarged Group. Shareholders and investors should consider carefully whether they wish to approve the Acquisition or whether an investment in the Company is suitable for them, in light of the matters referred to in the Admission Document, their personal circumstances and the financial resources available to them. Market risk The marketability of MSAR(R) fuels will be affected by numerous factors beyond the control of the Enlarged Group. These factors include variability of price spreads between light and heavy oils, oil, gas and electricity prices both for prompt and future delivery, and the associated cost and availability of heavy oil and residue feedstocks, and realisations for light fractions traded out in the fuels markets. Commercial risks There is a risk the Enlarged Group will not achieve a commercial return due to major unanticipated change in a key variable or, more likely, the aggregate impact of changes to several variables which results in sustained depressed margins. The competitive position could be affected by changes to government regulations concerning taxation, duties, specifications, importation and exportation of hydrocarbon fuels and environmental aspects. Freight costs contribute substantially to final cost of supplied products and a major change in the cost of bulk liquids freight markets could have an adverse effect on the economics of the fuels business. Alliance Agreement The Alliance Agreement from which Quadrise derives a substantial part of its rights to promote and develop projects for the commercial application of the MSAR(R) oil process technology of Akzo Nobel is capable of being terminated by either Quadrise or Akzo Nobel on 12 months' notice at any time after 20 December 2009. While the Proposed Directors believe that it is likely to be in the commercial best interests of Akzo Nobel to allow the Alliance Agreement to continue after 20 December 2009, there can be no guarantee that this will occur. In addition, under the Alliance Agreement, the terms of the licence granted by Akzo Nobel and the supply of the relevant system by Akzo Nobel are to be agreed on a case by case basis in relation to each project. Shareholders' attention is drawn to the summary of the Alliance Agreement detailed in paragraph 11.2.1(b) of Part VIII of the Admission Document. Competition risks There is a risk that new competition could emerge with similar technologies but sufficiently differentiated to challenge the Akzo Nobel patent protection for the MSAR(R) oil process technology. This could result, over time, in further price competition and a pressure on margins beyond that assumed in the Company's business planning. Joint venture parties and contractors The Proposed Directors are unable to predict the risk of financial failure or non compliance with respective obligations or default by a participant in any joint venture in which the Enlarged Group is, or may become a party; insolvency or other managerial failure by any of the contractors used by the Enlarged Group in its fuel processing and distribution activities; or insolvency or other managerial failure by any of the other service providers used by the Enlarged Group for any activity. Dependence on key personnel The Enlarged Group's business is dependent on retaining and obtaining the services of a small number of key personnel of the appropriate calibre as the business develops. The success of the Enlarged Group is, and will continue to be to a significant extent dependent on the expertise and experience of the Proposed Directors, management and consultants and the loss of one or more could have a materially adverse effect on the Enlarged Group. Insurance risks The Company plans to insure its operations in accordance with industry practice and plans to insure the risks it considers appropriate for the Enlarged Group's needs and for its circumstances. Insurance cover will not be available for every risk faced by the Enlarged Group. Although the Enlarged Group believes that it or the operator of the relevant plant should carry adequate insurance with respect to its operations in accordance with industry practice, in certain circumstances the Enlarged Group's or the operator's insurance may not cover or be adequate to cover the consequences of such events. In addition the Enlarged Group may be subject to liability for pollution, or other hazards against which the Enlarged Group or the outsourced service operator may elect not to insure because of high premium costs or other reasons. