THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2014 ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION AS PERMITTED BY MAR. THAT INSIDE INFORMATION IS SET OUT IN THIS ANNOUNCEMENT AND HAS BEEN DISCLOSED AS SOON AS POSSIBLE IN ACCORDANCE WITH PARAGRAPH 7 OF ARTICLE 17 OF MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THE INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION IN RELATION TO THE COMPANY AND ITS SECURITIES
1 March 2018
Reabold Resources Plc
"Reabold" or "the Company"
Increased investment in Corallian Energy Limited
Reabold Resources, the investor in pre-cash flow upstream oil and gas projects, is pleased to provide an update on its investment in Corallian Energy Limited ("Corallian").
On 1 November 2017, Reabold announced the signing of two share subscription agreements ("the investment") for a 35.4% interest in Corallian, whose portfolio of UK oil and gas licenses includes the Colter prospect, offshore South of England. The investment, the first in line with Reabold's stated strategy, resulted in the prospect becoming fully-funded at a 40% planned Corallian working interest, and comprised £1.5 million in two tranches, and also included the right to appoint a non-executive director to the board.
Since Reabold's investment, we are delighted that significant progress has been achieved within the Corallian portfolio, including the farm out of Colter to United Oil & Gas, and the farm out of its Wick prospect to Upland Resources and Corfe Energy for a fully carried well at 25% working interest.
On 12 February 2018, Reabold announced that Corallian was intending to raise additional capital ("the fundraise") in order to increase its exposure to the Colter prospect from 40% to 50%, to increase its exposure to the Wick prospect from 25% to 40%, and to further progress additional assets including the Oulton prospect. Following the fundraise Corallian is fully funded for all of this activity.
Reabold is pleased to announce that it is supporting and participating in the fundraise and has signed two subscription agreements with Corallian Energy being made from existing cash resources. The first agreement is an unconditional subscription for £500,000 of new Corallian shares. The second agreement gives Reabold the option to subscribe for an additional £500,000 of new Corallian shares at any point up to 6 April 2018. Further details are set out in Schedule A. Taking the full Corallian fundraising into account, the first agreement will give Reabold 28.5% of Corallian's issued share capital and the second agreement 32.9%.
Reabold is pleased to announce that the drilling of Colter remains on track for the first half of 2018.
The Company also notes the release on 23 February 2018 by Upland Resources PLC, that environmental survey work has been completed on the wick prospect, and that the prospect could contain in place resources of 250M bbls of oil in a well understood petroleum system. According to Corallian management estimates, the Colter project targets an NPV (net to Corallian at a 50% equity interest) of £128M based on 15M barrels of oil and a $55/bbl oil price. Corallian management estimates a 58% chance of success. The Wick project targets an NPV (net to Corallian at a 40% equity interest) of £84M based on 9.4M barrels of oil and a $55/bbl oil price. Corallian management estimates a 30% chance of success.
Stephen Williams, Co-CEO of Reabold Resources, commented:
"We are delighted that Corallian has successfully funded the drilling of the low-risk, high-impact Colter and Wick prospects at meaningfully higher equity interests than initially planned, and that the fundraise has taken place at an increased valuation relative to our initial investment in November last year."
Sachin Oza, Co-CEO of Reabold Resources, commented:
"We continue to believe that this is the ideal time to deploy capital in line with our strategy, and look forward to an exciting year with multiple transformational drilling events."
Glossary
API - American Petroleum Institute
NPV - net present value at discount rate
Prospective Resource- those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations.
Further Information:
The unaudited accounts of Corallian for the period ended 31 October 2016 show no turnover, an operating loss before taxation of £125,343 and as at that date, total assets less current liabilities of £624,657.
ENDS
For further information please contact:
Reabold Resources plc Stephen Williams Sachin Oza |
c/o Camarco +44 (0) 20 3757 4980 |
Beaumont Cornish Limited Roland Cornish James Biddle Felicity Geidt |
+44 (0) 20 7628 3396 |
Camarco Billy Clegg James Crothers Ollie Head |
+44 (0) 20 3757 4980 |
Whitman Howard Limited - Joint Broker Nick Lovering Grant Barker |
+44 (0) 20 7659 1234 |
Turner Pope Investments (TPI) Ltd - Joint Broker Andy Thacker |
+44 (0) 20 3621 4120 |
SCHEDULE A
Reabold has entered into two share subscription agreements with Corallian to subscribe for up to 666,666 ordinary shares in the issued share capital of Corallian.
Unconditional Share Subscription Agreement
Reabold has entered into an unconditional share subscription agreement to subscribe for 333,333 ordinary shares in the issued share capital of Corallian at £1.50/sh for an aggregate subscription amount of £500,000.
Optional Share Subscription Agreement
Reabold has entered into an optional share subscription agreement to subscribe for 333,333 ordinary shares in the issued share capital of Corallian at £1.50/sh for an aggregate subscription amount of £500,000. Reabold can exercise this option through the transfer of funds to Corallian at any time up to and including 6 April 2018.
Notes to Editors
Reabold Resources is an investor in upstream oil & gas projects with an aim to create value from each project by investing in undervalued, low-risk, near-term upstream oil & gas projects and by identifying a clear exit plan prior to investment.
Reabold's long term strategy is to re-invest capital made through its investments into larger projects in order to grow the Company. Reabold aims to gain exposure to assets with limited downside and high potential upside, capitalising on the value created between the entry stage and exit point of its projects. The Company invests in projects that have limited correlation to the oil price.
Reabold has a highly-experienced management team, who possess the necessary background, knowledge and contacts to carry out the Company's strategy. Management believes the current distress in the oil & gas industry presents an opportune time to deploy capital in undervalued assets with huge potential.
