Proposed Acquisition and Notice of General Meeting

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

18 December 2017

Echo Energy plc

("Echo" or the "Company")

 

Proposed acquisition of interests in oil and gas assets in Argentina

 

Placing of 36,391,412 Ordinary Shares at 17.5 pence per Ordinary Share

 

Intended Open Offer of up to 11,428,572 new Ordinary Shares at 17.5 pence per Ordinary Share

 

Admission of Enlarged Share Capital to trading on AIM

 

Notice of General Meeting

 

Echo Energy plc, the South and Central American focused upstream gas company, is pleased to announce that an admission document detailing the proposed farm-in to 50 per cent. interests in each of the Fracción C, Fracción D and Laguna De Los Capones concessions (the "Concessions") and to a 50 per cent. interest in the Tapi Aike exploration permit (the "Exploration Permit"), each located onshore in Argentina (the "Transaction") has been published and posted to Shareholders. The admission document contains a notice convening a general meeting of the Company for 2.00 p.m. on 3 January 2018 at the offices of Link Asset Services, 65 Gresham Street, London EC2V 7NQ. The admission document includes a Competent Person's Report on the Company's proposed new assets. 

 

The Company expects that trading in the Company's Ordinary Shares on AIM will resume at 8.00 a.m. today.

 

Highlights:

 

·      The Company announced on 1 November 2017 that, in line with its stated strategy, it had entered into a conditional farm-in agreement with Compañía General de Combustibles S.A. ("CGC") for the acquisition by the Company of 50 per cent. working interests in certain of the onshore Argentinian gas and oil assets of CGC.

 

·      Echo is to acquire 50 per cent. working interests in each of the Fracción C, Fracción D and Laguna De Los Capones Concessions and in the Tapi Aike Exploration Permit each located in the Austral basin of Santa Cruz province, onshore Argentina, and covering a total of 11,153km².

 

·      The Acquisition is expected to provide the Company with a compelling blend of multi tcf exploration potential, appraisal and production.

 

·      On the Tapi Aike Exploration Permit the Competent Person's Report has identified 41 leads over three independent plays, each typically with gross (100%) prospective resources of 50-600 Bcf at the best estimate level; the largest two are assessed as potentially containing 3.8 Tcf and 2.6 Tcf of gas in place (on a gross unrisked basis) in the high case, with three others potentially containing in excess of 1 Tcf (on the same basis), all of these numbers confirming the highly prospective value of the Tapi Aike Exploration Permit. 

 

·      Existing gross production of a total of approximately 11.2 mmscfe/d (5.6 mmscfe/d net to the Company, pre-royalty) on Fracción C and Fracción D with, the Directors believe, the potential to significantly increase current gross production across the Concessions to over 80 mmscfe/d over a five year period.

 

·      The Acquisition will provide the Company with a material position in Argentina, with strong local gas prices, and a well-respected local strategic partner.

 

·      Completion of the Acquisition is conditional, inter alia, on the passing of Resolution 1 at the General Meeting.

 

·      The Company has conditionally raised £6.4 million, before expenses (£4.7 million net of total estimated costs and expenses relating to both the Placing and Admission) through the Placing of 36,391,412 Placing Shares at 17.5 pence per Placing Share, being equal to the closing mid-market price per Ordinary Share on 27 October 2017, being the last date prior to the Ordinary Shares being suspended from trading on AIM pending publication of the admission document.

 

·      The Placing Shares will represent approximately 9.1 per cent. of the Enlarged Share Capital on Admission.

 

·      Following Admission, Echo intends to deploy the Company's existing cash balances and net proceeds of the Placing towards the development of the Licences, and towards the Company's working capital requirements.

 

·      The Company is grateful for the support of all its Shareholders and therefore intends to undertake an Open Offer in January 2018 of up to 11,428,572 Offer Shares at 17.5 pence per Offer Share to raise up to £2.0 million, before expenses.  This is intended to provide qualifying shareholders with the opportunity to subscribe for additional Ordinary Shares at the same price as was available under the Placing.

 

Commenting on the Acquisition Echo's Chief Executive Officer, Fiona MacAulay, said:

 

"This Transaction will give the Company a material Argentinian position and I am delighted to announce the publication of our AIM admission document and a fundraise at a price equal to the mid-market price prior to suspension in trading. Trading in the Company's ordinary shares is expected to recommence today, with the Transaction expected to complete, subject to shareholder approval, in January. We are delighted to resume trading so quickly ."

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

 

For further information please contact:

 

Echo Energy plc Fiona MacAulay, CEO Will Holland, CFO	[email protected] [email protected]
Smith & Williamson  (Nominated Adviser) Azhic Basirov David Jones Ben Jeynes Katy Birkin	+44 (0)20 7131 4000
Hannam & Partners (Advisory) LLP (Co-ordinating Bookrunner and Joint Broker) Giles Fitzpatrick Andrew Chubb Ernest Bell	+44 (0)20 7907 8500
Shore Capital Stockbrokers Limited (Co-ordinating Bookrunner and Joint Broker) Jerry Keen Hugh Morgan Anita Ghanekar	+44 (0)20 7408 4090
Vigo Communications (PR Adviser) Patrick d'Ancona Chris McMahon Ali Roper	+44 (0)20 7830 9700

 

Defined terms used in this announcement have the same meaning as set out in the Company's admission document dated 15 December 2017.

 

For further information, information provided under AIM Rule 26 and the Company's admission document please see the Company's website: www.echoenergyplc.com.

 

 

Introduction

 

On 1 November 2017, the Board of Echo Energy announced that the Company had entered into a conditional farm-in agreement with Compañía General de Combustibles S.A. ("CGC"), a privately-owned affiliate of the Argentinian conglomerate Corporación América International, for the acquisition by Echo of a 50 per cent. working interest in each of the Fracción C, Fracción D and Laguna De Los Capones Concessions and the Tapi Aike Exploration Permit, located onshore in Argentina.

 

The Licences are located in the Austral basin (also known as the Magallanes basin) in the Santa Cruz province of southern Argentina and cover an aggregate of 11,153km². The Acquisition is expected to provide the Company with a compelling blend of multi tcf exploration potential, appraisal and production of both oil and gas.

 

The Company's existing cash balances and the net proceeds of the Placing will be applied towards the Acquisition and initial work programme across the Licences.

