TIDMCERP
RNS Number : 9671D
Columbus Energy Resources PLC
15 October 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE
REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION WHERE
TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS
OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN COLUMBUS ENERGY RESOURCES PLC. THIS ANNOUNCEMENT DOES
NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION,
RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR,
OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF COLUMBUS ENERGY
RESOURCES PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
15 October 2018
COLUMBUS ENERGY RESOURCES PLC
("Columbus" or the "Company")
Conditional placing to raise up to approximately GBP2.5
million
Acceleration of growth strategy
The Board of Columbus, the oil and gas producer and explorer
focused on onshore Trinidad with the ambition to grow in South
America, is pleased to announce a conditional placing, by VSA
Capital Limited ("VSA"), with new and existing shareholders
including Schroder Investment Management Limited ("Schroders"),
Michael Joseph and Burggraben Holding AG ("Burggraben"), of
71,428,571 new ordinary shares in the share capital of the Company
(the "Placing Shares") at a price of 3.5 pence per Placing Share
(the "Placing Price") to raise approximately GBP2.5 million (before
expenses) (the "Placing"), subject to approval by shareholders at a
General Meeting proposed to be held on 2 November 2018.
Highlights:
-- Conditional Placing of Placing Shares at 3.5 pence per
Placing Share to raise approximately GBP2.5 million (before
expenses);
-- The Placing Price represents a discount of approximately
6.67% to the Closing Price on Friday 12 October 2018, the last
trading day prior to this Announcement;
-- The Board intend to use the net proceeds of the Placing to:
o Repay the North Energy Capital AS loan facility ("North Energy
Loan") in the sum of US$1.25 million (instead of the intended
drawdown from the 2018 Lind Facility which was referred to on 10
October 2018 in the Company's Business, Operational and Financial
Update);
o Establish and implement a multi-well drilling campaign on the
Steeldrum assets and also in the South West Peninsula ("SWP") -
driven by value and "best bang for our buck"; and
o Upgrade facilities in the South West Peninsula, particularly
at Bonasse and Icacos, to speed up oil production growth and sales
and also allow for early sales from any exploration success at the
SWP in 2019.
-- The Placing is conditional upon the passing by Shareholders
of a special resolution to waive pre-emption rights on the issue of
the Placing Shares (the "Resolution") at a General Meeting of the
Company to be held on 2 November 2018; and
-- Dealings in the Placing Shares issued pursuant to the Placing
are expected to commence at 8.00 a.m. on 5 November 2018.
Leo Koot, Executive Chairman of Columbus, commented:
"With the completion of the Steeldrum transaction, Columbus now
has a diverse production base and multiple, large exploration
prospects. This is despite the legacy issues we have faced over the
last year, which have made a dent in our funds earmarked for
further development and have slowed our pace of growth.
"Today's announcement follows strong market interest from two of
our major shareholders who approached us late last week to provide
the additional capital needed to fund an accelerated growth
strategy. It also introduces a new institutional shareholder to our
share register, Burggraben, whose principals visited our operations
in Trinidad with our Board for a few days in August 2018. The
placing provides us with the financial flexibility to pay off the
North Energy Loan, thereby simplifying and strengthening our
balance sheet. As a result, we will no longer need to drawdown on
the 2018 Lind Facility to repay the North Energy Loan. Our major
shareholders were keen to stress that they would rather see the
monthly repayments, that would have been required to have been made
on that Lind loan if it had been drawn-down, being invested in more
value-adding opportunities in our operations.
"Columbus can now establish and accelerate a multi-well drilling
campaign on the Steeldrum assets, capitalising on the optionality
the acquisition of Steeldrum grants us, and also bring forward
activities in the South West Peninsula region. From these assets,
and our ongoing other work programmes previously announced, I
believe we can make some very strong, quick returns on very little
capex.
"We are grateful for the long-term support from our shareholders
and are delighted to welcome Burggraben, who expressed a
willingness, after their visit to our operations in Trinidad, to
invest in Columbus when the right opportunity arose. We remain
committed to the further creation of value for all invested in
Columbus and are confident that today's placing provides us with
the springboard to deliver additional production growth that will
in turn be reflected in our cash flow and the share price which, in
turn, rewards everyone, including myself and the management team,
who are still effectively using half their salary to buy equity on
a monthly basis at 5.1p per share."
