Angus Energy Acquires Remaining 49 per cent Interest in Saltfleetby

Source: 5/24/2022, Location: Europe

Angus Energy has executed a share purchase agreement ('SPA') to acquire the entire issued share capital of the Company's current joint venture partner in the Saltfleetby Project, Saltfleetby Energy, which owns a 49% working interest in the Project thereby giving Angus Energy a 100% interest in the Project. To fund the Acquisition and other working capital requirements, the Company has concurrently arranged a direct subscription with affiliates of Aleph International Holdings (UK) pursuant to which Aleph has subscribed for a total of 546,000,000 Ordinary Shares in the Company at a price of 1.09896011 pence, being £6,000,000 (Direct Subscription) split into an initial unconditional tranche of £3,000,000 and a second tranche of £3,000,000 conditional on Shareholder approval.

Summary of the Acquisition

The Company has executed a share purchase agreement to acquire the entire issued share capital of the Target from Forum Energy Services. The total effective consideration payable pursuant to the SPA is the sum of £14,052,000, which comprises:

- £250,000 to be paid in cash at Completion;

- the issue of 91 million Ordinary Shares at 1.09896011 pence per share at Completion;

- the issue and allotment of the 546,000,000 Ordinary Shares at a price of 1.2 pence per Ordinary Shareat Completion which are subject to lock-up provisions detailed below; and

- up to £6,250,000 deferred consideration to be paid in instalments from net cash payments to Angus Energy from the Project through to 31 March 2025 (and subject to an upward or downward net cash adjustment) as and when those payments would have been available to SEL under the Company's Senior Debt Facility of May 2021.

Following completion of the Acquisition, the Group would own a 100% working interest in, and would continue to be operator of, the Saltfleetby Licence.

As a result of the issue of the Initial Consideration Shares and Additional Consideration Shares and following the issue of the Initial Subscription Shares detailed below, Forum, will hold 637,000,000 Ordinary Shares in Angus representing approximately 28% of the Enlarged Issued Share Capital and just under 25% of the Enlarged Issued Share Capital following the issue of the Secondary Subscription Shares below.

Under the terms of the SPA, Forum will also have the right to appoint one director to the Board of Angus Energy which, subject to regulatory checks by the Company's Nominated Adviser, is expected to be Paul Forrest, the beneficial owner of Forum. Whilst under the terms of the Direct Subscription, for so long as Aleph holds at least 10% of the issued Ordinary Shares, it shall have the right to approve the appointment of up to two Independent Non-Executive Directors to the board of the Company (and as a member of each and any committee of the Board) who are nominated by the Company.

George Lucan, CEO, comments;

'An opportunity has arisen to consolidate our partners' 49% holding in the Saltfleetby asset for up to £14.052 million which represents a significant discount to the October 2021 P90 valuation of our own 51% interest at £25.4 million. That October 2021 CPR used an average price per therm for gas of under 70 pence over the entire life of the field whilst the Heren NBP forward price for gas is presently trading at a level which is over double that number out to 2025. In that regard we should note that over 70% of overall field revenues are unhedged.

Equally important to the Company's long-term future is to attract the support of a strategic investors in the group led by Aleph, who have shown repeated commitment to Angus and have the resources and shared ambitions to grow Angus's production in hydrocarbons and support its plans in relation to alternative and renewable energies.

Project progress at Saltfleetby is excellent with all major equipment on site, electrical and pipework tie-in underway, and select dry commissioning already begun. With a conservative estimate for wet commissioning we are confident of being able to make initial nominations, or First Gas, toward the middle of June. We aim to focus on new opportunities as soon as this milestone is achieved.'

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