 

The Company has conditionally raised £6.4 million through the issue of a total of 36,391,412 new Ordinary Shares pursuant to the Placing at 17.5 pence per Placing Share. The Placing Price is equal to the closing mid-market price per Existing Ordinary Share of 17.5 pence on 27 October 2017 being the last date prior to the Existing Ordinary Shares being suspended from trading on AIM pending publication of the admission document. In addition, the Company is intending to launch an Open Offer in January 2018 to raise up to a further £2.0 million (gross) through the issue of an aggregate of up to 11,428,572 new Ordinary Shares at the Placing Price.

 

At the Placing Price on Admission, Echo will be valued at approximately £70.2 million.

 

In view of the size of the Farm-In relative to the Company, in aggregation with the changes to the business since March 2017, the Acquisition constitutes a reverse takeover of Echo under Rule 14 of the AIM Rules for Companies and accordingly the Existing Ordinary Shares were suspended from trading on AIM on 30 October 2017 pending publication of the admission document. Trading in the Existing Ordinary Shares is expected to be restored following publication of the admission document.

 

Under the AIM Rules, the Acquisition requires the prior approval of a majority of Shareholders voting on an ordinary resolution to be put to Shareholders at a General Meeting, notice of which is set out at the end of the admission document.

 

If Resolution 1 to approve the Acquisition is duly passed at the General Meeting, the Company's existing quotation on AIM will be cancelled and the Company will apply for the Enlarged Share Capital to be readmitted to trading on AIM.

 

The issue of the Placing Shares is conditional on, inter alia, the passing of Resolution 1 at the General Meeting.

 

Application will be made for the Placing Shares to be admitted to trading on AIM, subject to the passing of Resolution 1. It is expected that Admission will take place, and dealings in the Placing Shares will commence on AIM, on 4 January 2018.

 

Background to, and reasons for, the Acquisition

 

On 18 April 2017, Shareholders approved, inter alia, a change of the Company's name to 'Echo Energy plc' and the Company announced its intention to pursue a South and Central American regional exploration and production strategy.

 

The Company is pursuing this strategy focussed on low cost, onshore gas piped to high value, growing markets - with the intention of identifying, acquiring and developing exploration, development, appraisal and/or producing oil and gas assets in South and Central America. The Directors consider the Acquisition to be in accordance with such strategy.

 

The Directors expect the Acquisition to deliver:

 

·      A material position in Argentina with a well-respected local strategic partner.

·      Existing gross production of a total of approximately 11.2 mmscfe/d (net production of 5.6 mmscfe/d or 1000boe/d, pre-royalty) on the Fracción C and Fracción D Concessions, with, the Directors believe, potential to significantly increase current gross production across the Concessions to over 80 mmscfe/d (net production of 40 mmscfe/d) over a five year period, underpinned by strong local Argentinian gas prices.

·      Combined net 2P and net 2C (pre-royalty) reserves and resources of 39.2 bcfe (7.0 mmboe) with an NPV10 of US$49.4 million on an unrisked post tax basis.

·      Access to multi Tcf exploration potential on the Tapi Aike Exploration Permit where 41 leads across three independent plays have been identified, each typically with gross (100%) prospective resources of 50-600 Bcf at the best estimate level; the largest two are assessed as potentially containing 3.8 Tcf and 2.6 Tcf of gas in place (on a gross unrisked basis) in the high case, with three others potentially containing in excess of 1 Tcf (on the same basis).

·      Access to significant exploration and appraisal potential across the Fracción C and Fracción D Concessions with multiple drill ready prospects identified and evaluated in the Competent Persons Report.

·      First operations under the Initial Term work programme on the Concessions in Q1 2018, followed by an active drilling and operational work programme across the Licences.

·      Technical operatorship by the Company of the Concessions.

 

Principal terms of the Acquisition Agreements

 

Pursuant to the Acquisition Agreements and subject to Shareholder approval of the Acquisition at the General Meeting, the Company has agreed to farm-in to 50 per cent. working interests in the Licences on the following terms.

 

Fracción C, Fracción D and Laguna De Los Capones Concessions

 

Fracción C, which surrounds the Laguna De Los Capones Concession, covers an area of 5,288km² and includes 3 existing production facilities and a gas export pipeline connecting directly to the main pipeline to Buenos Aires operated by Transportadora de Gas del Sur S.A. The Laguna De Los Capones Concession covers an area of just under 400km². These two Concession areas benefit from 1,192km² of existing 3D seismic, extensive legacy 2D seismic coverage and existing gross production of 10.8 mmscfe/d.

 

Fracción D is a 280km² Concession with existing production facilities and a small initial level of production. The Company has identified significant development, appraisal and exploration potential within the Fracción D Concession.

 

The area has a proven gas cap already penetrated by a number of wells. The work programme agreed in the CDL Farmout Agreement is designed to explore, appraise and bring into production these resources, utilising existing production facilities and a new 28km pipeline to the gas metering point.

 

A combined net total of 39.2 bcfe (7.0 mmboe) of 2P reserves and 2C contingent resources are mapped across the Concessions with an NPV10 of US$49.4 million on an unrisked post tax basis.

 

In addition, thirteen exploration prospects within the Concessions  (excluding the Fracción D gas cap)   are reported on in the CPR included in the admission document with a total EMV10 of US$69.2 million. These are all considered to have a reasonable chance of success and the unrisked NPV10 figures within the CPR range between US$2 million and US$70 million on a post tax basis net to Echo

 

All discoveries across the Concessions are expected to be capable of being brought on stream rapidly and with low incremental costs due to the proximity to existing infrastructure.

 

The consideration payable under the CDL Farmout Agreement for the acquisition by Echo of the CDL Participation Interest and the TA Participation Interest comprises the following elements:

 

·      US$2.5 million cash which was paid on signature of the CDL Farmout Agreement in November 2017.

 

·      Echo to meet 100 per cent. of the costs of the works agreed to be undertaken in the Initial Term across the Concessions anticipated to run for approximately 18 months (the carry by Echo of CGC's 50 per cent. working interest on the agreed work programme across the Concessions estimated by the Company to be between US$9 million and US$12 million) which will include:

 

-      reprocessing and analysis of existing Laguna De Los Capones 3D seismic;

-      acquisition of c.500km² of 3D seismic on Fracción C;

-      drilling and testing of 4 exploration wells on Fracción C and the completion of each of those wells as producing wells in the event of drilling success in each case;

-      workover of 3 existing wells on Fracción D;

-      drilling, testing and completion (or abandonment) of 1 new well in Fracción D, contingent on satisfactory results arising from the Fracción D workovers; and

-      acquisition of c.230km² of 3D seismic on Fracción D, subject to satisfactory results arising from the workovers and/or contingent development well described above. This requirement to acquire additional 3D seismic may be transferred to Fracción C

 

·      A deferred cash payment of US$2.5 million on completion of the Initial Term on the Concessions.

