TIDMHUR
RNS Number : 9389E
Hurricane Energy PLC
12 May 2017
For immediate release: 12 May 2017
THIS ANNOUNCEMENT, INCLUDING THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE
UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF IRELAND OR
THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH
SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS
ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE,
NOR IS IT INTED THAT IT WILL BE SO APPROVED.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE MARKET ABUSE REGULATION (EU No. 596/2014). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
Hurricane Energy plc
("Hurricane" or the "Company")
Warrant Issue
Hurricane Energy plc, the UK based oil and gas company focused
on hydrocarbon resources in naturally fractured basement
reservoirs, announces that it has today entered into a deed of
warrant grant with Stifel Nicolaus Europe Limited ("Stifel") (the
"Warrant Issue") under which Stifel will be entitled to subscribe
for up to 25,000,000 ordinary shares of 0.1p each in the capital of
the Company ("Ordinary Shares").
In order to maintain the Company's existing targeted timetable
towards first oil in H1 2019 from the Company's Early Production
System ("EPS") development at its Lancaster field, West of
Shetland, the Company has committed to, and plans to further commit
to, certain pre-sanction long lead items, with expenditures to be
incurred on a staged basis to the end of Q2 2017. By committing to
these expenditures the Company reduces the risk that key equipment
will not be available for installation during the benign weather
window in Q2 and Q3 2018.
The Company intends to apply its existing cash resources to
cover these expenditures. However, any proceeds (the "Proceeds")
arising from the issue of Ordinary Shares pursuant to the Warrant
Issue will provide the Company with additional resources and
working capital, and importantly preserve flexibility in respect of
both the timing and structure of any future fundraising(s) required
to fully fund the EPS.
The Company updated shareholders and investors at its Capital
Markets Day presentation on 7 April 2017 on the progress of its
drilling programme since the fundraising conducted in October 2016
and the development programme related to the EPS. Investors are
referred to that presentation, a copy of which is available on the
Company's website, for additional information in this regard.
Use of Proceeds
The Company has applied, and intends to continue to apply, its
existing cash resources toward certain pre-sanction long lead time
items, including commencing work on the FPSO and mooring buoy,
ordering the fabrication of key subsea components such as Christmas
trees, and undertaking certain geotechnical and geophysical studies
in relation to the proposed location of the FPSO. Commitments have
already been made towards some of these items and the Company plans
to commit to the remainder during June 2017. The Proceeds, if any,
will be applied to provide the Company with additional resources
and working capital, and importantly preserve flexibility in
respect of both the timing and structure of any future
fundraising(s) required to fully fund the EPS.
The Company currently aims to sanction the EPS phase of the
Lancaster development towards the end of H1 2017 or early H2 2017
and to achieve first oil during H1 2019 (subject to financing as
mentioned below). Hurricane will incur the above mentioned long
lead expenditures on a staged basis over the rest of Q2 2017, in
line with its targeted timing for full EPS financing and final
investment decision ("FID").
As stated in the Company's Capital Markets Day presentation, it
is estimated that capital expenditure required to achieve first oil
from the EPS, excluding the two horizontal wells which have already
been drilled and tested, is expected to be approximately US$467
million. This estimate includes all pre-sanction expenditures
including front end engineering design studies, long lead items,
project management and time writing to FID.
The Company is considering a range of financing options for the
EPS phase of the Lancaster development and currently intends to
finance the EPS via a combination of some or all of the following
options: equity, deferred vendor finance, debt and debt-related
securities and farmout.
Details of the Warrant Issue
Pursuant to the Warrant Issue, the Company has issued to Stifel,
at nil cost, warrants (the "Warrants") over 25,000,000 Ordinary
Shares. The exercise price under each of the Warrants is 95% of the
volume weighted average price of the Ordinary Shares, calculated
over the trading day prior to exercise. Stifel will use reasonable
endeavours to procure purchasers for the Ordinary Shares issued, if
any, under the Warrants. The Warrants may be exercised in whole or
in part by Stifel.
Unless the Company consents to a continuation of the Warrants,
the Warrants will lapse on 31 May 2017. If the Warrants are
continued they will lapse on the final longstop date of 30 June
2017. In addition, the Company may also, at its election and
without penalty, terminate or suspend the Warrants on any Business
Day before 30 June 2017, after which date, in the event of a
termination, any outstanding entitlement of Stifel to exercise
Warrants will fall away.
