TIDMMYN
RNS Number : 7447W
Mayan Energy Limited
16 November 2017
The following amendment has been made to the 'Placing,
Investment in Heavy Oil Project in Utah and Issue of Equity'
announcement released on 16 November 2017 at 7.00am under RNS No
6474W.
In the section headed 'Deloro acquiring 49% interest in Asphalt
Ridge' the last sentence of the last bullet point should have read
'Following Mayan's investment it is expected to have approximately
US$2.9million in cash and Mayan shares and no material
liabilities'. In the original announcement it read 'approximately
US$2.9million in cash' which should have been 'approximately
US$2.9million in cash and Mayan shares'
In addition, in the section headed 'The Deloro, Petroteq
Memorandum of Understanding', the last sentence should have read
'Following Mayan's investment it is expected to have approximately
US$2.9million in cash and Mayan shares and no material
liabilities'. In the original announcement it read 'approximately
US$5.3million in cash' which should have been 'approximately
US$2.9million in cash and Mayan shares'.
All other details remain unchanged.
The full amended text is shown below.
Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 /
Sector: Oil and Gas
16 November 2017
Mayan Energy Ltd ("Mayan" or "the Company")
Placing, Investment in Heavy Oil Project in Utah and Issue of
Equity
Mayan (AIM: MYN), the AIM listed oil and gas company, is pleased
to announce that it has raised GBP 2,000,000 (before expenses) via
an oversubscribed Placing with institutional and private investors
(the "Placing") of 333,333,333 new ordinary shares of no par value
each (the "Placing Shares") at a price of 0.6p per share (the
"Placing Price"). The Placing was arranged by Mayan and Novum
Securities Limited and the Placing Price represents a premium of
60.5% to the Company's 30 day VWAP. At the same time Mayan has also
agreed to issue 30,192,305 Ordinary Shares at the Placing Price in
settlement of adviser fees and outstanding creditors ('Adviser and
Settlement Shares').
In addition, Mayan has agreed to invest US$1,505,000 (the
"Investment") into Deloro Energy LLC ("Deloro"). The investment is
to be effected by way of US$ 1,005,000 paid from the proceeds of
the Placing, and US$500,000 settled by way of 64,102,564 Ordinary
Shares at the Placing Price (the "Deloro Investment Shares").
Deloro, is a newly formed private company which has been
established to acquire a 49% interest in the Asphalt Ridge heavy
oil project in Utah, USA ('Asphalt Ridge') which is being 'spun
out' of TSX listed Petroteq Energy Inc ("Petroteq").
In total 432,692,304 Ordinary shares will be issued at the
Placing Price, and it is expected that Admission will become
effective and dealings in the Placing, Deloro Investment Shares,
Adviser and Settlement Shares will commence on or around 22
November 2017.
Other than the investment in Deloro, the proceeds of the Placing
will provide working capital for the Company's US operations where
an ongoing development programme is successfully underway,
targeting an initial near term 300-500 bopd (net to Mayan) across
its existing onshore assets.
Investment Highlights
Asphalt Ridge: a 2,230 acre heavy oil project with significant
resources and near-term development potential
-- 87 Million Stock Tank Barrels ("STB") contingent resource in place
-- Highly attractive economics/Net present Values- ("NPV") both
at discount rates of 5% (NPV5) and 10% (NPV10), as determined by
Chapman Petroleum Engineering in their Nov 2017 Contingent Resource
report:
o $107m pre-tax NPV5 (post tax NPV5: US$73m) low estimate
(1,000bopd)
o $269m pre-tax NPV5 (post tax NPV5: US$187m) best estimate
(2,500bopd)
o $557m pre-tax NPV5 (post tax NPV5: US$399m) high estimate
(5,000bopd)
o $55m pre-tax NPV10 (post tax NPV10: US$35m) low estimate
(1,000bopd)
o $135m pre-tax NPV10 (post tax NPV10: US$90m) best estimate
(2,500bopd)
o $280m pre-tax NPV10 (post tax NPV10: US$196m) high estimate
(5,000bopd)
-- Defined development programme to rapidly increase production
utilising the existing Asphalt Ridge plant, Petroteq's patented
processes (49% of which is being acquired by Deloro) and Deloro's
proprietary technology:
o 1,000 barrels oil per day ("bopd") targeted by February
2018;
o 5,000+ bopd targeted for 2019 -expansion to 2,500bopd and
5,000 bopd expected to be largely debt funded;
o 6 months continuous production at 1,000 bopd triggers upgrade
of a materially significant portion of the existing 87 MMSTB
Contingent resources to P1/P2 reserves.