 

After the completion of the Initial Term on the Concessions, the Company has the option to progress to the Second Term on the Concessions for which a provisional work programme has been envisaged, including expanding the total seismic acquisition across the Concessions (including that acquired in the Initial Term) to 2,000km² and drilling a further 8 exploration wells across the Concessions.

 

On election by the Company to progress to the Second Term on the Concessions, the total carry of CGC's interests in the Concessions by Echo (including all expenditure during the Initial Term) would be capped at a total of US$35 million and during the Second Term a further deferred consideration payment of US$5 million would be payable by Echo which may, at the election of the Company and in certain circumstances be contributed as part of CGC's share towards additional investments.

 

CGC and the Company will enter into a joint operating agreement on completion of the Acquisition with Echo being appointed as technical operator of Fracción C, Fracción D and Laguna De Los Capones.

 

The main terms of the Concessions are as follows:

 

	Date of grant of extension	Date of expiry of extension	Relinquishment Obligations	Rights	Work Programme Obligations	Other Obligations
Fracción C	22 November 2016	13 November 2027	Fracción C and Fracción D Concessions required to be relinquished if, by 30 June 2020, the relevant Concession does not have an audited reserves to production ratio of 4 years taking into account the cumulative production of the last 12 months preceding this date. Exploration acreage to be relinquished if exploration work at a rate of 1 Work Unit (US$ 5000) per year per km2 is not maintained throughout the term of the Concessions	Exclusive right to produce hydrocarbons from the area specified by the Concessions Right to build pipelines and infrastructure to treat, transport and market hydrocarbons production	Development work programme requirement of US$14.5 million from 2016 to 2020 in CGC's 7 concessions held (including the Concessions) Exploration work in the exploration acreage of one work unit (US$5,000) per year for every km2 of exploration acreage	Incurring and paying opex expenditure of an average amount of US$13.2 million per year for the Concessions
Fracción D	22 November 2016	13 November 2027
Laguna De Los Capones	22 November 2016	18 April 2026

 

Tapi Aike

 

The Exploration Permit is one of the largest onshore blocks in Argentina, covering an area of 5,187km² in the foothills of the Andes Mountains, south west of the Concessions. The Exploration Permit benefits from 3,400km of legacy 2D seismic and a total of 14 wells have been drilled in Tapi Aike over the last 45 years, mostly in the eastern part of the licence and targeting the conventional Springhill/Tobifera play. Although no commercial discovery has yet been made, there have been encouraging signs of the presence of gas. Some 41 leads have been identified across three independent plays, although 3D seismic acquisition is required before any of them will be considered ready for drilling. Each lead has typically with gross (100%) prospective resources of 50-600 Bcf at the best estimate level; the largest two are assessed as potentially containing 3.8 Tcf and 2.6 Tcf of gas in place (on a gross unrisked basis) in the high case, with three others potentially containing in excess of 1 Tcf (on the same basis).

 

The consideration payable by the Company to CGC for the acquisition of the TA Participation Interest does not include any upfront cash consideration. Instead, Echo has agreed under the TA Farmout Agreement to carry CGC for 15 per cent. of the total committed work programme costs (total of 65 per cent. of costs attributable to Echo) during the first phase of the Exploration Permit period of 3 years (4 years in the event of tight gas classification).

 

The work programme over that period comprises reprocessing of selected existing 2D seismic, acquisition and processing of 1,200km² of 3D seismic and the drilling of 4 exploration wells. Echo's 15 per cent. Carry of CGC for the work programme is anticipated to be between US$9 million and US$12 million (with anticipated gross work programme costs in the order of US$60 million).

 

The Exploration Permit work programme in the first two years following completion of the TA Farmout Agreement is anticipated to comprise 2D seismic re-processing, 3D seismic acquisition planning and the initiation of 3D seismic acquisition.

 

The main terms of the Exploration Permit are as follows:

 

	Date of grant	Date of expiry	Relinquishment Obligations	Rights	Work Programme Obligations	Other Obligations
Tapi Aike	8 September 2017	8 September 2020	At the end of the first exploration period or second optional exploration period	Exclusive right to perform all operations relating to the search of hydrocarbons from the area specified by the Exploration Permit Entitlement to obtain an exclusive 25 year concession for the exploitation of any discovery of hydrocarbons in the area specified by the Exploration Permit	Exploration work programme of 15,280 work units (approximately US$5,000 per work unit and US$76.4 million in total based on the Argentinian government's current tariffs in respect of hydrocarbon exploration work) during the term	Signature bonus of AR$12,000,000

 

Should the Acquisition not be completed by 2 February 2018 or a subsequent date which the parties may mutually agree, the Acquisition Agreement will lapse uncompleted and the initial US$2.5 million consideration payment in relation to the CDL Farmout Agreement will not be refundable, other than to the extent of US$0.5 million in certain limited circumstances.

 

In the event that the Company fails to obtain Shareholder approval for the Acquisition and fails to satisfy the other conditions in the CDL Farmout Agreement, a further sum of US$2.5 million will become payable by the Company to CGC. This additional US$2.5 million payment would be made by the Company from existing cash balances and would be refundable only in certain limited circumstances.

 

If the Company fails to obtain Shareholder approval for the Acquisition and fails to satisfy the other conditions in the TA Farmout Agreement, the TA Farmout Agreement shall terminate.

 

Completion of the Acquisition is conditional, inter alia, on the passing of Resolution 1 at the General Meeting. At the time of Completion, it is anticipated that not all of the consents required for the transfer of the participating interests in the Licences to the Company will have been obtained. It is anticipated that these consents, further details of which are contained in paragraphs 13.1 and 13.2 of Part VI of the admission document, will be obtained within six months following completion of the Acquisition. Should any of the consents not be obtained, then the Company will be granted an economic interest in the Licences until such time as the Company can obtain full legal title.

