TIDMAEN
RNS Number : 0873X
Andes Energia PLC
26 August 2015
26 August 2015
Andes Energia plc
("Andes" or "the Company")
US$9 million fundraising and US$10 million share issue in
respect of debt cancellation
The Board of Andes (AIM: AEN; BCBA: AEN) is pleased to announce
the following:
-- US$9 million (approximately GBP5.8 million) (gross) to be
raised through a placing (the "Placing") and direct subscription
(the "Subscription", together with the Placing the "Fundraising")
of in aggregate 23,047,376 new ordinary shares of 10 pence per
share ("Ordinary Shares") at a placing price of 25 pence per new
Ordinary Share, with or by existing and new investors;
-- US$10 million cancellation of an existing bond satisfied by
the issue of new Ordinary Shares at a price of 25 pence per new
Ordinary Share (the "Conversion");
-- Net proceeds of the Placing will be used to part finance the
Company's 2015/2016 drilling programme principally in the
Chachahuen area in Argentina comprising:
o participation in the drilling of up to 78 low cost wells;
o 30 workovers in conventional producing development; and
o 310km(2) 3D seismic programme to identify additional well
targets;
-- Targeting a doubling of production from the Chachahuen area in Argentina.
Alejandro Jotayan, CEO of Andes Energia commented:
"The Board of Andes is delighted to announce that existing and
new shareholders have supported the Company in this fundraising
which allows us to develop our high quality portfolio at a faster
rate.
"With our high quality and flexible portfolio, which includes a
significant exposure to the Vaca Muerta world class shale play and
a diversified production base in South America, we are well
positioned to take advantage of the favourable market environment
in the countries where we operate, such as Argentina where the
official crude oil price is US$77 per barrel.
"The net proceeds of the fundraising will be used to finance a
significant part of our active 2015/2016 work campaign which
commences in Q3 2015 and includes the drilling of 78 wells on our
conventional assets as we focus on growing our production portfolio
substantially, targeting an additional 5,000 boepd gross (1,000
boepd net)."
Background to the Fundraising
Andes is a South American focused oil company with one of the
largest acreage positions in the Vaca Muerta shale owned by a
public independent company and a strong production growth record in
its conventional plays in both Argentina and Colombia.
The Company holds a land position of over six million net acres
throughout Argentina, with 19.1 million barrels of oil equivalent
("MMBOE") of 2P reserves, over 640 MMBOE of resources, and a
privileged position in Vaca Muerta, Agrio and other unconventional
shale plays in the Country.
Andes is currently producing c.1,950 barrels per day in
Argentina from five main producing licences (Chachahuen,
representing approximately 50 per cent. of the Company's production
from Argentina, Chañares Herrados and Puesto Pozo Cercado, Vega
Grande, La Brea and El Manzano) with strong growth in production
expected in the near term targeting c.3,000 barrels per day through
its aggressive drilling campaign in Chachahuen, the development of
the La Paloma and workover campaigns in Vega Grande, La Brea, El
Manzano and Chañares Herrados.
Vaca Muerta is the world's third largest shale resource and the
only oil producing shale outside of North America (currently,
producing 45,000 boepd). Andes is partnered with YPF S.A. ("YPF")
in four of its six licences in the region. Mata Mora, one of
Andes's key Vaca Muerta licences, is located in close proximity to
the most active region in the Vaca Muerta shale which accounts for
over 70% of the wells drilled to date.
In Colombia, Andes is also in discussions with a third party
which may result in a collaboration agreement to develop the
licences held by its 51% owned subsidiary Interoil Exploration and
Production ASA ("InterOil"), which could result in the disposal of
part of Andes's interest in InterOil and/or in a farm-out of some
InterOil assets.
Use of proceeds
The net cash proceeds of the Fundraising will fund primarily
over the next 12 months part of the US$22 million work programme
for the Chachahuen area in Argentina. The net cash proceeds of the
Fundraising are expected to be invested in developing production
from this licence alongside Andes's partner YPF. The balance of the
funds required to complete the proposed work programme are expected
to come from the Company's cash flow and existing cash resources
and facilities.