-- Low cost/high margins: anticipated all in costs of US$18-25
per barrel ("Bbl") expected to generate netback margins of US$15-20
per Bbl (at US$45 Bbl oil);
Deloro acquiring 49% interest in Asphalt Ridge
-- Deloro has entered into an MOU with Petroteq to acquire a 49%
interest in the Asphalt Ridge project for a total consideration of
US$10million, in the form of convertible loan notes, payable as
follows:
o Tranche 1: US$2.5million due immediately to fund completion of
plant upgrades and start-up of initial production;
o Tranche 2: US$3.5million due once plant is operating at
greater than 1,000 bopd for more than 30 days and
o Tranche 3: US$3.95million due on or before by 1 June 2018.
-- Petroteq and Deloro will enter into a Joint Operating
Agreement in due course and Petroteq will retain operatorship of
the Asphalt Ridge project;
-- The disposal by Petroteq of its 49% interest in Asphalt Ridge
is conditional on approval by its Shareholders at a General Meeting
which is expected to be convened following completion of Tranche 3
of the funding as detailed above; Mayan will update investors once
this has been completed.
-- As a newly formed "specific purpose investment vehicle",
Deloro has no historic turnover or losses. Following Mayan's
investment it is expected to have approximately US$2.9million in
cash and Mayan shares and no material liabilities.
Mayan acquiring an effective 8.3% interest in Asphalt Ridge via
investment in Deloro
-- Mayan has agreed to acquire an interest of 17.6% in Deloro
for US$1.5005million, payable as follows:
o Acquisition of US$1,005,000 worth of 350 new Deloro units
being issued at US$4,300 per Deloro unit; and
o Acquisition of new Deloro units being issued at US$4,300 per
Deloro unit, in exchange for the issue of US$500,000 of Mayan
shares issued to Deloro at the Placing price (the "Deloro
Investment Shares ") and subject to a three month lock in period,
expiring 31 January 2018.
-- Deloro will use the US$1.5005m invested by Mayan along with
money raised from other third parties to fund the Tranche 1 and
part of the Tranche 2 payments in respect of Deloro's acquisition
of a 49% interest in and plant expansion of Asphalt Ridge
-- Intention to rollout both locally and globally Petroteq's
patented process technology, which is proven to unlock heavy oil
without generating greenhouse gases or waste
o A number of suitable deposits already identified
Issue of Equity to Creditors, Advisors and Directors
-- Issue of 30,192,305 Ordinary shares to creditors to settle
amounts owed and certain advisors at the Placing Price (the
"Settlement Shares")
-- In addition, it is proposed to issue 5,064,102 new Ordinary
Shares to two Directors at the Placing price (the "Deferred
Settlement Shares"); such shares to be issued in settlement of
accrued salary owed. A further announcement will be made once this
has been completed.