Background to and reasons for the Placing
2018 has been a year of significant development and progress for
the Company. The completion of the acquisition of Steeldrum Oil
Company Inc ("Steeldrum"), has been a material step in the growth
of the Company and establishes a very solid base for our Trinidad
operations.
The Company now has a large, well balanced portfolio of assets
across the south and south-west of Trinidad. The portfolio includes
low-risk but highly prospective exploration opportunities in the
South West Peninsula, a development project in Cory Moruga and 5
producing oilfields (Goudron, Innis Trinity, South Erin, Bonasse
and Icacos). This provides the Company with an excellent
opportunity to exploit our existing and new assets through
operational excellence and also grow organically through
exploration and the Cory Moruga development project. We will now
focus on growing production and revenues in Innis Trinity and South
Erin through the adoption of a similar operational strategy to our
existing fields.
Company Loans
The Company reported in its Business, Financial and Operational
Update (Q3 2018) on 10 October 2018, that Columbus planned to
drawdown US$1.25 million from the 2018 Lind Loan, announced on 13
July 2018 alongside the announcement of the Steeldrum acquisition,
to repay a US$1.25 million loan which Steeldrum holds with North
Energy Capital AS ("North Energy and "North Energy Loan"). The
planned drawn-down under the 2018 Lind Facility, which was
specifically envisaged within the 2018 Lind Facility when it was
established, would require repayments to Lind by the Company over a
two-year period at approximately US$62,750 per month.
The Company would rather invest an equivalent amount in more
value-adding operational and business opportunities. In addition,
the Company wishes to improve its balance sheet by reducing its
outstanding loan position and has been seeking a more efficient
means of repaying its loans and also introducing additional capital
for new growth opportunities. Recent discussions with two of the
Company's major shareholders, Schroders and Michael Joseph, as well
as with the principals of Burggraben, indicated a willingness by
those investors to provide a combined total of GBP2.5 million of
funds via the Placing to enable these objectives to be
achieved.
Use of Proceeds
The Board believes that the Company has an excellent opportunity
to capitalise on its producing and exploration assets in Trinidad
and to accelerate its growth in to South America. It is the Board's
intentions that the net proceeds of the Placing (amounting to
approximately GBP2.365 million) will provide the Company with the
capital required to not only pay off the North Energy Loan but also
to continue to enhance its well-balanced portfolio of assets in
Trinidad. The Board therefore intends to use the net proceeds of
the Placing to:
-- Repay the North Energy Loan in the sum of US$1.25 million;
-- Establish and implement a multi-well drilling campaign on the
Steeldrum assets and also in the SWP - driven by value and "best
bang for our buck"; and
-- Optimise facilities in the SWP, particularly at Bonasse and
Icacos, to speed up oil production growth and sales and also allow
for early sales from any exploration success at the SWP in
2019.
Details of the Placing
Pursuant to the Placing, the Company is seeking to raise
approximately GBP2.5 million through the issue of 71,428,571 new
ordinary shares in the share capital of the Company at a price of
3.5 pence per Placing Share.
The Placing will be conditional upon the passing of the
Resolution at a General Meeting of Shareholders intended to be held
on 2 November 2018. The Resolution is needed authorise the
Directors to allot the Placing Shares on a non pre-emptive basis.
This authority will not extend beyond the Placing Shares. Further
details on the Resolution will be set out in the Circular (as
defined below).
Application will be made for the Placing to be admitted to
trading on the AIM market ("AIM") of London Stock Exchange,
("Admission"), and it is expected that Admission will become
effective and that dealings will commence in the Placing Shares at
8.00 a.m. on 5 November 2018.
The Ordinary Shares to be issued pursuant to the Placing will
rank pari passu with the Existing Ordinary Shares.
Schroders is a substantial shareholder of the Company as defined
in the AIM Rules for Companies ("AIM Rules"). As such, Schroders is
a "related party" pursuant to the AIM Rules and the proposed
Placing of 21,428,571 Placing Shares to Schroders is therefore a
related party transaction for the purposes of Rule 13 of the AIM
Rules. The Directors consider, having consulted with Beaumont
Cornish, the Company's nominated adviser, that the terms of Placing
are fair and reasonable insofar as the Company's shareholders are
concerned.
VSA is acting as Financial Adviser and Broker to the Company in
connection with the Placing.
Total Voting Rights
Should the Resolution be passed and upon completion of the
Placing, the Company's new issued share capital will consist of
830,881,192 ordinary shares with a nominal value of 0.05p each,
with voting rights ("Ordinary Shares"). The Company does not hold
any shares in Treasury. Therefore, the total number of Ordinary
Shares in the Company with voting rights will be 830,881,192.