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of operations of the Enlarged Group. There is a risk that insurance premiums may increase to a level where the Enlarged Group considers it is unreasonable or not in its interests to maintain insurance cover or not to a level of coverage which is in accordance with industry practice. In addition, the Enlarged Group may, following a cost-benefit analysis, elect to not insure certain risks on the ground that the amount of premium payable for that risk is excessive when compared to the potential benefit to the Enlarged Group of the insurance cover. Environmental risks The Enlarged Group's operations are subject to the environmental risks inherent in the oil processing and distribution industry. The Enlarged Group will be subject to environmental laws and regulations in connection with all of its operations. Although the Enlarged Group intends to ensure compliance in all material respects with all applicable environmental laws and regulations, there are certain risks inherent to its activities, such as accidental spills, leakages or other circumstances, that could subject the Enlarged Group to extensive liability. Further, the Enlarged Group may require approval from the relevant authorities before it can undertake activities which are likely to impact the environment. Failure to obtain such approvals will prevent or delay the Enlarged Group from undertaking its desired activities. The Enlarged Group is unable to predict definitively the effect of additional environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would materially increase the Enlarged Group's cost of doing business or affect its operations in any area. Currency risk The Enlarged Group will report its financial results in Sterling, while many contracts in the oil and gas industry are principally denominated in United States dollars. Fluctuations in exchange rates between currencies in which the Enlarged Group operates may cause fluctuations in its financial results and may have an adverse effect on income and/or asset values. No profit to date The Enlarged Group has incurred aggregate losses since its inception and it is therefore not possible to evaluate its prospects based on past performance. Since the Enlarged Group intends to continue investing in the various projects it currently holds an interest in, the Proposed Directors anticipate making further losses for the financial period ending 31 March 2007. There can be no certainty that the Enlarged Group will achieve or sustain profitability or achieve or sustain positive cash flow from its activities. Future funding requirements The Enlarged Group may need to raise additional funding to undertake work beyond that capable of being funded by its existing cash resources. There is no certainty that this will be possible at all or on acceptable terms. Affiliates and associates, such as Quadrise Canada and/or other entities which are not majority controlled by the Enlarged Group, may decide to raise external funding and this may lead to a reduction in the Enlarged Group's interest in, and hence the level of control it exercises over such affiliates and associates. Corporate and regulatory formalities The conduct of petroleum processing and distribution require compliance by the Enlarged Group with numerous procedures and formalities in many different national jurisdictions. It may not in all cases be possible to comply with or obtain waivers of all such formalities and it may not therefore be possible to operate in certain jurisdictions. Volatility of prices of oil and gas The demand for, and price of, oil and gas is highly dependent on a variety of factors including international supply and demand, the level of consumer product demand, weather conditions, the price and availability of alternative fuels, actions taken by governments and international cartels, and global economic and political developments. International oil prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future. The Enlarged Group will be substantially reliant on the value spread between light and heavy oil products. It is also affected by inter-fuels competition and the relative prices of oil, coal and gas when used as steam raising and power generation fuels. Fluctuations in oil and gas prices and, in particular, a material change to relative prices may have a material adverse effect on the Enlarged Group's business and financial condition. Economic, political, judicial, administrative, taxation or other regulatory factors The Enlarged Group may be adversely affected by changes in economic, political, judicial, administrative, taxation or other regulatory factors, in the areas in which the Enlarged Group will operate and conduct its principal activities. Share price volatility and trading basis The Shares are not listed on the Official List and although the Shares or, following Consolidation, New Shares are to be traded on AIM, this should not be taken as implying that there will be a liquid market in the Shares or, following Consolidation, New Shares. A return on investment in the Shares or, following Consolidation, New Shares may, therefore, in certain circumstances be difficult to realise. The price at which the Shares or, following consolidation, New Shares may trade and the price which Shareholders may realise for their Shares or, following Consolidation, New Shares will be influenced by a large number of factors, some specific to the Company and some which may affect quoted companies generally. These factors could include the performance of the Enlarged Group's operations, large purchases or sales of Shares or, following Consolidation, New Shares, liquidity (or absence of liquidity) in the Shares or, following Consolidation, New Shares, currency fluctuations, legislative or regulatory changes