 

Information on the Licences

 

Overview

Exploration for hydrocarbons in the Concession areas began in the 1960s. On the basis of 2D seismic, five oil and gas fields were discovered in Fracción C, Laguna De Los Capones and Fracción D, although all five are now mature and only a few wells remain in production. A further discovery was recently made in 2015 at Laguna de Maria in Fracción C, and the discovery well is currently in production.

Reserves are attributed to continued production from the currently producing wells. Proved plus probable (2P) reserves net to a 50 per cent. working interest amount to 0.51 mmbbl of oil and 6.3 bcf of gas after deduction of the royalty (0.60 mmbbl and 7.5 bcf pre-royalty).

The potential exists to further develop the Laguna de Maria discovery at Fracción C and an earlier discovery adjacent to the Estancia La Maggie field, within Fracción C that has never been developed. There is also the possibility of monetising gas from Fracción D, which until now has had no export route; the Cañadon Salto field contains a gas cap, and there is a gas discovery below the main oil producing reservoir. However, a pipeline would need to be constructed to link the field with the existing San Martin pipeline some 28 km to the west, and it is likely that prior to sanctioning the pipeline, additional discoveries in Fracción D would be required.

Contingent resources are attributed to these potential projects. 2C contingent resources net to a 50 per cent. working interest amount to 0.57 mmbbl of oil and 20.9 bcf of gas after deduction of royalty (0.67 mmbbl and 24.5 bcf pre-royalty).

Thirteen exploration prospects have been identified and reported on in the CPR within Fracción C, Laguna De Los Capones and Fracción D, five of which contain two separate reservoir targets. Five prospects (all in Fracción C) are oil prospects, the remainder gas with condensate. These are all considered to have a reasonable chance of success, given the proximity to existing fields and the fact that a significant part of Fracción C and Laguna De Los Capones is now covered with 3D seismic. Prospective resources attributed to individual prospects at the gross (100 per cent.) level are typically 10-20 bcf or 1-11 mmbbl at the best estimate level, while the dry hole cost of an exploration well is in the order of US$2 million.

In contrast to the relatively mature Fracción C, Laguna De Los Capones and Fracción D, Tapi Aike is still at the exploration stage. It is one of the biggest onshore exploration blocks in Argentina, covering an area of 5,187km² in the foothills of the Andes Mountains. There is a legacy 2D seismic grid over a large part of the area (3,400km²), which is of reasonable quality but has a wide line spacing (average 4 km). Over the last 45 years, 14 wells have been drilled in Tapi Aike; mostly in the eastern part of the licence and targeting the Springhill/Tobífera play established in Fracción C, Laguna De Los Capones and Fracción D; none has made a commercial discovery, but there have been encouraging signs of the presence of gas, including a reported blow-out and a 120m interval that logged gas but which did not flow on test.

A large number of leads have been identified in Tapi Aike at depths ranging from 1,300m to 4,100m below ground level. All are being evaluated as dry gas leads. There are a number of potential play types, different from those in Fracción C, Laguna De Los Capones and Fracción D, and individual leads are much larger, typically with gross (100 per cent.) prospective resources of 50-600 bcf at the best estimate level, though also of significantly higher risk at this stage of their evaluation. Consistent with the definition of a lead, more work is needed before any of these will be considered ready for drilling, and acquisition of 3D seismic is planned as the next step.

Exploitation History

Fracción C and Laguna De Los Capones

Exploration for hydrocarbons in the Concession areas began in the 1960s. On the basis of 2D seismic data acquired at that time, three hydrocarbon fields were discovered within Fracción C:

·      Campo Bola: discovered in 1967, currently (July 2017) producing approximately 5.8 mmscf/d gas and 112 bopd;

·      Ototel Aike: discovered in 1976, now shut-in; and

·      Estancia La Maggie: discovered in 1988 and currently producing approximately 590 bopd.

 

Approximately 60 exploration and development wells were drilled in Fracción C up to the mid-1990s on the 2D seismic data.

The first 3D seismic data was acquired in 1995 and there are now several areas of 3D coverage, although most of the area remains under-explored with only a poor quality 2D seismic grid. It is known from elsewhere in the basin that 3D is important to define the geometry of the reservoirs.

In 2015, a discovery was made in the Tobífera Formation at Laguna de Maria, in a well originally targeting the Springhill play. The discovery well currently produces approximately 63 bopd, with production being trucked to the existing processing facilities.

Contained entirely within Fracción C, Laguna De Los Capones is a separate concession containing one field of the same name, an oil field discovered in 1977 but which is no longer producing.

Fracción D

Fracción D lies south east of Fracción C and is similarly covered by a network of 2D seismic data. It contains the Cañadon Salto oil and gas field.

Discovered in 1979, Cañadon Salto covers an area of 51.1km². The reservoir is the Springhill formation, at a depth of approximately 1,300m below ground level. There are more than 100 wells in the field, which has produced 8.2 mmbbl, but currently the field produces only 25 bopd and 0.25 mmscf/d gas from two active wells. A water injection project was conducted for a period in the 1990s, with good results. Gas has historically been used for fuel or flared, as the field lies some 28km from the nearest gas pipeline (San Martin).

Tapi Aike

The Exploration Permit is one of the biggest onshore exploration blocks in Argentina, covering an area of 5,187km², and was obtained by CGC in the last bid round in August 2017. It is located in the foothills of the Andes Mountains, south west of Fracción C, Fracción D and Laguna De Los Capones. Most of the area (3,400 km²) is covered by a legacy 2D seismic grid, which is of reasonable quality but has a wide line spacing.

Over the last 45 years, 14 wells have been drilled in Tapi Aike, mostly targeting the Springhill formation in the east of the licence. There have been no commercial discoveries, but there have been encouraging signs of the presence of gas:

·      The TA.X-1 well, drilled by YPF in 1974 drilled to a TD of 3,406m, detected high pressure gas and was abandoned due to technical issues; the rig was moved 30m and a second well-bore (TA.X-1 bis) was drilled to 1,871m before being abandoned due to a pressure blowout. The two well-bores are reported to have communicated during drilling.

 

·      The Cancha Carrera well, CC.es-1, drilled by YPF in 1973, logged gas over 120m in two 60m sandstone intervals in the Cerro Torro Formation at a depth of approximately 2,600m, but failed to flow when tested.

