TIDMECO
RNS Number : 2461W
Eco (Atlantic) Oil and Gas Ltd.
13 November 2017
13 November 2017
ECO (ATLANTIC) OIL & GAS LTD.
("Eco Atlantic", "Company", "Eco" or, together with its
subsidiaries, the "Group")
CAD $14m subscription by Africa Oil Corp
Strategic Alliance Agreement on Current and New Ventures
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX-V:EOG), is
pleased to announce that the Company has entered into an agreement
with Africa Oil Corp ("AOC") whereby AOC has subscribed for shares
in the Company as well as entered into a Strategic Alliance
Agreement to identify new projects to add to the Company's
portfolio (the "Subscription Agreement").
Highlights:
-- The Company is raising approximately CAD $14 million (GBP8.46
million) by way of a subscription
-- The price of the Subscription Shares represents a premium of
approximately 28% per cent to the closing mid-market price of
0.375c (TSX-V) / 22.25GBp (AIM) on 10 November 2017
-- AOC will hold an interest in Eco of approximately 19.77% per cent. on Admission
-- Funds raised will be used to actively identify, negotiate and
contract new oil and gas exploration assets and conduct the initial
work programmes
-- Keith Hill, president and CEO of AOC, expected to be
appointed to the Board of Eco as a non-executive director
-- Derek Linfield, a non-executive director of Eco, will step
down from the Board of Eco in order to make room for Keith Hill.
Mr. Linfield will continue to serve as a consultant to the
Company
-- Strategic Alliance Agreement entered into with AOC to bid
jointly on any new assets or ventures proposed to be acquired by
Eco
Gil Holzman, President and CEO of Eco commented:
"We are delighted to have entered into these agreements with
AOC. AOC are a like-minded company with a similar philosophy. They
are, like Eco, leaders in and focused on frontier regions with a
view to acquiring and developing world class assets. They have a
broad and highly experienced technical team as well as significant
financial muscle to deliver their programmes and strategy. Also the
fact that AOC has chosen Eco as a strategic investment is a
powerful further endorsement of Eco's strategy as well as a
testament to the Company's future potential and the quality of our
portfolio.
"Eco is now in an incredibly strong financial position. We are
funded for our forthcoming work programmes in both Guyana and
Namibia through a series of agreements with Tullow Oil, AziNam, and
Total and through these new agreements with AOC; we now also have
the capability, as well as an industry leading partner, to identify
further assets and to accelerate the work programmes on them. AOC
is also, through its shareholding, now intrinsically aligned with
Eco to deliver this strategy."
"This is a very exciting and busy time for Eco and we look
forward to working with the AOC team to identify new projects to
add to our portfolio whilst progressing our current assets in
Guyana and Namibia together with our existing industry leading
partners.
"I would also like to thank Derek Linfield for his great
services to the company as a NED in the past year. Derek joined the
board to contribute his expertise in assisting companies with AIM
and TSX-listings and was of great assistance on our AIM listing.
However, he has offered to step aside to make room for Keith Hill
to join the board on behalf of our new strategic investor. We are
delighted that Derek will continue as a consultant to the Company
to contribute his vast experience in the Canadian and UK capital
markets and in securities and corporate law, as well as in the
natural resources sector."
Further Information
The Company is raising CAD $14 million (GBP8.46 million) by way
of a subscription for 29,200,000 new common shares of no par value
("Common Shares") (the "Subscription Shares") at CAD 0.48
(approximately GBP 0.29) per Subscription Share by Africa Oil
Corporation (the "Subscription"). In conjunction with the
Subscription, Eco Atlantic has also entered into a Strategic
Alliance Agreement with Africa Oil Corporation ("AOC") in relation
to certain strategic arrangements, as further detailed below.
The net proceeds of the Subscription, amounting to approximately
CAD $13.5 million (GBP8 million GBP) will be applied to actively
identifying, negotiating and contracting new oil and gas
exploration assets to be added to the Company's current portfolio,
the conduct of initial work programmes (including seismic surveys)
on blocks under application, working capital for additional due
diligence on potential licence acquisitions, potential advancement
of work programmes on the Tamar and Sharon blocks offshore Namibia,
and to provide general corporate working capital.
Africa Oil Corp. is a Canadian oil and gas company with assets
in Kenya and Ethiopia, including the South Lokichar Basin (25%
working interest in Blocks 10BB and 13T), where the company and its
Joint Venture Partners are undertaking activities aimed at
sanctioning development. The Company is listed on the Toronto Stock
Exchange and on Nasdaq Stockholm under the symbol "AOI".
Following completion of the Subscription, Mr. Keith Hill,
President and CEO of AOC is expected to join the Board of Eco as a
non-executive director. A further announcement will be made at that
time.
Following the issue of the Subscription Shares, AOC will hold
29,200,000 Common Shares in Eco Atlantic representing approximately
19.77 per cent. of the Company's issued share capital as enlarged
by the Subscription Shares.
Further details on the Subscription
The Subscription is conditional on approval by the TSX Venture
Exchange and admission of the Subscription Shares to trading on AIM
("Admission"). Application for Admission will been made once the
Subscription proceeds have been received, which is currently
expected to take place of 15 November 2017 (or such other date as
is mutually agreed between the parties). Admission is therefore
currently expected to commence at 8:00am on 17 November 2017. On
Admission, the Company will have a total of 147,683,433 common
shares in issue.