and general economic conditions. The value of the Shares or, following Consolidation, New Shares is liable therefore to fluctuate and may not reflect the underlying asset value of the Enlarged Group. Application will be made for the Enlarged Share Capital to be admitted to trading on AIM. AIM is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding than those of the Official List. Neither London Stock Exchange nor the UK Listing Authority has itself examined the Admission Document for the purposes of Admission. Investment risk Shareholders should be aware that the value of an investment in the Enlarged Group may go down as well as up. In addition, there can be no certainty that the market value of an investment in the Enlarged Group will fully reflect the underlying value of the Enlarged Group. Taxation Any change in the Enlarged Group's tax status or the tax applicable to holding Shares or, following Consolidation, New Shares or in taxation legislation or its interpretation, could affect the value of the investments held by the Enlarged Group, affect the Enlarged Group's ability to provide returns to Shareholders and/or alter the post-tax returns to Shareholders. Statements in the Admission Document concerning the taxation of the Company and its investors are based upon current UK tax law and practice which is subject to change. DEFINITIONS The following definitions shall apply throughout the Admission Document and this announcement unless the context otherwise requires: 'Acquisition' the proposed acquisition of Quadrise from the Vendors by the Company 'Acquisition the agreement dated 22 March 2006 between Zareba and the Agreement' Vendors, details of which are given in paragraph 11.1(a) of Part VIII of the Admission Document 'Act' the Companies Act 1985, as amended 'Admission' the admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules 'AIM' the AIM market operated by London Stock Exchange 'AIM Rules' the AIM Rules for companies, published by the London Stock Exchange 'Akzo Nobel' Akzo Nobel Surface Chemistry AB 'alliance the alliance agreement between Akzo Nobel and Masefield Agreement' Energy dated 20 December 2004 and assigned to Quadrise on 2 December 2005, details of which are set out in paragraph 11.2.1(b) of Part VIII of the Admission Document 'Annual General the annual general meeting of the Company convened for 4.00pm Meeting' or on 18 April 2006 or any adjournment thereof, a notice of 'AGM' which is set out on page 143 of the Admission Document 'Board' or the existing directors of the Company, whose names are set 'Existing out on page 4 of the Admission Document Directors' 'C$' Canadian Dollars 'CANMET' the CANMET Energy Technology Centre - Ottawa, a research arm of Natural Resources Canada, a Canadian federal government department 'City Code' The City Code on Takeovers and Mergers 'ColtKBR' a joint venture between Colt Engineering Corporation and KBR (Kellogg Brown and Root), the engineering and construction division of Halliburton Company of Houston, Texas 'Company' or Zareba plc, a company incorporated under the laws of England 'Zareba' and Wales, with Registered No. 5267512 'Concert Party' those Vendors assumed to be acting in concert whose names are set out in paragraph 9 of Part VIII of the Admission Document 'Consideration the 3,758,271,417 Shares, or following Consolidation, the Shares' 375,827,136 New Shares to be allotted to the Vendors on completion of the Acquisition 'CREST' the computerised system for trading securities in uncertificated form in the UK operated by CRESTCo Limited 'Directors' the Existing Directors and the Proposed Directors 'Enlarged Group' the Company and its subsidiary undertakings as enlarged by the Acquisition 'Enlarged Share the issued share capital of the Company at Admission Capital' comprising the Existing Shares, the Consideration Shares, the Initial Placing Shares and the Placing Shares 'Existing the existing 203,300,000 Shares in issue as at the date of Shares' the Admission Document 'Existing holders of Existing Shares Shareholders' 'Extraordinary the extraordinary general meeting of the company convened for General Meeting' 3.00pm on 18 April 2006, or any adjournment thereof, a notice or 'EGM' of which accompanies the Admission Document 'Forms of Proxy' the form of proxy accompanying the Admission Document to be used by Shareholders in respect of the EGM and the AGM, as appropriate 'FSA' the Financial Services Authority 'FSMA' the Financial Services and Markets Act 2000 'Group' the Company and its subsidiaries from time to time 'Hichens' Hichens, Harrison & Co. plc 'Initial the conditional placing of the Initial Placing Shares Placing' 'Initial Placing 1.75p per Share or on Consolidation, 17.5p per New Share Price' 'Initial Placing 14,285,713 Shares or, on Consolidation 1,428,571 New Shares Shares' to be issued pursuant to the Initial Placing 'London Stock London Stock Exchange plc Exchange' 'Masefield AG' Masefield AG, a company incorporated under the laws of Switzerland with Registered No. CH-170.3.012.268-7 'Masefield Masefield Energy Holdings AG, a company incorporated under Energy' the laws of Switzerland with Registered