 

·      The TA.x-1001 well, drilled in 1994 by Perez Companc to a TD of 3,491m, logged gas in the Cerro Cazador formation but was abandoned after failing to produce any gas after a small hydraulic fracture treatment.

 

Gas was also encountered in the Ea.Ch.SO.x-1 well drilled in an analogue setting to the lobes leads (Lower Magallanes lobes, etc.) in the neighbouring, CGC-operated, Estancia Chiripa block.

 

Group Reserves and Contingent Resources Summary

The following table sets out the total reserves and contingent resources of the Fracción C, Fracción D, and Laguna De Los Capones Concessions, which together with Tapi Aike will constitute the material assets of the Group on Admission, as further detailed in tables AIII.1 and AIII.2 of the CPR:

	Gross Field			Net to 50% Working Interest
				Pre-Royalty			Post-Royalty
	Proved	Proved + Probable	Proved + Probable + Possible	Proved	Proved + Probable	Proved + Probable + Possible	Proved	Proved + Probable	Proved + Probable + Possible
Reserves - Oil (mmbbl)	1.10	1.21	1.30	0.55	0.60	0.65	0.47	0.51	0.55
Reserves - Gas (bscf)	13.1	14.9	15.8	6.5	7.5	7.9	5.6	6.3	6.7
Contingent Resources - Oil and Condensate (mmbbl)	0.60	1.35	3.01	0.30	0.67	1.50	0.25	0.57	1.28
Contingent Resources -  Gas (bscf)	21.4	49.1	110.7	10.7	24.5	55.4	9.1	20.9	47.1

 

Additionally, the CPR reports on prospective resources associated with the CGC Assets as detailed in tables AIII:3 and AIII:4 of the CPR.

Information on CGC

CGC is an independent energy company operating in Argentina that engages in the exploration, development and production of hydrocarbons, including natural gas, crude oil and, to a lesser extent, upstream liquid natural gas. CGC has a portfolio of 40 oil and gas fields in Argentina, with substantially all of the exploration and production activities focused onshore across the Austral basin in the province of Santa Cruz in the southern part of the country.

 

Founded in 1920 as a fuel oil and diesel transportation and commercialisation company, CGC holds direct interests in and operates approximately 23 oil and gas fields across eight areas in the Austral basin. In addition, CGC holds direct and indirect interests in a further 17 oil and gas fields in five additional areas in the Neuquina, Noroeste and Golfo de San Jorge basins in Argentina. CGC's licence areas in Argentina cover an aggregate of a gross 24,888km² (net area of 20,882km²), with CGC's licence areas in Santa Cruz I Oeste in the Austral basin comprising the majority of CGC's production and reserves, and constituting its core areas of activity and ongoing focus.

 

In addition to CGC's upstream business, CGC has interests in a network of pipelines in northern and central Argentina, with stakes in the Transportadora de Gas del Norte (TGN), which is the largest natural gas pipeline system in the country in terms of capacity according to the Argentinian national regulator of gas (ENARGAS), Gasoducto GasAndes (GasAndes) and Transportadora de Gas del Mercosur (TGM) pipeline systems.

 

For the fiscal year ending 31 December 2016, CGC reported revenues of US$3.5 million, gross profit of US$0.8 million and a net loss of US$0.2 million.

 

CGC's controlling shareholder, Latin Exploration S.L.U., is beneficially owned by the Southern Cone Foundation, which also controls the conglomerate known as Corporación América. Corporación América has interests in airport, agribusiness, energy, infrastructure, services and technology companies in ten countries and had revenues of approximately US$1.4 billion and a workforce of approximately 12,300.

 

Directors and Senior Management

 

The Board comprises one executive director and three non-executive directors. It is the intention of the Board to appoint an additional non-executive director in the 12 months following Admission.

 

Directors

 

James Parsons, age 45, Non-executive Chairman

James Parsons has over 20 years' experience in the fields of strategy, management, finance and corporate development in the energy industry. James is Chief Executive Officer of AIM quoted Sound Energy plc, an African and Mediterranean focussed upstream gas company and non-executive chairman of Saffron Energy plc. James started his career with the Royal Dutch Shell group in 1994 and spent 12 years with Shell working in Brazil, the Dominican Republic, Scandinavia, the Netherlands and London. Leading up to 2006, when he left Shell to join Inter Pipeline Fund, a Toronto-listed resources business, James held various positions in Shell's exploration and production business, latterly as Vice President, Finance, of New Business. James is a qualified accountant and has a BA Honours in Business Economics.

 

Fiona Margaret Barkham (professional name: MacAulay, former names: MacAulay and Oxley), age 54, Chief Executive Officer

Fiona MacAulay has over 30 years' experience in the oil and gas industry, most recently as Chief Operating Officer and Technical Director of AIM quoted Rockhopper Exploration plc. Fiona, a Chartered Geologist, started her career with Mobil North Sea Limited in 1985 and has subsequently held senior roles in a number of leading oil and gas firms, including Amerada Hess and BG Group. Fiona is a non-executive director of Saffron Energy plc. Fiona is the European President of the American Association of Petroleum Geologists.

 

Marco Fumagalli, age 47, Non-Executive Director

Marco Fumagalli is Founding Partner at Continental Investment Partners SA, a Swiss-based fund and a significant shareholder of AIM quoted Sound Energy plc. Marco is a well-known Italian businessman who was previously a Group Partner at 3i and is a non-executive director of AIM quoted Sound Energy plc and Saffron Energy plc. Marco is a qualified accountant and holds a degree in Business Administration from the University "Bocconi" of Milan.

 

Stephen James Whyte, age 51, Non-Executive Director

Stephen Whyte has over 25 years' experience in the oil and gas industry. He was Chief Operating Officer and Executive Director for Exploration and Production at Galp Energia for three years until 2014, having previously spent three years as Senior Vice President Commercial at BG Group. Stephen previously spent a total of 14 years with Shell and six years with Clyde Petroleum. Stephen was formerly Shell's Country Chairman in Brazil and speaks Portuguese. Stephen is non-executive chairman of Sound Energy plc and non-executive chairman of General Energy plc.

 

Senior Management

 

William Peter Holland, age 45, Chief Financial Officer

Will Holland has more than 20 years' operational experience in the upstream oil and gas industry. Originally with a technical background, Will has spent the majority of his career in commercial, financial and corporate development roles with the likes of Halliburton and Macquarie and has significant experience in corporate acquisitions, founding and growing small cap exploration and production companies. Throughout his career Will has worked deals across Latin America. Will has an engineering degree from Warwick University and an MBA from Heriot Watt University.

