Independent Oil and Gas plc

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or as to what action you should take, you should immediately consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are a resident of the United Kingdom or, if not, another appropriately authorised independent professional adviser. If you have sold or otherwise transferred all of your Ordinary Shares in Independent Oil and Gas plc, please send this document and the accompanying proxy form as soon as possible to the purchaser or transferee, or to the stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. If you have sold or otherwise transferred some (but not all) of your Ordinary Shares, please retain these documents and consult the stockbroker or other agent through whom the sale or transfer was effected. This document does not constitute a prospectus for the purposes of the Prospectus Rules of the Financial Conduct Authority nor does it comprise an admission document prepared in accordance with the AIM Rules. Accordingly, this document has not been approved by or filed with the Financial Conduct Authority, London Stock Exchange plc or any other regulatory authority. This document does not constitute or form part of any offer or invitation to sell or issue, or a solicitation of any offer to acquire, purchase or subscribe for, Ordinary Shares. Independent Oil and Gas plc (Registered in England and Wales with company number ) Notice of General Meeting and Authority to allot shares and disapply pre-emption rights You should read the whole of this document. Your attention is drawn to the letter from the Chairman in this document, recommending you vote in favour of the resolutions to be proposed at the General Meeting. Notice convening a General Meeting of the Company to be held at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London, EC3N 2SG on 22 February 2016 at 10:00 a.m. is set out at the end of this document. Shareholders will also find enclosed with this document a proxy form. To be valid, the proxy form must be signed and returned in accordance with the instructions printed on it so as to be received by the Company's registrars, Computershare Investor Services plc, at The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, United Kingdom as soon as possible but in any event no later than a.m. on 18 February The completion and posting of a proxy form or the appointment of a proxy through CREST will not preclude shareholders from attending and voting in person at the General Meeting should they wish to do so. Copies of this document will be available free of charge from the Company's registered office during normal business hours on each day (excluding Saturday, Sunday and public holidays) from the date hereof until the date of the General Meeting. Copies will also be available from the Company's website at Page 1 of 10

2 EXPECTED TIMETABLE OF PRINCIPAL EVENTS Dispatch of this document 5 February 2016 Latest time and date for receipt of proxy appointments 10:00 a.m. on 18 February 2016 General Meeting 10:00 a.m. on 22 February 2016 Notes: Unless otherwise specified, references in this document to time are to Greenwich Mean Time. The times and dates above are indicative only. If there is any change, revised times and dates will be notified to shareholders by means of an announcement through a Regulatory Information Service. DEFINITIONS The following definitions apply throughout this document, unless the context otherwise requires: "Act" the Companies Act 2006 "AIM Rules" "Board" or "Directors" "Company" and "IOG" "Conversion Price" "Existing Facilities" "General Meeting" "Group" "IOG North Sea" "LOG" the AIM Rules for Companies published by London Stock Exchange plc from time to time the directors of the Company whose names are set out on page 4 of this document Independent Oil & Gas plc (incorporated and registered in England and Wales with registered number ) whose registered office is at One America Square, Crosswall, London, EC3N 2SG 8p per Ordinary Share the existing 2.75 million and 0.8 million loan facilities from LOG as announced by the Company on 7 December 2015 and 11 December 2015 respectively the general meeting of the Company to be held at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London, EC3N 2SG on 22 February 2016 at a.m., notice of which is set out at the end of this document the Company and its subsidiary undertakings IOG North Sea Limited, a wholly-owned subsidiary of the Company London Oil & Gas Limited "LOG Loan Agreement" the conditional loan agreement dated 5 February 2015 between LOG, the Company and IOG North Sea pursuant to which a secured convertible loan facility of 10 million will be made available to the Group by LOG "New Facility" the 10 million secured convertible loan facility to be made available pursuant to the Loan Agreement Page 2 of 10

