TIDMJPRL
RNS Number : 5064M
Jupiter Energy Ltd
31 July 2017
31 July 2017
Jupiter Energy Limited ("Jupiter" or the "Company")
QUARTERLY UPDATE ON ACTIVITIES FOR THE PERIOD TO 30 JUNE
2017
KEY POINTS:
-- Approval by the Kazakh Ministry of Energy of the 3 year Work
Program (2017-2019) and Trial Production Licences for the Akkar
East and West Zhetybai oilfields.
-- $US5m funding package agreed with major shareholder and
debtholder Waterford Petroleum Limited and debtholder Mid Ocean
Limited to enable the recommencement of oil production from wells
J-51, J-52 and Well 19.
-- Signing of two additional Oil Sales Framework Agreements with
local traders for the sale of oil into the Kazakh domestic market
as soon as production recommences.
-- The Company continues to work on various options to provide
long term funding for the ongoing development of Block 31.
-- Jupiter to cancel admission of its Depository Interests over
Ordinary Shares from trading on AIM. Last day of trading on AIM
expected to be 25 August 2017.
Jupiter Energy Limited (ASX: "JPR", AIM: "JPRL" and KASE:
"AU_JPRL") presents the following update on activities for the 3
month period ending 30 June 2017 (the "Quarter"). Also included in
this report are details of subsequent events that have occurred up
to the date of this release.
The Quarter in brief:
There were no oil sales made during the Quarter. All producing
wells were shut in during February 2015, and remain shut in, due to
low domestic oil prices.
On 10 July 2017, the Kazakh Ministry of Energy signed Addendum 8
to Contract 2275 thereby approving Jupiter's three year Work
Program (2017-2019) that supports the 3 year Exploration Licence
Extension that was granted by the Ministry of Energy during the
4(th) quarter of 2016.
As part of the signing of Addendum 8, the Ministry of Energy
also approved Trial Production Licences extensions for the Akkar
East and West Zhetybai oilfields for the period to 29 December
2019. The approval of the Trial Production Licences enables the
Company to recommence oil production as soon as is practical and it
is expected that initial production will be from wells J-51, J-52
and Well 19 which are all located on the Akkar East oilfield.
The current expectation is that oil production will recommence
during the 4(th) Quarter of 2017. The Company will keep
shareholders updated on progress.
Funding Update:
As a result of the signing of Addendum 8, major shareholder and
debtholder Waterford Petroleum Limited ("Waterford") and debt
holder Midocean Holdings Limited ("Midocean") (together "the
Lenders") have agreed to provide up to a total of a further $US5m
(including accrued interest), in the amounts of up to $US4.9m and
$US0.1m, respectively under a new Funding Agreement signed on 28
July 2017 (the "2017 Funding Agreement").
The 2017 Funding Agreement is similar to the 2016 Funding
Agreement with the addition of one new condition. This condition
relates to the payment of a bonus to the Lenders should all or part
of the permit area be sold during the term of the 2017 Funding
Agreement.
A summary of the terms of the 2017 Funding Agreement is as
follows:
-- Unsecured
-- Effective 31 July 2017
-- Repayable on 31 July 2019 (or such later date agreed by the
parties in writing) (the "Repayment Date")
-- Interest rate of 15% pa
-- Interest will accrue and be repayable with principal
-- Lenders can elect to be repaid if there is a change of
control in Jupiter Energy Limited or Jupiter Energy Pte Ltd or
there is a change in control in contract 2275 covering the Block 31
Licence
-- Bonus will be payable to the Lenders equivalent to 5% of the
sale price of contract 2275 in the event that the contract is
assigned, transferred or sold to a 3rd party during the period of
the facility
The bonus would equate to 5% of the value of the consideration
received by the Company if Jupiter or Contract 2275 is assigned,
transferred or sold to a third party prior to the Repayment Date
and will be payable in cash, shares or a combination of both, at
the absolute discretion of the Lenders subject to all relevant
Australian, United Kingdom and Kazakh regulatory bodies (if
required), including pursuant to the ASX Listing Rules, AIM Rules,
KASE Listing Rules and the Corporations Act.
