TIDMMYN
RNS Number : 3407J
Mayan Energy Limited
27 June 2017
The following amendments have been made to the 'Subscription,
Board Change and Investment' announcement released on 27 June 2017
at 7.00am under RNS No 2188J.
1. The placing price of the Company's subscription for GBP90,000
in new shares in Block Energy should have been GBP0.0085 and not
GBP0.07; and
2. The resulting percentage interest in Block Energy acquired by
the Company should have been 2.47% and not 1.68% as previously
disclosed.
All other details remain unchanged.
The full amended text is shown below.
7.00am 27(th) June 2017
Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 /
Sector: Oil and Gas
Mayan Energy Ltd ("Mayan" or "the Company")
Subscription, Investment in Georgian Oil Company, Board Change
and Share Issues
Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company,
is pleased to announce that it has raised GBP587,500 (before
expenses) through a Subscription with institutional and private
investors through a Brokered subscription (the "Subscription") of
195,833,333 new ordinary shares of no par value each (the
"Subscription Shares") at a price of 0.3p per Subscription Share
(the "Subscription Price"). The Company, at the same time, has
agreed to invest GBP300,000 into Block Energy plc ("Block Energy"),
a NEX listed oil and gas company with interests primarily in
Georgia. The Subscription proceeds will be used to fund the
investment in Block Energy and ongoing working capital for US
operations.
Highlights
-- Subscription to raise GBP587,500 (before expenses) at a price
of 0.3p per share at a discount of 37.5% to the closing mid-market
price on 26 June 2017.
-- Issue of GBP180,000 of shares to creditors and advisors at the Subscription Price.
-- Intention for Eddie Gonzalez, Mayan's CEO, to be issued
6,666,667 new Ordinary Shares on the same terms of the
Subscription, following the publication of the Company's accounts
for the year ended 31 December 2016; such shares to be issued in
settlement of accrued salary owed to Eddie Gonzalez.
-- Ross Warner to resign from the board immediately, Charlie
Wood to become Non-executive Chairman.
-- The Subscription proceeds will allow Mayan to make an initial
investment in an exciting new oil and gas opportunity at what the
Company believes to be attractive terms, as well as provide
additional working capital for the Group.
-- Investment of GBP300,000 in Block Energy structured as follows:
o GBP90,000 equity investment via a placing of new shares at
GBP0.0085 per Block Energy Share which will result in Mayan
acquiring a 2.47% equity interest in Block Energy
o GBP210,000 via a Secured Convertible Loan Note. 10% flat
coupon with conversion to equity at a 10% discount to any price at
which Block Energy's shares are listed or admitted to trading on
any stock exchange other than NEX.
-- Block Energy is listed on the NEX Growth Market ("NEX") and
is an exploration and production company focused on the acquisition
of discovered oil fields in and around the Caucuses region, current
primary focus being in the Republic of Georgia.
-- Block Energy currently has a 38% interest (with rights to
100%) in the Norio Production Sharing Agreement ("PSA"). The Norio
Production Sharing Contract has 118.7 MMbbl STOIIP, an estimated
400 km of 2D seismic and current production of around 20bbls/d
which is expected to cover existing operational overheads.
-- Block Energy also has an option to farm-in to the 4,722.5 sq
km Block VIII licence, one of the largest oil and gas blocks in the
Republic of Georgia; this has a current 36.9 million barrels risked
resource estimate and a drill ready target.
-- Schlumberger, one of the world's largest oilfield service
companies, has recently completed an acquisition of the three
Production Sharing Contracts ("PSC") in Georgia neighbouring Block
VIII and the Norio PSA.
-- Proceeds from the Mayan investment will be used to increase
Block's interest in the Norio PSA, completion of a CPR and reserve
report and preparation for an IPO.
Details of Investment
The Equity Subscription
The Company has agreed to make a GBP90,000 equity investment via
a placing of shares at GBP0.0085 thereby giving Mayan an 2.47%
equity interest in Block Energy. Following the subscription, the
Company will have the right to appoint a director to the board of
Block Energy.
The Lending
The Company has also agreed terms to advance GBP210,000 by way
of a secured convertible loan note instrument (the "Instrument") to
fund the operation of Block Energy (the "Facility"). In accordance
with the terms of the Instrument, the Facility will accrue interest
at a rate of 10% per annum. The Facility has a long stop repayment
date of 24 months after the date of the Instrument, but is
repayable on written notice from the Company which may be issued no
earlier than 12 months after the date of the Instrument.
The Facility will automatically be converted into share capital
in Block Energy at a discounted subscription price representing a
10% reduction from the IPO Price for the shares in Block Energy at
the time of a Qualifying IPO (being defined in the Instrument as a
listing with the Main List and also AIM). If a Qualifying IPO is
not achieved within 12 months of the date of the Instrument, the
Company may elect to convert the Facility into shares in Block
Energy at a discounted subscription price representing a 10%
reduction from the 30 day VWAP for Block Energy's shares on
NEX.
The Facility will become immediately repayable upon an Event of
Default (as defined in the Instrument) and is secured by a
debenture (with fixed and floating charges) over Block Energy.
Block Energy
Block Energy also has an option to farm-in to the 4,722.5 sq km
Block VIII licence, one of the largest oil and gas blocks in the
Republic of Georgia, that has a current 36.9 million barrels risked
resource estimate and a drill ready target, which hosts the
prospective East Khavtiskhevi ("EK") onshore field. Block Energy
has an option to farm-in to the licence and earn up to a 70%
working interest in the field through the acquisition of seismic
and drilling of an appraisal well.