3 "Ordinary Shares" "Registrar" or "Computershare" "Resolutions" "Shareholders" "Skipper" "Transocean" "VWAP" "Weatherford" the ordinary shares of 1 penny each in the capital of the Company Computershare Investor Services plc of The Pavilions, Bridgwater Road, Bristol, BS13 8AE, United Kingdom the resolutions set out in the notice of the General Meeting at the end of this document holders of Ordinary Shares the heavy oil discovery in Block 9/21a discovered by well 9/21-2 drilled by Unocal in 1990 Transocean Drilling U.K. Limited the volume-weighted average price of an Ordinary Share as derived from the AIM Appendix to the Daily Official List of London Stock Exchange plc Weatherford Technical Services Limited Page 3 of 10

4 LETTER FROM THE CHAIRMAN Independent Oil & Gas PLC (Registered in England and Wales with company number ) Directors: Mark Routh (Chief Executive Officer and Interim Executive Chairman) Peter Young (Chief Financial Officer) Marie-Louise Clayton (Non-executive Director) Michael Jordan (Non-executive Director) Paul Murray (Non-executive Director) Registered Office: One America Square Crosswall London EC3N 2SG 5 February 2016 Dear Shareholder, Notice of General Meeting and Authority to allot shares and disapply pre-emption rights Introduction I am writing to you to give notice of a general meeting of the Company to be held at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London EC3N 2SG on 22 February 2016 at a.m., formal notice of which is set out at the end of this document. Further to the Company's announcement of 13 January 2016, it was announced earlier today that the Company has entered into a conditional loan agreement with LOG for the provision of a secured convertible loan to the Group for an aggregate amount of up to 10 million. The terms of the Loan Agreement are consistent with the announcement of 13 January 2016 save that, on account of the continuing commodity price environment, loans drawn under the New Facility may be converted at a price of 8 pence per share. The issue of Ordinary Shares pursuant to the LOG Loan Agreement is subject to Shareholder approval. The purpose of this document is to explain the background to the Resolutions and to convene the General Meeting. Secured Convertible Loan Facility and Amendments to Existing Facilities Pursuant to the Loan Agreement, LOG has conditionally agreed to make a secured convertible loan facility of up to 10 million available to IOG North Sea. Loans drawn down pursuant to the New Facility will carry a coupon of LIBOR + 9%, with accrued interest capitalised monthly and added to the principal of the loan. The principal and accrued interest in relation to any tranche of the New Facility that is drawn down is repayable on the date that is 36 months after the date of drawdown of the relevant tranche. LOG may at its sole discretion elect to extend the maturity date of a tranche by up to 12 months. However, interest will not accrue during the period of this extension. The New Facility is secured against IOG s assets and, subject to Shareholder approval at the General Meeting, loans drawn down and accrued interest will be fully convertible at any time following the drawdown of each tranche at LOG s election into Ordinary Shares at a conversion price of 8p per Ordinary Share. This New Facility is in addition to the existing 2.75 million and 0.8 million loans from LOG, as announced on 7 December 2015 and 11 December 2015 respectively and will rank behind those loans in terms of security. The Company has also today made certain amendments to the Existing Facilities in order to permit IOG North Sea to draw down amounts in tranches and for such sums to be used for general working Page 4 of 10

