TIDMMNRG
RNS Number : 8411L
MetalNRG PLC
15 January 2021
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
15(th) January 2021
MetalNRG plc
(The "Company" or "MetalNRG")
OIL & GAS TRANSACTION COMPLETION
MetalNRG plc (LON:MNRG), the natural resource investing and
exploration company, announces that it has received confirmation
from the Oil & Gas Authority ("OGA") that it does not oppose
the change of control of Sunswept Enterprise Limited and associated
subsidiaries to BritNRG Limited ("BritNRG"), the special purpose
vehicle created for the acquisition.
As a result, BritNRG has now completed the transaction as
announced on 9(th) October 2020 and has acquired 100% of Sunswept
Enterprises Limited and related assets.
Following completion of the acquisition and at current modest
production levels, Sunswept is expected to be net cashflow positive
at Brent prices sub $40/bbl, which is significantly below the
current Brent price. A reduction of the breakeven oil price
reference is expected as production levels are restored by bringing
the Whisby #6 Well back on stream (by a wax removal workover)
possibly within Q1/2021. Further reductions and additional cash
generation is expected with the near-term development in both the
Whisby and Newton on Trent assets. The relevant appraisals are
nearing finalisation and BritNRG intends to present detailed plans
to the OGA in the shortest possible timeframes.
The initial investment made by MetalNRG in BritNRG will be via a
convertible loan note for a total amount of GBP450,000, payable in
3 tranches and which upon redemption will convert into 50% of the
total BritNRG equity.
The total working capital investment in BritNRG via MetalNRG's
convertible loan note and the private investor group will be
GBP750,000, which will enable BritNRG to meet: i) purchase
commitments, ii) all financial commitments as required to maintain
the current operations on a stable footing for at least the next 18
months and iii) priority accretive interventions.
The gross transaction cost for Sunswept's issued share capital
is GBP1,900,000; however, the net purchase price is circa
GBP150,000 after settlement and repayment of a director loan to
Sunswept and associated corporation tax consolidation. This
represents a very low entry to an onshore oil and gas producing and
revenue generating asset, fully in line with the MetalNRG
strategy.
With current revenues and reserves/production forecasts, the
fair business value post-completion is expected to be significantly
higher than the net purchase price in consideration of the new
working capital investment of GBP750,000, but most importantly in
consideration of the substantial accretive and the de-risking
activity carried out as part of an extensive due diligence, which
included resource reappraisal and realignment of critical
commercial relationships and which will allow BritNRG to operate in
a considerably improved position in relation to the previous
operator.
Further details will be provided in the coming months, including
an independent evaluation of the business.
The Sunswept Acquisition
Sunswept's subsidiaries have interests in the following UK
onshore licences: PL199 (95%, Operator); PL215 (50%); EXL141 (100%,
Operator); EXL294 (100%, Operator); PEDL090 (50%, Operator); and
PEDL209 (28%). The producing licences were first commissioned and
operated by BP in the mid-1980s. The UK Midlands basin activity
goes back to the pre-war era.
The Sunswept portfolio includes three producing licences and
three exploration permits in Lincolnshire. The producing assets
are: The Whisby field, currently producing from Whisby #4 well at
c. 55bbls/day and Whisby #6 well at c.40bbls/day, (temporarily
shut-in awaiting wax removal workover), The Reepham Field, with one
well currently shut-in and the Newton on Trent field, with one well
currently shut-in and which we are in process to appraise in view
to near-term development.
Oil has been produced from the thin basal Westphalian sands,
overlying oil-bearing but unproductive Dinantian Carbonate in
Whisby and Reepham, with production in Newton from Carboniferous
Crawshaw and Longshaw sands.
The produced fluids are separated and treated at a central
Whisby processing plant. Stabilised oil is transported by tanker
for sale at the Immingham dock and thereafter to the Chevron's
Humber Refinery.
The acquisition of Sunswept and its licence portfolio gives
BritNRG the opportunity to apply modern seismic surveys,
geophysical analysis as well as advanced reservoir study methods
not applied by the current operator, which may lead to further
development and appraisal opportunities.
Rolf Gerritsen, CEO of MetalNRG, commented:
"I am extremely pleased with the outcome and would like to thank
Pierpaolo Rocco for his hard work in leading the transaction to a
successful conclusion and I welcome the opportunity to work with
the private investors who are our partners in this venture. Now
that we have operational control of the assets the real work can
commence and both Pierpaolo and I look forward to updating the
market on BritNRG's progress over the next few months as we develop
the potential upside of the assets."
The person who arranged for the release of this information is
Rolf Gerritsen, the Company's Chief Executive Officer.
For further information, please contact:
METALNRG PLC - Rolf Gerritsen (Chief Executive +44 (0) 20 7796
Officer) 9060
Joint Brokers:
--------------------
PETERHOUSE CAPITAL LIMITED +44 (0) 20 7469
Guy Miller / Duncan Vasey / Lucy Williams 0930
--------------------
SI CAPITAL LIMITED
Nick Emerson +44 (0) 1483 413500
--------------------
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END
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