A block listing application has been made to the London Stock
Exchange for the admission to trading on AIM of up to 25,000,000
Ordinary Shares (the "Block Listing Shares"). The application for
the admission of the Block Listing Shares relates to the maximum
number of Ordinary Shares that could be issued as a result of the
potential exercise of Warrants granted pursuant to the Warrant
Issue. Block Listing Shares will be issued from time to time
pursuant to the exercise of the Warrants. The Company will confirm
total voting rights regularly in compliance with the Disclosure and
Transparency Rules. The Block Listing Shares will be issued
credited as fully paid and will rank pari passu in all respects
with the existing ordinary shares of the Company. It is expected
that the block admission will become effective on 17 May 2017.
Dr Robert Trice, Hurricane's CEO, commented: "We are pleased to
have issued the Warrants to Stifel, our Joint Corporate Broker. We
believe that the structure of the Warrant Issue provides the
Company with access to a flexible working capital funding structure
which would not be available through other means of financing. We
expect that any proceeds raised will help preserve the Company's
optionality over the timing and choice of funding route and will
strengthen the Company's hand in discussions with counterparties.
This demonstrates the Board's confidence that the Company's work on
the EPS development remains on track according to the current
timetable."
Risk factors
The attention of investors is drawn to the risk factors set out
in Appendix 1 of the Company's announcement dated on or about 20
October 2016, which provide additional information on the Company's
fundraising plans and the risks associated therewith.
The Company also draws the intention of investors to its
announcement of today's date and in particular the section thereof
headed "Going Concern" in the Directors' Report.
Contacts:
Dr Robert Trice
(Chief Executive
Officer)/
Hurricane Alistair Stobie
Energy (Chief Financial
plc Officer) +44 (0)1483 862 820
Nominated Adviser
and Joint Corporate
Cenkos Broker
Securities Derrick Lee/Nick
plc Tulloch/Beth McKiernan +44 (0)131 220 6939
Joint Corporate
Stifel Broker
Nicolaus Callum Stewart/Nicholas
Europe ARhodes/Ashton
Limited Clanfield +44 (0)20 7710 7600
Vigo Communications Public Relations +44 (0)20 7830 9704
Patrick d'Ancona/Ben Hurricane@vigocomms.com
Simons
Market soundings, as defined in the Market Abuse Regulation
("MAR"), were taken in respect of the Warrant Issue with the result
that certain persons became aware of inside information, as
permitted by MAR. That inside information is set out in this
announcement and has been disclosed as soon as possible in
accordance with paragraph 7 of article 17 of MAR. Therefore, those
persons that received inside information in a market sounding are
no longer in possession of inside information relating to the
Company and its securities.
This announcement contains certain statements that are or may be
deemed to be "forward-looking statements" which are based on
current expectations and projections about current events. These
statements typically contain words such as "targets", "believes",
"intends", "may", "will", "should", "expects" and "anticipates" and
words of similar import. By their nature, forward looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that may or may not occur in the
future. Forward-looking statements are not guarantees of future
performance.
Statements contained in this announcement regarding past trends
or activities should not be taken as a representation that such
trends or activities will continue in the future.
The information contained in this announcement is subject to
change without notice and, except as required by applicable law or
the AIM Rules, the Company does not assume any responsibility or
obligation to update publicly or review any forward-looking
statements contained herein. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement. No statement in this announcement is or is intended
to be a profit forecast or to imply that the earnings of the
Company for the current or future financial years will necessarily
match or exceed the historical or published earnings of the
Company.
The price of shares and the income from them may go down as well
as up and investors may not get back the full amount invested on
disposal of the shares. Past performance is no guide to future
performance and persons who require advice should consult an
independent financial adviser.
The distribution of this announcement in certain jurisdictions
may be restricted by law. No action has been taken by the Company
or any of the Joint Corporate Brokers that would permit possession
or distribution of this announcement or any other publicity
material relating to the Company in any jurisdiction where action
for that purpose is required. Persons into whose possession this
announcement comes are required by the Company and the Joint
Corporate Brokers to inform themselves about, and to observe, any
such restrictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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May 12, 2017 02:05 ET (06:05 GMT)
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