5 capital purposes in instalments of up to 100,000 (between the two Existing Facilities and less amounts drawn down under the New Facility for G&A and licence fees) each month. Any amounts drawn down under the Existing Facilities will now be repayable 36 months after draw down rather than on 31 December As at the date of this announcement no amounts have been advanced pursuant to the Existing Facilities. Of the New Facility, 3 million may be drawn down in equal instalments of 100,000 (less amounts drawn under the Existing Facilities) each month, to be used to specifically cover G&A and licence fees for the next 30 months, ensuring the Company will be fully funded for general purposes until mid A further 7 million of the New Facility may be drawn down subject to certain conditions precedent and at LOG s sole election to be used specifically to finance business strategy. As of this date of this circular, a total of 40,000 has been advanced that will be treated as being drawn under the New Facility. IOG North Sea can draw down further amounts of up to 160,000 in aggregate prior to the General Meeting to satisfy outstanding commitments. The drawdown of any additional amounts pursuant to the New Facility is subject to the satisfaction of certain conditions precedent including the approval of all Resolutions at the General Meeting and approval from certain creditors and contractors who have been requested to allow extensions to the timings of the available funding for the Skipper appraisal well and the ultimate repayment dates. In the event of Shareholder approval not being granted at the General Meeting any sums draw down under the New Facility would become immediately repayable. The draw down of additional amounts (in excess of 160,000 in aggregate) under the Existing Facilities also requires the consent from certain creditors. To the extent that the New Facility has not been drawn in full at the end of the availability period, being 31 July 2018, LOG may require IOG North Sea to draw down the balance of the New Facility, provided that LOG also undertakes to immediately convert such amount into Ordinary Shares at the Conversion Price. For such time as any loan under the New Facility remains outstanding, LOG has the right under the Loan Agreement to nominate two directors to the Board. As announced earlier today, Martin Ruscoe is LOG's initial nomination to the Board and a further appointment is expected to be announced in due course. In addition, LOG has the right to nominate a non-director observer to the Board. As regards the conditions precedent relating to the consents from existing creditors and suppliers, Transocean has already agreed to terminate the existing rig contract without penalty and IOG has committed to use a Transocean rig for the subsequent Skipper appraisal and development wells. Baker Hughes has also agreed to delay the provision of their services for the Skipper appraisal well and will also work with IOG on the Skipper development wells. Discussions with other parties are progressing well. Amendments to Weatherford Arrangements In the context of this New Facility, Weatherford has agreed, subject to finalising documentation, to extend the maturity date of its outstanding loan of approximately US$2 million until 20 December As consideration for this extension, the exercise price for Weatherford s 500,000 existing warrants will be reduced from 32p to 8p per share and the period in which these warrants are exercisable will be extended to 31 March The interest rate on Weatherford's loan will remain at 9% per annum for Interest will be rolled up and will become payable at the end of If the loan has not been paid by the end of 2016 the interest rate will increase to 12% per annum and will be payable quarterly. If during 2016 Brent crude closes above US$40/bbl for 30 consecutive days, 50% of the outstanding principal and accrued interest of the loan owed to Weatherford will become payable at the end of 2016 and if prices exceed $50/bbl for 30 days the balance will also be paid at the end of If these prices are not exceeded in 2016 and during 2017 Brent crude closes above US$40/bbl for 30 consecutive days, 50% of the outstanding principal and accrued interest Page 5 of 10

6 owed to Weatherford would become payable within 30 days and if prices exceed $50/bbl for 30 days the balance of the outstanding principal and accrued interest would also be payable within 30 days. AGR Share Payment Further to the Company s announcement on 9 December 2015 and the resolutions approved by Shareholders at the general meeting on 29 December 2015, IOG confirms that it is issuing Ordinary Shares to AGR Well Management to settle invoices relating to the full Skipper well planning which has been completed. The total cash sum to be settled is 641,514 inclusive of VAT, and accordingly the Company has today issued 9,945,953 Ordinary Shares at a price of 6.45p per Ordinary Share, being the VWAP over the period that the work was done. The Company has therefore applied to the London Stock Exchange for admission of 9,945,953 new Ordinary Shares to trading on AIM and such admission is expected to occur on 11 February Following the issue of the shares to AGR Well Management there will be 89,108,637 Ordinary Shares in issue. Directorate Changes The Company is delighted to announce the appointment of Martin Ruscoe as a Non-Executive Director, further strengthening the Board. Martin Ruscoe is currently a Director at London Group Limited and has over 40 years experience in the financial services industry. Martin initially worked for a top 20 life office for 25 years, the last nine years as Chief Investment Officer involved in all forms of investment, taxation and new product development within the company. Martin is currently a Non-Executive Director at Surrey Save Credit Union, London Oil & Gas and Modular Airspace Systems. As part of the restructuring of the Company s Board, Marie-Louise Clayton has chosen to step down as a non-executive director in order to concentrate on other activities. As noted above, LOG also has the right to appoint an additional director to the Board whilst the loan funding remains outstanding. A further appointment is expected to be announced in due course. Management Changes Eric Bosshard is joining IOG in a part time role as Technical Advisor to the Board. He is currently President and Technical Director at LOG and has over 40 years of international experience across the oil and gas sector. Eric has a PhD in Geophysics from Imperial College. He has been active in the international oil and gas industry for over 40 years, eight years of which as Executive Director of Carless PLC, a UK oil and gas public company with activities in both upstream and downstream oil sectors in the UK and the USA. Prior to Carless Eric worked for Shell International in Asia, Europe, Africa and Australia in the upstream oil sector. Clint Redman is joining IOG in a part time role as Head of Corporate Finance. He is currently Head of Corporate Finance with LOG. Clint has worked in the investment banking industry for 35 years covering a wide range of markets from equities through to financial futures. Clint has worked across the globe from Tokyo to New York for some of the world s largest investment banks which include Goldman Sachs, Oppenheimer, Drexel Burnham and Lehman Brothers and brings a wealth of knowledge and contacts. General Meeting You will find at the end of this document a notice convening a general meeting to be held at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London, EC3N 2SG on 22 February 2016 at a.m. to consider and, if thought appropriate pass Resolutions to authorise the Directors: Page 6 of 10