 

Dr. Julian Lindsay Bessa, age 49, Vice President of Exploration

Julian Bessa is a geologist with over 20 years' exploration experience across South America, including at BG Group where he spent time as Bolivian Exploration Manager and as Vice President Exploration Brazil. Julian is a Fellow of the Geological Society and a Member of the Petroleum Exploration Society of Great Britain. Julian holds a D.Phil from the University of Oxford and an MBA from the Rotterdam School of Management.

 

Andres Fernando Brockmann Rojas, age 38, Country Representative

Andres Brockmann is a Bolivian national and has held a number of senior executive roles in Bolivia and internationally, including 15 years' experience with Petrobras. Andres is a Production Engineer, a director of the Bolivian Chamber of Hydrocarbons and Energy and has an MBA from The Wharton School of the University of Pennsylvania.

 

Details of the Placing and Use of Proceeds

 

The Company has conditionally raised £6.4 million, before expenses (£4.7 million net of total estimated costs and expenses relating to both the Placing and Admission) through the Placing being undertaken directly by the Company with certain investors and through Hannam and Shore Capital of in aggregate 36,391,412 Placing Shares at 17.5 pence per Placing Share from certain existing and new investors.

 

The Placing Price is equal to the closing mid-market price per Existing Ordinary Share of 17.5 pence on 27 October 2017 being the date prior to when the Existing Ordinary Shares were suspended from trading on AIM pending publication of the admission document. The Placing Shares will represent approximately 9.1 per cent. of the Enlarged Share Capital on Admission. The Placing is not underwritten or guaranteed.

 

On 15 December 2017, the Company, the Directors, Hannam, Shore Capital and Smith & Williamson entered into the Placing Agreement pursuant to which Hannam and Shore Capital agreed, subject to certain conditions, to use their reasonable endeavours to procure subscribers for 25,662,846 of the Placing Shares pursuant to the Placing.

 

The issue of the Placing Shares is conditional, inter alia, upon:

 

(i)            Resolution 1 to be proposed at the General Meeting being passed without amendment;

 

(ii)           compliance by the Company with its obligations under the Placing Agreement;

 

(iii)         Completion of the Acquisition; and

 

(iv)          Admission becoming effective by not later than 8.00 a.m. on 4 January 2018.

 

Under the Placing Agreement, which may be terminated by Hannam, Shore Capital and Smith & Williamson in certain circumstances (including force majeure) prior to Admission, the Company and the Directors have given certain warranties and indemnities to Hannam Shore Capital and Smith & Williamson concerning, inter alia, the accuracy of the information contained in the admission document.

 

The Company has also entered into certain subscription agreements with investors in respect of 10,728,566 Placing Shares at the Placing Price.

 

Use of proceeds

 

Together with the Company's existing cash balances as at 31 October 2017 of £22.2 million, the net proceeds of the Placing will be applied towards the Acquisition consideration, the immediate work programme for the Licences and the working capital requirements of the Group, as follows:

 

 

Initial Licence expenditure in relation to:	£ million	$ million
Concession work programme	14.4	19.3
Tapi Aike work programme	3.5	4.7
Concession acquisition consideration (1)	3.7	5.0
Working capital	5.3	7.0
Total	26.9	36.0
Cash balances as at 31 October 2017	22.2	29.7
Net proceeds of the Placing	4.7	6.3

 

 

The Open Offer

 

The Company is grateful for the support of all of its Shareholders. The Company therefore intends to launch an Open Offer of up to 11,428,572 Open Offer Shares at the Placing Price of 17.5 pence per Offer Share in January 2018. Should the Offer be fully subscribed, the Offer Shares would amount to 2.9 per cent. of the Enlarged Share Capital. It is intended that qualifying Shareholders on the register in early January 2018 would be entitled to subscribe for, in aggregate, a maximum of 11,428,572 new Ordinary Shares. A circular containing full details of the Open Offer is intended to be posted to Shareholders in January 2018.

 

Lock-in and Orderly Market Arrangements

 

The Board's aggregate interests in Ordinary Shares following Admission will amount to 40,261,631 Ordinary Shares, representing approximately 11.04 per cent. of the Existing Ordinary Shares and 10.04 per cent. of the Enlarged Share Capital. On Admission the Directors will also hold Options over a further 56,000,000 Ordinary Shares and Marco Fumagalli will be interested in Warrants held by Greenberry over a further 30,653,292 Ordinary Shares.

 

The Directors and Greenberry (being a related party of the Company as defined by the AIM Rules) have undertaken, in respect of themselves and each of their connected persons, save in limited circumstances, not to dispose of any of their interests in Ordinary Shares held at Admission (and any further interests in Ordinary Shares they may acquire after such time), Options or Warrants at any time prior to the first anniversary of Admission.

 

In order to ensure an orderly market in the Ordinary Shares the Directors and Greenberry have further undertaken that for a further period of 12 months thereafter they will not (subject to certain limited exceptions) deal or otherwise dispose of any such interests through the Company's broker and after having given notice to Smith & Williamson.

 

General Meeting

 

A notice convening a General Meeting of the Company, to be held at 2.00 p.m. on 3 January 2018 at the offices of Link Asset Services, 65 Gresham Street, London EC2V 7NQ, has been sent to Shareholders.  At that meeting a resolution will be proposed, inter alia, in order to obtain Shareholder approval for the Acquisition.

 

The issue of the Placing Shares and completion of the Acquisition are conditional upon, among other things, Shareholders passing Resolution 1 being proposed at the General Meeting. If Shareholders do not pass Resolution 1, the issue of the Placing Shares and the Acquisition will not proceed.

 

Recommendation and Voting Intentions

 

The Directors consider that the Placing and the Acquisition are in the best interests of the Company and Shareholders as a whole. Accordingly, the Directors recommend that you vote in favour of the Resolutions at the General Meeting as they have irrevocably committed to do so in respect of their own beneficial holdings amounting, in aggregate, to 142,766 Existing Ordinary Shares, representing 0.04 per cent. of the Existing Ordinary Shares.

 

In addition, the Company has also received an irrevocable undertaking from Greenberry to vote in favour of the Resolutions in respect of 40,118,865 Existing Ordinary Shares (representing 11.01 per cent. of the Existing Ordinary Shares).

