Update re Proposed Reverse Takeover Transaction

Source: www.gulfoilandgas.com 3/31/2021, Location: Not categorized

Advance Energy, an energy company seeking growth through acquisition or farm-in to non-operated interests in discovered upstream projects, is pleased to announce that, further to the subscription agreement with Timor-Leste Petroleum Pty Ltd, as announced on 17 December 2020, the Company has now published an admission document dated 31 March 2021 (the "Admission Document"), incorporating a formal Notice of Extraordinary General Meeting, in relation to, inter alia, the conditional acquisition of a 50 per cent. equity interest in Carnarvon Petroleum Timor Unipessoal Lda ("Carnarvon Petroleum Timor") (the "Acquisition") and an associated conditional placing for New Ordinary Shares (as defined below) to raise, in aggregate, gross proceeds of £21,842,600 (the "Placing").

Carnarvon Petroleum Timor holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of the ASX listed company Carnarvon Petroleum Limited (ASX:CVN) and was incorporated in Timor-Leste in August 2018 to hold and manage Carnarvon Petroleum's interest in the Buffalo PSC.

Strand Hanson Limited ("Strand Hanson") is acting as Nominated and Financial Adviser to the Company and Tennyson Securities (the trading name of Shard Capital Partners LLP) ("Tennyson Securities") and Optiva Securities Limited ("Optiva Securities") are acting as joint Brokers to the Company.

The Acquisition constitutes a reverse takeover transaction pursuant to Rule 14 of the AIM Rules for Companies (the "AIM Rules") and, accordingly, is conditional on, inter alia, the approval of Shareholders at an Extraordinary General Meeting to be held at 9.00 a.m. (London time) on 16 April 2021 at FIM Capital Limited, 55 Athol Street, Douglas, Isle of Man, IM1 1LA.

Restoration of Trading
The Company's Existing Ordinary Shares were suspended from trading on AIM on 17 December 2020 pending the publication of an AIM admission document and following the announcement of the conditional Acquisition, classified as a reverse takeover under the AIM Rules. Following the publication of the Admission Document, the suspension of the Company's Existing Ordinary Shares is expected to be lifted and the Existing Ordinary shares are expected to resume trading at 7:30a.m. today.

Application will be made to the London Stock Exchange in due course for the Enlarged Share Capital to be admitted to trading on AIM. Admission of the Enlarged Share Capital to trading on AIM is expected to take place on or around 19 April 2021, subject to the passing of the Resolutions and the satisfaction of all other conditions.

Key Highlights :
• The Acquisition provides Advance Energy with an indirect beneficial interest in a proven oil field with material existing resources.
- The Buffalo Oil Field contains independently certified 2C oil resources of 34.3 MMstb.
- Previous operators (BHP and Nexen Petroleum Australia Pty Ltd) produced 21 MMstb from the Buffalo Oil Field, over five years, with no material decrease in reservoir pressure.
• Partnering with an established operator in the Carnarvon Petroleum group companies which operate the Buffalo Oil Field.
- Carnarvon Petroleum is a highly capable operator with an experienced in-house E&P team.
• Exposure to material upside potential in 2021 with limited risk.
- B-10 Appraisal Well is expected to be drilled in H2 2021 and is intended to convert the 2C resources to 2P (proved and probable) reserves following re-certification.
- Buffalo PSC has the potential, subject to completion of the Placing and FDP approval, to deliver production of 40,000 bopd within three years of the B-10 Appraisal Well depending on the degree of success of the B-10 Appraisal Well.
• Highly experienced Advance Energy Board and management team, with significant combined regional, technical and capital markets experience.
- Subject to the Acquisition completing, it is proposed that Stephen Whyte and Larry Bottomley will join the Board as independent Non-executive directors.
- The proposed Board will therefore consist of six directors comprising Mark Rollins as Non-Executive Chairman, Leslie Peterkin as Chief Executive Officer, Stephen West as Chief Financial Officer and three Non-Executive Directors.
• Proposed Placing
- The Company has conditionally raised £21,842,600 million (before expenses) (approximately US$30.03 million) via the proposed issue of 840,100,000 New Ordinary Shares (the "Placing Shares") at a price of 2.6 pence per New Ordinary Share (the "Placing Price").
- The net proceeds of the Placing are estimated at £20,008,873 (approximately US$27.51 million). The net proceeds will be used to fund the subscription by Advance Energy TL Limited ("AETL", a wholly owned subsidiary of Advance Energy) for equity in Carnarvon Petroleum Timor, which will be applied by Carnarvon Petroleum Timor to funding the drilling of the B-10 Appraisal Well and certain Buffalo PSC related costs and for the Company's general working capital needs.
- The Company's Chairman, Mark Rollins, and Chief Executive Officer, Leslie Peterkin, have subscribed for, in aggregate, £0.43m of New Ordinary Shares pursuant to the Placing.
• Proposed Capital Consolidation
- The Company is proposing a capital consolidation at a ratio of 10:1 such that, subject to the passing of the relevant Resolutions, Shareholders will be issued one new ordinary share of no par value ("New Ordinary Share") for every 10 existing ordinary shares of no par value (the "Existing Ordinary Share") currently held.

Further comprehensive information on the Buffalo PSC (including an assessment of the Buffalo Oil Field in a Competent Person's Report prepared by RISC Advisory Limited), the Acquisition and the Resolutions can be found in the Company's Admission Document (and the Notice of Extraordinary General Meeting set out therein), which is available on the Company's website at www.advanceplc.com and has been posted to Shareholders.

Leslie Peterkin, Chief Executive Officer of Advance Energy, commented :
"We're delighted to have completed this Placing, and we thank our new and existing shareholders for their belief in the Company and the investment opportunity we presented to them. The fundraise enables the completion of the transformative transaction with Carnarvon Petroleum and we can now look forward with confidence to the exciting B-10 appraisal well later this year which represents a material value catalyst for Advance Energy and its shareholders.

"The Buffalo PSC has the potential to deliver significant production and associated cash flow, with exceptional rates of return. The Board considers this project to be the ideal launchpad for our longer-term strategy, which focuses on achieving scale and generating shareholder returns.

"On behalf of the Board, I would like to welcome Stephen and Larry to Advance Energy, and we look forward to benefitting from their experience and insights going forward.

"The Company has a big year ahead and we look forward to updating the market as we deliver operational and corporate milestones."


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