Eddie Gonzalez, Managing Director, said: "With a programme at
Asphalt Ridge to commence production of 1,000 bopd gross by
February 2018, the Asphalt Ridge investment is in line with our new
strategy of acquiring interests where production can be
significantly enhanced by applying the advanced techniques,
technologies and experience that are now available to us. Thanks to
a US$269m pre-tax NPV5 best estimate, Mayan's 8.3% interest in the
Asphalt Ridge project will provide significant asset backing to
Mayan from the outset and we believe this will increase going
forward as Asphalt Ridge production milestones are met. Together
with activities across our existing asset base in Texas and
Oklahoma -where we are targeting an initial increase in production
of 300-500bopd (net to Mayan)- the next few months will not be
short of high impact value trigger events, and I look forward to
providing further updates on our progress."
Related Party Transaction
Eddie Gonzalez and Charlie Wood, respectively Chief Executive
Officer and Chairman of Mayan, each presently have an interest of
17.1% in Deloro while David Kahn, an 11.36% shareholder in Mayan,
also is a 17.1% shareholder in Deloro. As such Mayan's investment
in Deloro constitutes a related party transaction in accordance
with AIM Rule 13. Accordingly, JD McGraw, a Non-Executive Director
at Mayan, who is independent of the Deloro investment, having
consulted with the Company's Nominated Adviser, considers the terms
of the investment to be fair and reasonable insofar as Mayan's
shareholders are concerned. In forming this opinion, JD McGraw has
taken into account the conclusions of an independent valuation
report prepared by Chapman Petroleum Engineers on Deloro, and in
particular the NPV10 of the Asphalt Ridge Project and the synergies
with Mayan's existing business this investment is expected to
exploit. Further reassurance also comes from an independent
valuation report which values Mayan's stake in Deloro in a range of
US$ 3.4 - 4.2 million.
Placing Details, Issues of equity and Total Voting Rights
("TVR")
The Placing
Mayan has raised gross proceeds of GBP2,000,000 through the
placing of 333,333,333 Ordinary Shares at the Placing Price. The
Placing is conditional on Admission and application will be made
for the Placing Shares, which will rank pari passu with the
existing Ordinary Shares, to be admitted to trading on AIM (the
"Admission").
Issue of Shares to Creditor and Advisors
Mayan has also agreed to issue 30,192,305 Ordinary Shares at the
Placing Price in settlement of GBP 181,154 in adviser fees and
outstanding creditors (the 'Settlement Shares').
Issue of Shares to Deloro (the "Deloro Investment Shares")
Mayan has also agreed to issue 64,102,564 Ordinary Shares at the
Placing Price in settlement of the remaining investment of US$
500,000 (GBP 384,615) in Deloro.
It is expected that Admission will become effective and dealings
in the Placing Shares, Consideration Shares, Deloro Investment
Shares and Settlement and Adviser Shares will commence on or around
22 November 2017. The Deloro Investment Shares are subject of a
three month lock in period, expiring 31 January 2018.
Warrants
In connection with the Placing, Mayan has issued 23,333,333
warrants to subscribe for new shares in Mayan to two direct placees
and the Brokers, and these are exercisable at the Placing Price
within two years from admission of the Placing Shares.
Share Capital and Total Voting Rights ("TVR")
Following the issue of the 432,692,304 Placing, Settlement and
Adviser and Deloro Investment Shares Mayan's issued share capital
will consist of 1,166,335,931 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 Mayan with voting right will be
1,166,335,931.
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.
The Deloro, Petroteq Memorandum of Understanding
-- Deloro is a newly formed private company which has entered
into an MOU with Petroteq Deloro has entered into a joint venture
arrangement with Petroteq under which Deloro will invest in a
project that:
o holds the right to explore, mine, extract, product and sell or
dispose of oil sands, bitumen, asphalt and other hydrocarbon
substances and minerals in and within certain lands and properties
situated in Uintah County, State of Utah, in the United States
("the Asphalt Ridge project") that comprises: 250 bopd plant &
equipment; 87 MMSTB's of contingent reserves; and intellectual
property relating to the processing and extraction technology and
land title; and
o owns an oil sands processing facility, having a processing
capacity of 250 bopd;
-- and subject to the investment of an aggregate amount in
stages of US$10m by Deloro, it will earn up to a 49% interest in
the Asphalt Ridge project in the form of convertible loan notes,
payable as follows:
o Tranche 1 of US$2.5million due immediately to fund completion
of plant upgrades and start-up of initial production;
o Tranche 2 of US$3.5million due once plant for more than 30
days is operating at greater than 1,000 bopd, and
o Tranche 3 of US$3.95million due on or before by 1 June
2018.
