23 July 2019
Rockhopper Exploration plc
("Rockhopper" or the "Company")
Disposal of Abu Sennan, Egypt
Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key interests in the North Falkland Basin and the Greater Mediterranean region, is pleased to announce that it has signed a share purchase agreement ("SPA") with United Oil and Gas plc ("United") for the sale of Rockhopper Egypt Pty Limited for consideration of US$16 million. The key asset of Rockhopper Egypt Pty Limited is a 22% working interest in the Abu Sennan concession ("Abu Sennan").
Under the terms of the SPA, the consideration will be satisfied by a payment by United of not less than US$11 million in cash at completion.
In order to satisfy the cash component of the consideration, United has announced a prepayment financing structure of up to US$8 million with BP. In addition, United has announced the intention to raise capital through the issue of new shares simultaneously to the proposed acquisition. A proportion of such placement proceeds will be used to make a further cash payment to Rockhopper shortly after completion. Any shortfall between the headline consideration of US$16 million and the cash payments from United will be satisfied in new United shares being issued to Rockhopper (the "Consideration Shares"). The Consideration Shares issued to Rockhopper will be priced at the price at which United issue new shares as part of their proposed capital raise.
Any Consideration Shares held by Rockhopper in United are subject to certain lock-up and orderly market disposal provisions for a period of up to 12 months from completion.
The transaction is subject to satisfaction of customary conditions precedent including United shareholder approval, completion of the readmission of United to trading on AIM and receipt of Egyptian government approvals. The transaction is expected to complete during Q4 2019 with the effective date being 1 January 2019.
About Abu Sennan
· For the year to 31 December 2018, Abu Sennan produced approximately 813 barrels of oil equivalent per day net to Rockhopper's 22% working interest.
· Revenue and profit/(loss) after tax of US$6.2 million and US$(2.2) million respectively are attributable to Rockhopper's 22% interest in Abu Sennan in the 12 month period to 31 December 2018.
· Net Book Value for Abu Sennan for the year ended 31 December 2018 was US$13.8 million.
About United
· United is an AIM-traded oil and gas company.
· United was established to explore, appraise and develop low risk assets in Europe and to develop higher risk, higher impact exploration projects in the Caribbean, Latin America and Africa.
· The following table outlines United's licence interests:
Country |
Licence |
Operator |
United Interest |
Italy |
Podere Gallina Licence |
Po Valley Energy Limited |
20% |
UK |
Waddock Cross Field |
Egdon Resources UK Limited |
26.25% |
UK |
PL090 Exploration |
Egdon Resources UK Limited |
18.95% |
UK |
P1918 |
Corallian Energy Limited |
10% |
UK |
PEDL 330 |
Corallian Energy Limited |
10% |
UK |
PEDL 345 |
Corallian Energy Limited |
10% |
UK |
P2366 |
United Oil & Gas Plc |
95% |
Jamaica |
Walton-Morant |
Tullow Jamaica Ltd |
20% |
Sam Moody, CEO of Rockhopper, commented:
"Abu Sennan has been an excellent asset for Rockhopper, but with activity ramping up during 2019 ahead of the formal loan application for the senior debt element of our core Sea Lion development, we have decided this is the moment to sell at a point where we can crystallise real value. Having acquired our interest in August 2016 for US$11.9 million and agreed to sell for US$16 million, plus benefitting from approximately US$4 million of free cash flow during our period of ownership to the effective date, we will have generated a material return on investment.
"We have a number of potentially transformational catalysts in the coming months including the hugely important submission of the Sea Lion project information memorandum to senior debt lenders, continued progress on Sea Lion financing discussions in the autumn and the outcome of our Ombrina Mare arbitration in Q1 2020."
Enquiries:
Rockhopper Exploration plc
Sam Moody - Chief Executive Officer
Stewart MacDonald - Chief Financial Officer
Tel. +44 (0) 20 7390 0230 (via Vigo Communications)
Canaccord Genuity Limited (NOMAD and Joint Broker)
Henry Fitzgerald-O'Connor
James Asensio
Tel. +44 (0) 20 7523 8000
Peel Hunt LLP (Joint Broker)
Richard Crichton
Tel. +44 (0) 20 7418 8900
Vigo Communications
Patrick d'Ancona
Ben Simons
Tel. +44 (0) 20 7390 0231
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 ("MAR").