 

As a result, the Company has received irrevocable undertakings to vote in favour of the Resolutions in respect of a total of 40,261,631 Existing Ordinary Shares, representing approximately 11.04 per cent. of the Existing Ordinary Shares.

 

 

DEFINITIONS

 

"Acquisition" or the "Farm-In"	the proposed acquisition of interests in oil and gas assets owned by CGC by the Company, pursuant to the terms of the Acquisition Agreements
"Acquisition Agreements"	the CDL Farmout Agreement and the TA Farmout Agreement
"Additional Investment"	the costs and investments that are additional to the activities or works agreed in the CDL Farmout Agreement
"Admission"	admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules
"AIM"	the AIM market of the London Stock Exchange
"AIM Rules"	together, the AIM Rules for Companies and the AIM Rules for Nominated Advisers
"AIM Rules for Companies"	the AIM Rules for Companies published by the London Stock Exchange, as amended from time to time
"AIM Rules for Nominated Advisers"	the AIM Rules for Nominated Advisers published by the London Stock Exchange, as amended from time to time
"Board" or "Directors"	the board of directors of the Company
"Business Day"	a day on which the London Stock Exchange is open for the transaction of business
"CDL Farmout Agreement"	the farmout agreement offer for the areas Santa Cruz I - Fracción C, Santa Cruz I - Fracción and Laguna De Los Capones dated 31 October 2017 between the Company and CGC (as amended)
"CDL Participation Interest"	50 per cent. of the undivided participation in the rights and obligations under the Concessions
"CGC"	Compañia General de Combustibles S.A.
"CGC Assets" or "Licences"	together the Concessions and the Exploration Permit currently held 100 per cent. by CGC
"Company" or "Echo"	Echo Energy plc, incorporated and registered in England & Wales with registered number 5483127 and, where the context permits, its subsidiaries
"Competent Person" or "GCA"	Gaffney, Cline & Associates Limited, the competent person in relation to Admission, as defined by the AIM Rules, and author of the Competent Person's Report
"Competent Person's Report" or "CPR"	the report relating to the CGC Assets produced by the Competent Person
"Completion"	completion of the Acquisition
"Concessions"	the Concessions for the conventional exploitation of hydrocarbons over the areas known as Santa Cruz I - Fracción C, Santa Cruz I -Fracción D and Laguna De Los Capones as set out in Provincial Decrees No. 2216/2015, Provincial Decree No. 1274/2016 and Provincial Law No. 3500
"Enlarged Share Capital"	the issued share capital of the Company on Admission, comprising the Existing Ordinary Shares and the Placing Shares
"Existing Ordinary Shares"	the 364,539,733 Ordinary Shares in issue as at the date of the admission document
"Exploration Permit" or "Tapi Aike"	the exploration permit for the area known as "Tapi Aike" as set out in the Provincial Decree No. 775/2017
"Fracción C"	the concession for the conventional exploitation of hydrocarbons over the area known as Santa Cruz I - Fracción C set out in Provincial Decrees No. 2216/2015, Provincial Decree No. 1274/2016 and Provincial Law No. 3500
"Fracción D"	the concession for the conventional exploitation of eydrocarbons over the area known as Santa Cruz I - Fracción D set out in Provincial Decrees No. 2216/2015, Provincial Decree No. 1274/2016 and Provincial Law No. 3500
"Financial Conduct Authority" or the "FCA"	the UK Financial Conduct Authority
"Form of Proxy"	the form of proxy accompanying the admission document for use by Shareholders at the General Meeting
"General Meeting"	the general meeting of the Company to be held at 2.00 p.m. on 3 January 2018 (and any adjournment of such meeting) at the offices of Link Asset Services, 65 Gresham Street, London EC2V 7NQ, notice of which is set out at the end of the admission document
"Greenberry"	Greenberry plc
"Group"	the Company and its subsidiaries as at the date of the admission document
"Hannam"	Hannam & Partners (Advisory) LLP, the Company's co-ordinating bookrunner and joint broker
"Initial Term"	the maximum term for the performance of the first stage of work as set out in the CDL Farmout Agreement
"Laguna De Los Capones"	the concession for the conventional exploitation of hydrocarbons over the area known as Laguna De Los Capones as set out in Provincial Decrees No. 2216/2015, Provincial Decree No. 1274/2016 and Provincial Law No. 3500
"London Stock Exchange"	London Stock Exchange plc
"MAR" or "Market Abuse Regulation"	the EU Market Abuse Regulation (Regulation 596/2014)
"Notice of General Meeting"	the notice convening the General Meeting set out in the admission document
"Open Offer"	the intended open offer of the Open Offer Shares at the Placing Price intended to be launched by the Company in January 2018, further details of which will be included in a separate circular to Shareholders
"Open Offer Shares"	the up to 11,428,572 new Ordinary Shares intended to be offered, allotted and issued at the Placing Price by the Company under the Open Offer
"Options"	share options granted or issued pursuant to the Share Option Plan
"Ordinary Shares"	ordinary shares of 0.25 pence each in the capital of the Company
"Placing"	the conditional placing of the Placing Shares with Placees at the Placing Price pursuant to the terms of the Placing Agreement and certain subscription agreements entered into directly with the Company
"Placing Agreement"	the conditional agreement dated 15 December 2017 between the Company (1); the Directors (2); Smith & Williamson (3); Hannam (4); and Shore Capital (5) relating to the Placing
"Placing Price"	17.5 pence per Placing Share
"Placing Shares"	36,391,412 new Ordinary Shares to be allotted and issued at the Placing Price by the Company pursuant to the Placing, conditional on, inter alia, the passing of Resolution 1, Admission and Completion
"Prospectus Directive"	EU Prospectus Directive 2003/71/EC including any relevant measure in each member state of the European Economic Area that has implemented Directive 2003/71/EC
"Prospectus Rules"	the prospectus rules made by the FCA under Part 6 of FSMA
"Proposals"	the Acquisition, the Placing and Admission
"Resolutions"	the resolutions proposed to be passed by Shareholders at the General Meeting, as set out in the Notice of General Meeting
"Restricted Jurisdiction"	the United States, Australia, Canada, Japan and the Republic of South Africa
"Second Term"	the maximum term for the performance of the second stage of work as set out in the CDL Farmout Agreement
"Securities Act"	United States Securities Act of 1933, as amended
"Shareholders"	holders of Ordinary Shares from time to time
"Shore Capital"	Shore Capital Stockbrokers Limited, the Company's joint bookrunner and joint broker
"Smith & Williamson"	Smith & Williamson Corporate Finance Limited, the Company's nominated adviser
"TA Farmout Agreement"	the farmout agreement offer for the "Tapi Aike" Area (Cuenca Austral - Province of Santa Cruz) dated 31 October 2017 between the Company and CGC (as amended)
"TA Participation Interest"	means 50 per cent. of the undivided participation in the rights and obligations under the Exploration Permit
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland
"UK Listing Authority"	the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA
"Warrants"	warrants granted or issued by the Company
"£" or "GBP"	the lawful currency of the United Kingdom
"$" or "US$"	the lawful currency of the United States