-- Petroteq and Deloro will enter into a Joint Operating
Agreement in due course and Petroteq will retain operatorship of
the Asphalt Ridge project;
The disposal by Petroteq of its 49% interest in Asphalt Ridge is
conditional on approval by its Shareholders at a General Meeting
which is expected to be convened following completion of Tranche 3
of the funding as detailed above.
As a newly formed "specific purpose investment vehicle", Deloro
has no historic turnover or losses. Following Mayan's investment it
is expected to have approximately US$2.9million in cash and Mayan
shares and no material liabilities.
The Mayan Deloro Investment Agreement
-- Mayan has agreed to acquire an interest of 17.6% in Deloro
for US$1.5million, payable as follows:
o Acquisition of US$1,005,000 worth of 350 new Deloro units
being issued at US$4,300 per Deloro unit; and
o Acquisition of Deloro units of new Deloro units being issued
at US$4,300 per Deloro unit, in exchange for the issue of
US$500,000 of Mayan shares issued to Deloro at the Placing price
(the "Consideration Shares") and subject to a three month lock in
period, expiring 31 January 2018.
-- Deloro and Mayan have provided certain representations and
warranties relating to the Investment.
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 Placing, 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 Mayan and its
securities.
**ENDS**
For further information visit www.mayanenergy.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 focussed on the redevelopment and
enhancement of its upstream oil and gas interests in Oklahoma and
Texas.
Technical sign off
All of the technical information, including information in
relation to reserves and resources that is contained in this
announcement has been reviewed by, Mr Stephen Brock. Mr Brock is a
petroleum engineer who is a suitably qualified person with over 30
years' experience in assessing hydrocarbon reserves and has
reviewed the release and consents to the inclusion of the technical
information.
The Technical information prepared by Chapman Petroleum
Engineering as referred to in this announcement has been prepared
in accordance with the standards set out in the Canadian Oil and
Gas Evaluation Handbook ("COGEH") and the report has been prepared
and/ or supervised by a "Qualified Reserves Evaluator" under NI
51-101.
Technical Glossary
Bopd: means barrels of oil per day. There are 42 gallons
(approximately 159 litres) in one barrel of oil, which will contain
approximately 5.8 million British Thermal Units.
EUR: Estimated ultimate recovery is an approximation of the
quantity of oil or gas that is potentially recoverable or has
already been recovered from a reserve or well.
MMSTB: Millions of Stock Tank Barrels of oil- oil volume at 60
Fahrenheit and 14.65 pound per square inch absolute ("psia").
NPV5 and NPV10: Net present value is the present value of an
investment's expected cash inflows minus the outflows as discounted
at a specific discount rate or cost of capital. NPV5 is an NPV
estimate determined using a 5% cost of capital. NPV10 is an NPV
estimate determined using a 10% cost of capital.
Workover: The process of performing major maintenance or
remedial treatments on an oil or gas well. In many cases, workover
implies the removal and replacement of the production tubing string
after the well has been killed and a workover rig has been placed
on location. This operation saves considerable time and
expense.
WTI: West Texas Intermediate is the common reference price for
comparisons of crude oil prices.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEALFKFEEXFFF
(END) Dow Jones Newswires
November 16, 2017 09:03 ET (14:03 GMT)
Mayan Energy (LSE:MYN)
Historical Stock Chart
From Apr 2024 to May 2024
Mayan Energy (LSE:MYN)
Historical Stock Chart
From May 2023 to May 2024