7 (a) (b) to allot shares or grant rights to subscribe for or to convert any security into shares pursuant to section 551 of the Act up to an aggregate nominal amount of 1,387,500 in connection with the conversion of Loans pursuant to the LOG Loan Agreement; and to dis-apply pre-emption rights pursuant to section 571 of the Act in relation to the issue of such shares. Action to be taken in respect of the General Meeting You can vote in respect of your shareholding by attending the General Meeting or by appointing one or more proxies to attend the meeting and vote on your behalf. If you appoint a proxy, you may still attend and vote at the General Meeting in person should you decide to do so. Whether or not you propose to attend the General Meeting in person, you are requested to appoint a proxy who will be able to vote for you if you are prevented from attending. Proxies may be appointed by either: completing and returning the enclosed proxy form; or using the CREST electronic proxy appointment service (for CREST members only). In either case, the notice of appointment of a proxy should reach Computershare at The Pavilions, Bridgwater Road, Bristol, BS99 6ZY by no later than a.m. on 18 February Please refer to the Notes to the Notice of General Meeting starting on page 9 and the enclosed proxy form for detailed instructions. The attention of Shareholders is drawn to the voting intentions of the Directors set out below. Shareholders are reminded that in the event that the Resolutions are not passed any of the initial 200,000 drawn down pursuant to the New Facility would be immediately repayable. In such an event, the Company would be unable to make such repayment. Accordingly, the Company would need to refinance, potentially from alternative sources, or renegotiate the terms of the New Facility. There can be no guarantee that any refinancing or renegotiation would be possible. It is therefore of the utmost importance that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting. If the Resolutions are not passed, there can be no assurance that the Company will be able to continue as a going concern. Recommendation The Directors believe that the entry into the LOG Loan Agreement will promote the success of the Company for the benefit of its Shareholders as a whole. Accordingly, they unanimously recommend you to vote in favour of the Resolutions to be proposed at the General Meeting. The Directors have each undertaken to vote in favour of all of the Resolutions in relation to their shareholdings, amounting to (in aggregate) 28,776,306 Ordinary Shares, representing approximately per cent of the current issued share capital of the Company. Additional large shareholders are also expected to provide irrevocable undertakings to vote in favour of the resolutions in due course. Yours sincerely Mark Routh Chief Executive Officer and Interim Executive Chairman Page 7 of 10

8 Independent Oil & Gas PLC (Registered in England and Wales with company number ) NOTICE OF GENERAL MEETING NOTICE IS HEREBY GIVEN that a General Meeting of Independent Oil & Gas PLC (the "Company") will be held at a.m. on 22 February 2016 at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London, EC3N 2SG, United Kingdom. The business of the meeting will be to consider and, if thought appropriate, to pass the following ordinary and special resolutions: 1. ORDINARY RESOLUTION THAT, in addition to all authorities to allot shares currently in force, the directors of the Company (the Directors ) be and are hereby specifically authorised pursuant to and for the purposes of section 551 of the Companies Act 2006 (the Act ) to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company ( Rights ) up to an aggregate nominal amount of 1,387,500 in connection with the issue of ordinary shares of 1p each in the Company ("Ordinary Shares") pursuant to a loan agreement dated 5 February 2016 between the Company, IOG North Sea Limited and London Oil and Gas Limited (the "Loan Agreement") provided that this authority shall expire at the conclusion of the Company s annual general meeting to be held in 2016 save that the Company may make an offer or agreement before the expiry of this authority which would or might require shares to be allotted or Rights to be granted after such expiry and the Directors may allot shares or grant Rights pursuant thereto as if the authority conferred hereby had not expired. 2. SPECIAL RESOLUTION THAT the Directors be empowered pursuant to section 571 of the Act to allot equity securities (as defined in section 560 of the Act) for cash pursuant to the specific authority conferred on them by resolution 1 as if section 561 of the Act did not apply to the allotment of Ordinary Shares pursuant to the Loan Agreement. This authority shall expire, unless previously revoked or renewed by the Company, at the conclusion of the Company s annual general meeting to be held in 2016 except that the Company may before such expiry make any offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred by this resolution had not expired. BY ORDER OF THE BOARD Ben Harber Company Secretary Registered Office: One America Square Crosswall London EC3N 2SG 5 February 2016 Page 8 of 10