Notice of General Meeting
The Placing will be conditional upon the approval of the
Resolution by Shareholders at the General Meeting to be held at the
offices of VSA Capital Limited, New Liverpool House, 15-17 Eldon
Street, London EC2M 7LD at 11.00 a.m. on 2 November 2018. A
circular to shareholders (the "Circular") containing a notice of
General Meeting and proxy card will be posted to shareholders no
later than 17 October 2018 and will be available on the Company's
website https://Columbus-erp.com
Importance of vote
Shareholders should be aware that, if the Resolution is not
approved at the General Meeting, the net proceeds of the Placing
will not be received by the Company.
Recommendation
The Directors consider that the Placing is in the best interests
of the Company and its Shareholders and is most likely to promote
the success of the Company for the benefit of the Shareholders as a
whole. Accordingly, in the Circular, the Directors will unanimously
recommend that Shareholders vote in favour of the proposed
Resolution, as they intend to do in respect of their holdings
amount to an aggregate of 2,688,366 Ordinary Shares, representing
approximately 0.35% of the Company's Existing Ordinary Shares.
Contact Information
Columbus Energy Resources plc +44 (0)20 7203
Leo Koot / Gordon Stein 2039
VSA Capital Limited
Financial Adviser and Broker +44 (0)20 3005
Andrew Monk / Andrew Raca 5000
Beaumont Cornish Limited
Nominated Adviser +44 (0)20 7628
Roland Cornish / Rosalind Hill Abrahams 3396
Camarco
Public and Investor Relations +44 (0)20 3757
Georgia Edwards / James Crothers 4983
Notes to Editors:
Columbus Energy Resources Plc is an oil and gas producer and
explorer focused on onshore Trinidad with the ambition to grow in
South America. The Columbus Energy group has five producing fields,
one development project and a highly prospective exploration
portfolio in the South West Peninsula, which lies in the extreme
southwest of Trinidad and consists of stacked shallow and deep
prospects.
Columbus is cashflow positive from operations and aims to create
transformational growth by developing its portfolio in a capital
efficient and disciplined manner.
Columbus is guided by the following core values; safe and
sustainable, stronger together, creative excellence, positive
energy, totally trusted and personally responsible.
The Company is led by an experienced Board and senior management
team with supportive shareholders and intends on leveraging its
expertise and experience to build an attractive and diversified
portfolio of assets across South America in order to build an oil
production led South American exploration business.
To find out more, visit www.Columbus-erp.com or follow us on
Twitter @Columbus_ERP.
Market soundings
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market
soundings (as defined in MAR) were taken in respect of the Placing
with the result that certain persons became aware of inside
information (as defined in MAR), as permitted by MAR. This inside
information is set out in this Announcement. Therefore, those
persons that received inside information in a market sounding are
no longer in possession of such inside information relating to the
Company and its securities.
Forward-looking statements
To the extent that this Announcement contains certain
forward-looking statements with respect to certain of the Company's
plans and its current goals and expectations, a number of risks and
uncertainties exist. The Company cautions readers that any
forward-looking statement is no guarantee of future performance and
that actual results could differ materially from those contained in
the forward-looking statements.
A forward-looking statement can be identified by the fact that
it does not relate only to historical or current facts.
Forward-looking statements sometimes use words such as "expect",
"intend", "believe" or other words of similar meaning. Examples of
forward-looking statements include, amongst others, statements
regarding or which make assumptions in respect of the planned use
of the proceeds of the Placing and plans and objectives for future
operations and any other statements that are not historical
fact.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances
including, but not limited to, economic and business conditions,
the effects of continued volatility in credit markets, market
related risks such as changes in interest rates and foreign
exchange rates, the policies and actions of governmental and
regulatory authorities and changes in legislation. A number of
these factors are beyond the Company's control. As a result, the
Company's actual future results may differ materially from the
plans, goals and expectations set forth in the Company's
forward-looking statements.
Any forward-looking statement made in this Announcement by or on
behalf of the Company speaks only as of the date it is made. These
forward-looking statements reflect the Company's judgement at the
date of this Announcement and are not intended to give any
assurance as to future results. Except as required by the Financial
Conduct Authority, the London Stock Exchange plc, the AIM Rules or
applicable law, the Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this Announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statement is based.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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