The bonus amount payable to each of the Lenders will be
calculated on the basis of the proportion of debt funding provided
by each as measured against the total funding provided under the
2017 Funding Agreement.
Related Party Transaction:
Waterford Petroleum Limited is a 29.5% shareholder in Jupiter,
therefore Waterford is deemed to be a related party for the
purposes of AIM Rule 13. Entering into the 2017 Funding Agreement
with Waterford is a related party transaction pursuant to the AIM
Rules (the "Related Party Transaction").
The independent Directors of Jupiter, being Geoff Gander, Scott
Mison and Baltabek Kuandykov consider, having consulted with
finnCap, the Company's Nominated Adviser, that the terms of the
Related Party Transaction is fair and reasonable insofar as
Jupiter's shareholders are concerned.
Go Forward Plan:
The additional funds now available to the Company will used to
implement the necessary additional infrastructure and hire new
personnel to enable oil production to recommence from the Akkar
East wells J-51, J-52 and Well 19.
It is expected that production from West Zhetybai wells J-58 and
J-59 will commence once these wells have had workovers completed on
them.
The Company continues to discuss longer term funding options
with interested parties.
Licence Information:
As is required under ASX disclosure rules, the Company confirms
that it currently holds the following licence:
Country Block / Interest Interest Interest
Licence held as acquired held as
at 31 March / disposed at 30 June
2017 of during 2017
the Quarter
------------ ---------- ------------- ------------- ------------
Kazakhstan Block 31 100% Nil 100%
------------ ---------- ------------- ------------- ------------
Cancellation of admission of Depository Interests over Ordinary
Shares to trading on AIM:
The Company was originally dual listed on the AIM market of the
London Stock Exchange in 2011 as a means of accessing capital from
the UK and European equity markets. The Board have reviewed the
Company's AIM listing and concluded that these benefits of listing
have not been realised, due to a range of reasons. Given the
Company's shareholder base is predominantly Australian, the
relatively low volume of trading in shares on AIM and the Company's
current cash position, the Board has concluded that the costs
incurred in maintaining a secondary listing on AIM, exceeds the
benefits obtained from the listing. On this basis, the Board
considers it in the best interests of the Company and all
shareholders to seek a cancellation of its depository interests
("DIs") over ordinary shares ("Ordinary Shares") from trading on
AIM (the "Cancellation").
The Cancellation is not subject to shareholder approval however
the Board has discussed this issue with Jupiter's three major
shareholders being Waterford Petroleum Limited, Arrow Business
Limited and Central Asian Oil Holdings Limited and each entity has
given their unequivocal support in respect of the Cancellation. As
a result the Company will proceed with the Cancellation and the
last trading day in DIs on AIM will be 25 August 2017 and
cancellation will be effective at 7.00 a.m. on 29 August 2017 (the
"Cancellation Date"). Following the cancellation of admission of
the Company's Ordinary Shares on AIM, the DIs which have been
trading on AIM will be cancelled and holding statements will be
issued to current DI holders.
The Company will continue to maintain its listing on the
Australian Stock Exchange (ASX) and shareholders wishing to trade
the Company's Ordinary Shares after the Cancellation Date will be
able to do so on the ASX.
The Company has made arrangements with a UK and Australian
Broker to facilitate the execution of trades of Jupiter shares on
the ASX, thus ensuring that UK shareholders are not materially
prejudiced as a result of the Cancellation.
Contact details are as follows:
Beaufort Securities Ltd Euroz Securities Limited
-------------------------------------------- -------------------------
Attn: Matthew Giles Attn: Scott Fraser
-------------------------------------------- -------------------------
Phone: +44 20 7382 8314 Phone: +61 8 9488 1436
-------------------------------------------- -------------------------
Email: matthew.giles@beaufortsecurities.com Email: sfraser@euroz.com
-------------------------------------------- -------------------------
Computershare, as the Company's registrar, will shortly be
writing to each DI holder on the UK register to advise them of the
process in more detail.