No. CH-170.3.012.268-7 'Masefield Energy the directors of Masefield Energy namely James Laurence Directors' Daley, Philippe Jaceard and Peter Biberstein, all of Baarerstrasse 69, CH6300 Zug, Switzerland 'Masefield Masefield Energy and its subsidiaries Group' 'Minority certain minority shareholders who, together, own or are Shareholders' entitled to approximately 27.5 per cent. of the issued share capital of Quadrise 'N$' Namibian Dollars 'NEC Option A' a preformatted turnkey engineering and construction contact developed under the auspices of the Institution of Civil Engineers and widely adopted for capital projects 'New Board' or the proposed directors of the Company following Admission 'Proposed whose names are set out on page 4 of the Admission Document Directors' 'New Shares' ordinary share of 1p each in the capital of the Company following the Consolidation 'Notice of EGM' notice of EGM set out on pages 141 and 142 of the Admission Document 'OECD' Organisation for Economic Co-operation and Development 'Official List' the Official List of the UK Listing Authority 'Panel' the Panel on Takeovers and Mergers 'Placee' a person who has conditionally agreed to subscribe for Placing Shares under the Placing 'Placing' the conditional placing of the Placing Shares at the Placing Price on the terms set out in the Placing Agreement 'Placing the agreement dated 22 March 2006, between Zareba, Hichens Agreement' and Smith & Williamson relating to the Placing described in paragraph 11.1(d) of Part VIII of the Admission Document 'Placing Price' 2p per Share or, on Consolidation, 20p per New Share 'Placing Shares' 633,411,500 Shares or, following Consolidation, 63,341,150 New Shares, to be issued pursuant to the Placing 'Preliminary the agreement dated 18 November 2005 between the Company and Merger Masefield Energy Pursuant to which the Company conditionally Agreement' agreed to acquire the issued share capital of Quadrise 'Proposals' the Acquisition, Placing, Waiver and Admission 'Quadrise' Quadrise International Limited, a company incorporated under the laws of England and Wales, with Registered No. 02507321 'Quadrise Quadrise Canada Fuels Systems Inc, a company incorporated Canada' under the laws of Canada, with Registered No. 2010469373 'Quadrise Hemant Thanawala, Ian Williams, Tony Kallis and Bill Howe Directors' 'Quadrise Group' Quadrise and its subsidiaries, affiliates and associated companies including Quadrise Canada 'Quadrise Power Quadrise Power Systems AG, a company incorporated under the Systems AG' laws of Switzerland, with Registered no. CH-170.3.026.181-7 'Quadrise ordinary shares of 1p each in the capital of Quadrise Shares' 'Quadrise US' Quadrise Fuels UK LP, a proposed limited partnership, to be established in Delaware, USA 'Resolutions' the resolutions set out in the Notice of EGM 'Shareholders' holders of Shares, or, following Consolidation, New Shares 'Smith & Smith & Williamson Corporate Finance Limited Williamson' 'UK Listing the FSA, in its capacity as the competent authority for the Authority' purposes of the admission of securities to the Official List 'United States' the United States of America (including any state of the United States of America and the District of Columbia), its possessions and territories, and all other areas subject to its jurisdiction 'US Person' a US person as defined in the Regulation S under the United States Securities Act of 1933 (as amended) 'Vendors' Masefield Energy, the holder of approximately 72.5 per cent. of the issued share capital of Quadrise, together with the Minority Shareholders 'Waiver' the waiver by the Panel of the obligation of the Concert Party to make a general offer under Rule 9 of the City Code GLOSSARY The following technical terms are used in the Admission Document and this announcement: Bpd barrels per day Burn trial an event where fuel is burnt in a test of full boiler environment as part of a trial Cracked fuel the residue portion derived from the catalytic or thermal cracking oil process of a fuel MSAR(R) a registered trademark belonging to Quadrise Limited which stands for Multi-phase Superfine Atomised Residue, and is the trade name applied to liquid fuel, produced using the process proprietary to Akzo Nobel, consisting of very fine oil droplets dispersed in a water carrier Orimulsion(R) a registered trademark belonging to Bitumenes Orinoco, S.A a wholly owned subsidiary of Petroleos de Venezuela S.A. It is the name applied to an emulsified liquid fossil fuel produced from natural bitumen which ahs been extensively utilised on a commercial scale by power utilities and in the industrial sector Pre-atomised a fuel in which the oil droplets in the oil in water emulsion are fuel of such small diameter that the oil content of the fuel is effectively in an atomised condition prior to reaching in burner in the combustion process SAGD Steam Assisted Gravity Drainage, a technology for separating and producing oil and/or bitumen from oil/tar sands and heavy oil deposits using steam This information is provided by RNS The company news service from the London Stock Exchange

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