The Subscription Agreement includes standard representations and
warranties as well as the following key terms
-- AOC will have the right, for so long as it holds over 10 per
cent. of the Company's issued share capital, to participate in any
future equity financing at the same price as any other participants
on a pro rata basis to its percentage holding in the Company at the
time of any such fundraise (excluding the issue of common shares
pursuant to the exercise of convertible securities, issues of
common shares to Directors and employees of the Company or any
capital reorganisation).
-- AOC will have the right, for so long as it holds over 12.5
per cent. of the Company's issued share capital, to nominate a
Director to the Board of Eco Atlantic subject to approval by the
Company's Nominated Adviser in accordance with the AIM Rules
-- For a period of 24 months from Admission, save where there
has been a material change in the Board of Eco, AOC (including its
affiliates and representatives) will not, without the prior
permission of Eco Atlantic, acquire more than 29.9 per cent. of the
Company's issued share capital from time to time. A material change
to the Board shall be determined as being a change in both the
Chief Executive and Chief Operating Officer of the Company or the
appointment or election of new individuals to more than five board
positions (post the changes pursuant to this Subscription). For the
same period, AOC also agrees not to engage in any proxy
solicitation of, or make any tender offers to, Eco Atlantic's
shareholders, nor will it seek to control the management or board
of Eco Atlantic.
o AOC also agrees that it will not sell its entire holding of
common shares, nor any portion of its holding of 5 per cent. or
more, to any third party unless such acquiring party agrees to the
terms above regarding the acquisition of common shares in Eco. This
condition will not apply to any sales of common shares by AOC made
to unknown third parties through a recognised stock exchange.
-- The Subscription agreement contains terms governing the
relationship between Eco Atlantic and AOC to provide certain
safeguards to ensure, inter alia, that for so long as AOC and its
associates together are entitled to exercise or control the
exercise of 17.5 per cent. or more of the issued share capital of
the Company, Eco Atlantic is capable of carrying on its business
independently of AOC as a substantial shareholder.
-- The Subscription Shares are subject to a standard 4 month and
1 day lock in from the date of the Subscription.
Concurrent with the completion of the Subscription, Eco Atlantic
and AOC have entered into a Strategic Alliance Agreement pursuant
to which:
-- AOC will be entitled to bid jointly on any new assets or
ventures proposed to be acquired by Eco Atlantic on the same terms
as the Company and for an interest at least equal to its percentage
holding of the common shares in Eco Atlantic from time to time.
-- AOC will be entitled to participate in any ongoing licence
applications or acquisition processes, on reasonable commercial
terms to be agreed by the parties acting in good faith, for an
interest at least equal to its percentage holding of the common
shares in Eco Atlantic from time to time.
-- AOC will be entitled to a right of first offer in respect of
any asset for which Eco Atlantic seeks to farm out an interest.
Advisers
Pareto Securities, Strand Hanson Limited and Brandon Hill
Capital acted as financial advisors to the Company on this
transaction.
For more information, please visit www.ecooilandgas.com or
contact the following:
Eco Atlantic Oil and Gas +1 (416) 250 1955
Gil Holzman, CEO
Colin Kinley, COO
Alan Friedman, VP
Strand Hanson Limited (Financial +44 (0) 20 7409
& Nominated Adviser) 3494
James Harris
Rory Murphy
James Bellman
Brandon Hill Capital Limited +44 (0) 20 3463
(Broker) 5000
Oliver Stansfield
Jonathan Evans
Robert Beenstock
+44 (0) 20 7138
Blytheweigh (PR) 3204
Nick Elwes
Tim Blythe
Notes to editors
Eco Atlantic is a TSX-V and AIM listed oil and gas exploration
and production Company with interests in Guyana and Namibia where
significant oil discoveries have been made.
The Group aims to deliver material value for its stakeholders
through oil exploration, appraisal and development activities in
stable emerging markets, in partnership with major oil companies,
including Tullow and AziNam.
In Guyana, Eco Guyana holds a 40 per cent working interest
alongside Tullow Oil (60 per cent) in the 1,800 km(2) Orinduik
Block in the shallow water of the prospective Suriname Guyana
basin. The Orinduik Block is adjacent and updip to the deep-water
Liza Field, recently discovered by ExxonMobil and Hess, which is
estimated to contain as much as 2.5 billion barrels of oil
equivalent, making it one of a handful of billion-barrel
discoveries in the last half-decade.
In Namibia, the Company holds interests in four offshore
petroleum licences totaling approximately 25,000 km(2) with over
2.3 billion barrels of prospective P50 resources in the Wallis and
Lüderitz Basins. These four licences, Cooper, Guy, Sharon and Tamar
are being developed alongside partners, which include Tullow Oil,
AziNam and NAMCOR. Significant 3D and 2D surveys and interpretation
have been completed with drilling preparations expected to begin in
2018.
Africa Oil Corp is Africa Oil Corp. is a Canadian oil and gas
company with assets in Kenya and Ethiopia. The Company is listed on
the Toronto Stock Exchange and on Nasdaq Stockholm under the symbol
"AOI".
http://www.africaoilcorp.com
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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