If DI holders do nothing with their existing holdings, the
transfer to the Australian register will happen automatically. Your
shareholding interest in the Company will be transferred to the
Australian based share register maintained by Computershare and an
updated holding statement will be issued to you in due course.
Capital Structure and Finances:
As at 30 June 2017, the Company has 153,377,693 listed shares
trading under the ASX ticker "JPR", the AIM ticker "JPRL" and the
KASE ticker "AU_JPRL".
The Company has no options or Performance Shares, listed or
unlisted, in issue.
As at 30 June 2017, total Company debt outstanding was
$US39,601,632 through a total of five (5) Promissory Notes, with
the following holders:
-- Waterford Petroleum Limited: $US15,372,014
-- Waterford Petroleum Limited: $US10,213,271
-- Mobile Energy Limited: $US10,896,848
-- Midocean Holdings Limited: $US2,350,324
-- Other Private Investors: $US769,175
As at 30 June 2017, the Company has drawn down $US3,808,733
(including accrued interest) under the current $US5m Funding
Agreement with Waterford, as announced on 29 July 2016, and
therefore has a further $US1,191,267 (including accrued interest)
available to it under this Agreement.
The Company will revert from the current "Care and Maintenance"
mode of operation to working under an "Operations Budget". The
amount of additional funding made available to the Company has been
based on a revised budget that takes into account the cost
structure required to support a return to production offset by the
revenues derived from budgeted oil sales.
Based on this additional funding, the revised "Operations
Budget" shows sufficient working capital is now in place until the
end of April 2018.
Unaudited net cash reserves as at 30 June 2017 stood at
approximately $A383,000.
The Directors of the Company continue to defer their Directors'
Fees until such time that the Company has an improved cashflow.
Summary:
Progress during the Quarter was positive and the Company is now
ready to recommence production from the Akkar East and West
Zhetybai oilfields. Regulatory approvals have been received and
funding is in place.
The Company signed a further two Oil Sales Framework Agreements
during the Quarter with a local oil traders, thus ensuring Jupiter
has some negotiation leverage with its domestic oil sales when
production recommences.
The Company continues to conserve cash and is in the process of
cancelling admission of its Depository Interests over Ordinary
Shares trading on AIM. The last day of trading on AIM is expected
to be 25 August 2017.
If shareholders have any questions regarding this Quarterly
report they are welcome to contact the Company on +61 89 322
8222.
Geoff Gander
Chairman/CEO
ENDS
finnCap Ltd +44 (0)20 7220 0500
Matt Goode/ Emily Watts/Anthony Adams (Corporate Finance)
Simon Johnson (Corporate Broking)
Competent Persons Statement:
Alexey Glebov, PhD, with over 33 years' oil & gas industry
experience, is the qualified person who has reviewed and approved
the technical information contained in this report. Alexey PhD's in
technical science (1992) and geology science (2006), an Honors
Degree in Geology and Geophysics (1984) from Novosibirsk State
University and a Gold Medal (1985) from USSR Academy of Sciences.
He is a member since 2001 of the European Association of
Geoscientists & Engineers (EAGE #M2001-097) and was made an
Honorary Oilman in 2011 by the Ministry of Energy of the Russian
Federation. Alexey Glebov is qualified in accordance with ASX
Listing Rule 5.41.
About the Company:
Jupiter Energy Limited is an oil exploration and production
company, quoted on the AIM, ASX and KASE markets. The Company is
focused on developing its onshore assets in western Kazakhstan. In
2008 the Company acquired 100 per cent of the Block 31 permit,
located in the oil-rich Mangistau Basin, close to the port city of
Aktau.
Jupiter has a proven in-country management team, led by an
experienced, international Board, together possessing the skills,
knowledge, network and attention to detail needed to operate
successfully in Kazakhstan. The forward plan will see Jupiter
develop a group production facility on Block 31 to process, store
and export oil. This topside infrastructure is a key element in
moving to long-term production and the achievement of self-funding
for further development of Block 31.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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