The Norio Oil field licence is 21sq km and has produced over 2.0
million barrels of light sweet crude to date. It is located 35km
from the centre of Tbilisi, and currently Block Energy is planning
to execute a low capex recompletion programme of existing wells and
drilling of new horizontal wells in the field to significantly
increase existing production which is currently around 20 barrels
of oil per day.
Block Energy's net assets as at 31 December 2016 were GBP81,446
and losses reported for the year ended 30 June 2016 were GBP110,774
although investors should note that these pre-date the investment
by Block Energy in its Georgian assets, as announced on 11 April
2017. As at 23 June 2017 Block Energy had a market cap of
GBP3.6million.
Norio
Norio is a 22.5 sq km onshore oil field drilled in the Soviet
era that has produced 1.9MMbbl to date and which Schlumberger in a
report dated March 2010 estimated contains 118.7 MMbbl STOIIP.
There is extensive existing data available including 400km of 2D/3D
seismic data. The PSA is valid until 2026 with optional five year
renewal and there are no minimum work programme commitments. The
current production is approximately 20bbls/d of light sweet oil
from three wells drilled in the mid/late 1970s and is currently
generating sufficient revenue to cover operational costs. The board
intends to increase this production rate to over 250 bbls/d and
move the company into free cash flow territory within six months of
the planned work programme commencing. This will be achieved by
cleaning up existing producing wells (cleaning/changing of pumps
etc.) and re-completing further existing wells utilising modern
drilling technologies, re-perforating and horizontal side tracks.
Given the shallow depths of the target zones (approximately 1,000m)
and proximity of the field to drilling equipment and transport
facilities for oil sales, the Board expects its development plan to
be efficiently rolled out to achieve a sharp increase in field
production and revenue generation. To date, development of the
Norio field has been hindered by the lack of capital and the recent
global pricing environment of oil. Breakeven oil price on
completion of the planned workovers, is believed to be sub $20
bbl.
Subscription Details, Issues of equity and Total Voting Rights
("TVR")
Issue of Shares to Creditors and Advisors
The Company has also agreed to issue 60,000,000 Ordinary Shares
at the Placing Price in settlement of GBP180,000 in adviser fees
and outstanding creditors ('Adviser Shares').
The Subscription
The Subscription is conditional on Admission and application
will be made for the Subscription Shares and the Adviser Shares,
which will rank pari passu with the existing Ordinary Shares, to be
admitted to trading on AIM (the "Admission"). It is expected that
Admission will become effective and dealings in the Subscription
Shares will commence on or around 30 June 2017.
Following the issue of the 255,833,333 Subscription and Advisor
Shares, the Company's issued share capital will consist of
338,694,909 Ordinary Shares of no par value with voting rights. No
Ordinary Shares are held in treasury at the date of this
announcement and therefore following the Admission, the total
number of Ordinary Shares in the Company with voting right will be
338,694,909.
The above total voting rights figure may be used by shareholders
as the denominator for the calculation by which they will determine
if they are required to notify their interest in, or a change to
their interest in the Company.
In addition, the Company advises that Eddie Gonzalez, Mayan's
CEO, intends to subscribe for 6,666,667 new Ordinary Shares on the
same terms of the Subscription, following the publication of the
Company's accounts for the year ended 31 December 2016. A further
announcement will be made once this is completed.
Warrants
In connection with the Placing, the Company has issued
25,433,333 warrants to its broker to subscribe for new shares in
the Company exercisable within two years from admission of the
Placing Shares at the Placing Price per share.
Commenting on the above Mayan's CEO Eddie Gonzalez said: "The
investment in Block Energy is an exciting step for the Company
offering Mayan shareholders exposure to a highly accomplished
management team, with a very attractive asset and potentially high
impact development program. The value of this investment has the
potential to dramatically increase over the coming year and I look
forward to monitoring the progress of Block Energy in the future.
The Board of Directors recognises the poor performance of the US
business over the prior 12 months and continues to make determined
progress toward resolving legacy problems as well as identify and
implement value enhancing strategies going forward.
Regarding Shoats Creek and the LM13 Shallow Well, the Company
continues to work on the well before perforation can be undertaken
and will update investors as soon as this has been completed and
the results from the planned perforation at the 710 foot level are
known."
Proposed Board Change
The Company also announces that Ross Warner, Mayan's Chairman
has notified the Company of his intention to leave the Board to
pursue his other business interests. Charlie Wood will become
non-executive Chairman, whilst a replacement for Ross Warner is
being sought.
Special note concerning the Market Abuse Regulation
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
("MAR"). Market soundings, as defined in MAR, were taken in respect
of the Subscription, with the result that certain persons became
aware of inside information, as permitted by MAR. That 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 inside information relating to the
Company and its securities.
**ENDS**
For further information visit www.Mayan energy.com or contact
the following:
+ 1 469 394
Eddie Gonzalez Mayan Energy Ltd 2008
+44 7971 444
Charlie Wood Mayan Energy Ltd 326
Beaumont Cornish +44 20 7628
Roland Cornish Ltd 3396
Beaumont Cornish +44 20 7628
James Biddle Ltd 3396
Cornhill Capital +44 20 7710
Nick Bealer Limited 9612
Notes:
Mayan Energy Limited is an AIM listed (London Stock Exchange)
oil and gas energy company; whose present operations which are
focussed on the redevelopment and enhancement of its upstream oil
and gas interests in Oklahoma and Louisiana.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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