Further to the announcement of 22 March 2010, the Directors of Egdon Resources plc are pleased to announce the completion of the acquisition of certain of EnCore Oil plc’s (“EnCore”) assets by Egdon (“the Acquisition”).
The package of assets acquired comprise of EnCore’s entire interest in nine onshore UK licences and an interest in the Ceres gas field in the Southern North Sea.
As consideration for the Acquisition, Egdon has issued 39,200,000 Ordinary Shares (“the Consideration Shares”) to EnCore, which represent 29.998 per cent. of the enlarged share capital of the Company. Application has been made for admission of the Consideration Shares to trading on AIM, which is expected to become effective on 29 July 2010. The total number of Egdon Ordinary Shares in issue on admission will be 130,675,774.
Completion also triggers a number of other terms of the transaction, namely;
Lock-in Arrangements — whereby EnCore and certain of its subsidiaries have undertaken not to dispose of any Consideration Shares for a period of 12 months from the date of their admission to trading on AIM.
Non-Compete Arrangements — under which, other than by agreement, Egdon will restrict its offshore activities in the UK and EnCore will restrict its onshore operations in the UK and France to the areas adjoining their respective existing operations.
Technical Services Agreement — whereby EnCore and Egdon have agreed to provide each other with certain services in connection with each of their businesses and the development of the Assets following the Acquisition.
Facility Agreement — under which EnCore has agreed to provide Egdon with access to an unsecured loan facility for the purpose of exploration and development activities of Egdon and its affiliates. The Facility Agreement provides a term loan facility for a period of two years in an aggregate amount equal to £1,500,000 which can be drawn down at the request of Egdon in tranches of £250,000 at an interest rate of 10% or LIBOR plus 5% if greater.
The acquisition of EnCore E&P Limited which holds the Nimes and Mairy permits in France is expected to complete later in the year. The consideration for this will be £100,000 in cash.
EnCore have a right on completion to appoint a non-executive director to the Egdon Board for a period of five years thereafter, provided that either it holds 15 per cent. or more of the share capital of Egdon or it is the largest shareholder of the Company.
Accordingly, we are pleased to report that Alan Booth, the Chief Executive Officer of Encore, has today been appointed as a non-executive Director of Egdon. Prior to co-founding EnCore, Alan Booth was Chairman and Managing Director of EnCana (U.K.) Limited (now Nexen Petroleum U.K. Limited), and a member of EnCana Corporation’s executive management team. He was instrumental in building EnCana UK from a new UK entrant in late 1996 with a $55 million exploration funding obligation into a significant UK production operator and the discoverer and development operator for the Buzzard field. In late 2004 Alan lead the UK team which sold EnCana (U.K.) Limited to Nexen Corporation for $2.1 billion. Prior to EnCana, Alan worked in a number of positions of increasing seniority for Amerada Hess and Oryx Energy both in the UK and overseas. He has particular experience in new ventures acquisitions and exploration in the UK, Scandinavia, Australasia as well as the Middle East and Africa.
From December 2003 until March 2005, Alan was President of the United Kingdom Offshore Operators Association (UKOOA) the representative body for all UKCS offshore operators. He also subsequently served as a Director of Oil & Gas UK and was a member of PILOT, the main forum for Government-Industry liaison chaired by the Energy Minister, as well as being a member of the Industry Leadership Team (ILT). In 2003, he was elected President of the Petroleum Exploration Society of Great Britain; in April 2004 Alan was awarded the Petroleum Group Silver Medal by the Geological Society in recognition of his contribution to the Industry. Alan’s background is in geoscience and he holds a BSc in Geology from Nottingham University, and a Masters Degree in Petroleum Geology from the Royal School of Mines, Imperial College London.
Alan is a current director of industry body OGIA.
Alan Booth, aged 52, currently holds the following directorships; EnCore Exploration Limited, EnCore Natural Resources Limited, EnCore Petroleum Limited, EnCore North Sea Limited, EnCore Oil plc, EnCore Oil and Gas Limited, EnCore (E&P) Limited, EnCore (NNS) Limited, EnCore (VOG) Limited, EnCore Gas Storage Limited, Oil and Gas Independents’ Association Limited
Within the last five years, Alan Booth has held the following directorships; EnCore (SNS) Limited, Nexen Petroleum UK Holdings Limited, Petroleum Exploration Society of Great Britain Limited, United Kingdom Offshore Operators Association Limited, Oil and Gas UK Limited, RWA DEA UK EC Limited, The United Kingdom Offshore Oil and Gas Industry Association Limited
Commenting on today’s announcement, Mark Abbott, Managing Director of Egdon said:
“We are pleased to report the successful completion of the acquisition of these UK assets from EnCore which provide a significant increase in our opportunity base from which to develop and grow our business over the coming years. The assets are an excellent strategic fit with our existing portfolio and we look forward to fully integrating them into Egdon’s business. Key amongst them are the Ceres gas field, an increased interest in the Kirkleatham gas development, the Biscathorpe Prospect adjacent to our Keddington oil field in Lincolnshire and an interest in two near-term exploration wells in the Weald Basin (Markwells Wood-1 and Havant-1).
I would also like to welcome Alan Booth to Egdon’s Board. Alan is a highly experienced and respected member of the UK oil and gas industry and we look forward to his input and advice in the development of Egdon’s business over the coming years”