 

PLACING, OPEN OFFER AND ADMISSION STATISTICS

 

Number of Existing Ordinary Shares in issue as at the date of the admission document	364,539,733
Number of Warrants in issue as at the date of the admission document	286,223,645
Number of Options in issue on Admission(1)	75,123,143
Number of Placing Shares	36,391,412
Number of Open Offer Shares	up to 11,428,572
Price per Placing Share and Open Offer Share	17.5 pence
Enlarged Share Capital on Admission	400,931,145
Gross proceeds of the Placing	£6.4 million
Estimated net proceeds of the Placing receivable by the Company	£4.7 million
Gross proceeds of the Open Offer (4)	£2.0 million
Market capitalisation of the Company at the Placing Price on Admission	£70.2 million
Placing Shares expressed as a percentage of the Enlarged Share Capital	9.1 per cent.
Open Offer Shares expressed as a percentage of the Enlarged Share Capital (4)	2.9 per cent.
TIDM for the Ordinary Shares	ECHO
ISIN for the Ordinary Shares	GB00BF0YPG76
SEDOL for the Ordinary Shares	BF0YPG7
Legal Entity Identifier ("LEI")	2138006SNII7SKIGG445

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

Publication of the admission document	15 December 2017
Latest time and date for receipt of completed Forms of Proxy	2.00p.m. on 1 January 2018
General Meeting	2.00p.m. on 3 January 2018
Completion of the Acquisition, Admission effective and dealings in the Placing Shares to commence on AIM	8.00 a.m. on 4 January 2018
CREST accounts credited with Placing Shares (where applicable)	4 January 2018
Expected date of despatch of definitive share certificates for Placing Shares (as applicable)	18 January 2018

 

 

Notes:

 

(1)   As at the date of the admission document, 45,123,143 Options are in issue. A further 30,000,000 Options are intended to be issued following announcement and publication of this document

 

(2)   References to time in the admission document are to London (GMT) time unless otherwise stated

 

(3)   If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement on a Regulatory Information Service

 

(4)   Assuming that the Open Offer is fully subscribed

 

 

Important Notice

 

Smith & Williamson Corporate Finance Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is a member of the London Stock Exchange, is acting for the Company and no one else in connection with the proposed Acquisition, Admission and Placing. Smith & Williamson Corporate Finance Limited will not regard any other person as its customer or be responsible to any other person for providing the protections afforded to customers of Smith & Williamson Corporate Finance Limited nor for providing advice in relation to the transactions and arrangements detailed in this announcement and the admission document for which the Company and the Directors are solely responsible. The responsibilities of Smith & Williamson Corporate Finance Limited as the Company's nominated adviser for the purposes of the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company, any Shareholder or any Director or to any other person in respect of his decision to acquire Ordinary Shares in reliance on any part of the admission document. Smith & Williamson Corporate Finance Limited has not authorised the contents of any part of this announcement or the admission document and is not making any representation or warranty, express or implied, as to the contents of this announcement or the admission document and accordingly, without limiting the statutory rights of any recipient of the admission document, no liability whatsoever is accepted by it for the accuracy of any information or opinions contained in this announcement or the admission document or for the omission of any material information for which it is not responsible.

 

Hannam & Partners (Advisory) LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is a member of the London Stock Exchange, is acting for the Company and no one else in connection with the proposed Acquisition, Admission and Placing. Hannam & Partners (Advisory) LLP will not regard any other person as its customer or be responsible to any other person for providing the protections afforded to customers of Hannam & Partners (Advisory) LLP nor for providing advice in relation to the transactions and arrangements detailed in this announcement or the admission document for which the Company and the Directors are solely responsible. The responsibilities of Hannam & Partners (Advisory) LLP as the Company's co-ordinating bookrunner and joint broker are not owed to the Company, any Shareholder or any Director or to any other person in respect of his decision to acquire Ordinary Shares in reliance on any part of this announcement or the admission document. Hannam & Partners (Advisory) LLP is not making any representation or warranty, express or implied, as to the contents of this announcement or the admission document and accordingly, without limiting the statutory rights of any recipient of this announcement or the admission document, no liability is accepted by it for the accuracy of any information or opinions contained in this announcement or the  admission document or for the omission of any material information for which it is not responsible.

 

Shore Capital, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is a member of the London Stock Exchange, is acting exclusively for the Company and no one else in connection with the proposed Acquisition, Admission and Placing. Shore Capital will not regard any other person as its customer or be responsible to any other person for providing the protections afforded to customers of Shore Capital nor for providing advice in relation to the transactions and arrangements detailed in this announcement or the admission document for which the Company and the Directors are solely responsible. The responsibilities of Shore Capital as the Company's joint bookrunner and joint broker are not owed to the Company, any Shareholder or any Director or to any other person in respect of his decision to acquire Ordinary Shares in reliance on any part of this announcement or the admission document. Shore Capital is not making any representation or warranty, express or implied, as to the contents of this announcement or the admission document and accordingly, without limiting the statutory rights of any recipient of this announcement or the admission document, no liability is accepted by it for the accuracy of any information or opinions contained in this announcement or the admission document or for the omission of any material information for which it is not responsible.

 

This announcement is not for publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement, or other information referred to herein, comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

Forward Looking Statements

 

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These statements relate to, among other things, analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to the Company's future prospects, developments and business strategies. These forward-looking statements can be identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" or the negative of those variations, or comparable expressions, including references to assumptions. The forward-looking statements in this announcement, including statements concerning projections of the Company's future results and operations are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements.

 

These forward-looking statements speak only as of the date of this announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.