The work programme comprises:
- participation in the drilling of up to 78 low cost wells in Chachahuen in Argentina;
- 30 workovers in conventional production development; and
- a 310km(2) 3D seismic programme to identify additional well targets.
Details of the Fundraising
Andes is raising US$9 million (approximately GBP5.8 million)
(gross) through the issue of 23,047,376 new Ordinary Shares,
pursuant to the Fundraising, at a placing price of 25 pence per new
Ordinary Share with existing and new investors. The Placing has
been arranged by Westhouse and GMP Europe.
In connection with the Fundraising, the Company will be issuing
a total of 6,584,960 warrants ("Warrants") each giving the right to
subscribe for one Ordinary Share at 26 pence per Ordinary Share,
over a term of four years, vesting immediately. Full exercise of
the Warrants would raise an additional US$2.67 million for the
Company.
Partial cancellation of bond
The holders of an existing US$25 million bond, which with
accrued interest now totals US$31 million, have agreed to cancel
US$10 million of the liabilities outstanding under the bond in
consideration for the issue of 25,608,196 New Ordinary Shares at a
price of 25 pence per new Ordinary Share. Following the part
cancellation of the bond, the Company's corporate gross debt
(excluding debt of subsidiary companies) will be approximately
US$47 million. Warrants are not being issued in connection with the
Ordinary Shares to be issued as a result of the Conversion.
Extension of US$5 million debt facility
Further to the announcement on 9 February 2015 in relation to a
US$5 million debt facility (the "Facility") from Mercuria Holdings
(Cyprus) Limited ("Mercuria"). Mercuria have provided to the
Company a letter indicating their intention, subject to certain
conditions, to extend the Facility for a further 12 months, to
February 2017.
Application for Admission and Total Voting Rights
Application has been made for the 48,655,572 new Ordinary Shares
to be issued pursuant to the Fundraising and Conversion to be
admitted to the AIM Market of the London Stock Exchange ("AIM") and
it is expected that admission will take place and trading in the
new Ordinary Shares will commence from 8.00 am on 28 August 2015
("Admission").
Following Admission (but prior to exercise of any Warrants), the
Company's issued share capital will consist of 600,639,123 Ordinary
Shares, with each Ordinary Share carrying the right to one vote and
there are no Ordinary Shares held in treasury. This figure above
may therefore be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the FCA's
Disclosure and Transparency Rules.
Ends
For further information please contact:
Andes Energia Nicolas Mallo Huergo, T: +54 11
plc Chairman 4110 5150
Alejandro Jotayan,
CEO T: +44 20
Billy Clegg, Head 3757 4983
of Communications
Joint Brokers
Westhouse Securities Antonio Bossi T: +44 20
David Coaten 7601 6100
GMP Europe LLP Rob Collins T: +44 20
Emily Morris 7647 2800
Macquarie Capital Jon Fitzpatrick T: +44 20
(Europe) Ltd Fergus Marcroft 3037 2000
Guy de Freitas
Media Enquiries
Camarco Georgia Mann T: +44 20
3757 4986
Note to Editors:
Andes Energia plc is an oil and gas exploration and production
company focussed on onshore South America with a market
capitalisation of circa GBP155m. The Company has its main
operations in Argentina and Colombia.
The Company has approximately 25MMbbls of conventional 2P
reserves, and it also has certified prospective resources of
640MMboe, primarily in the Vaca Muerta unconventional development
in Argentina and over 7.5 million acres across South America.
The Company has approximately 250,000 net acres in the Vaca
Muerta formation, which is the second largest shale oil deposit in
the world and the only producing shale oil deposit outside of the
USA, currently producing 45,000boepd. Over 300 wells have already
been drilled and fracked in the Vaca Muerta formation.
Andes is the only AIM quoted company on the London Stock
Exchange with exposure to the Vaca Muerta shale.
The Company currently produces approximately 3,250 bbls per day
in Argentina and Colombia from 6 conventional fields in Argentina
and 2 in Colombia, with positive cash flows generated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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