9 Notes to the Notice of General Meeting: Entitlement to attend and vote 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended), the Company specifies that only shareholders entered on the register of members of the Company at a.m. on 18 February 2016 (or in the event that this meeting is adjourned, on the register of members 48 hours preceding the date fixed for the adjourned meeting, excluding non-business days) shall be entitled to attend and vote at the meeting in respect of the number of ordinary shares of the Company registered in their name at that time. Changes to the register after the relevant time shall be disregarded in determining the rights of any person to attend and vote at the meeting. Appointment of proxies 2. A shareholder is entitled to appoint one or more proxies to exercise all or any of his or her rights to attend and to speak and vote at the meeting. A proxy need not be a shareholder of the Company. A shareholder may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. 3. The appointment of a proxy will not preclude a shareholder from attending in person at the meeting and voting if he or she wishes to do so. Appointment of proxy using the accompanying proxy form 4. A proxy form is enclosed. To appoint more than one proxy, please photocopy the form. Please state each proxy's name and the number of shares in relation to which each proxy is appointed (which, in aggregate, should not exceed the number of shares held by you) in the boxes indicated on the form. Please also indicate if the proxy form is one of multiple forms being returned. All proxy forms must be signed and should be returned together in the same envelope. In the case of joint shareholders, the signature of any one of them will suffice, but the names of all joint holders should be stated. 5. To be valid, a duly completed proxy form and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be delivered by hand or sent by post to the offices of the Company's registrars, Computershare at The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, United Kingdom, so as to be received not less than 48 hours (excluding non-business days) before the time fixed for the holding of the meeting or any adjournment of the meeting (as the case may be). Appointment of proxy through CREST 6. CREST members who wish to appoint a proxy or proxies for the meeting, including any adjournments of the meeting, through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual (available via CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 7. In order for a proxy appointment made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's ("Euroclear") specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by Company s agent (ID 3RA50) no later than 48 hours (excluding non-business days) before the time fixed for the holding of the meeting or any adjournment of the meeting (as the case may be). For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Company s agent (ID 3RA50) is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 8. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular message. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member, or has appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. 9. The Company may treat a CREST Proxy Instruction as invalid in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations Changing proxy instructions 10. To change your proxy instructions, simply submit a new proxy appointment using one of the methods set out above. Note that the cut-off time for receipt of proxy appointments also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. If the Company receives more than one Page 9 of 10

10 appointment of a proxy in respect of any one share, the appointment received last revokes each earlier appointment and the Company's decision as to which appointment was received last is final. Termination of proxy appointments 11. In order to revoke a proxy appointment you must notify the Company of the termination at least 48 hours (excluding nonbusiness days) before the commencement of the meeting. Joint shareholders 12. In the case of joint shareholders, the vote of the senior who tenders a vote, whether in person (including by corporate representative) or by proxy, shall be accepted to the exclusion of the votes of the other joint shareholders. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members. Corporate representatives 13. A corporation which is a shareholder may, by resolution of its directors or other governing body, authorise one or more persons to act as its representative at the meeting. Corporate representatives should bring with them to the meeting: (i) an original or certified copy of the resolution authorising them; or (ii) an original letter on the shareholder's letterhead, signed by an authorised signatory, confirming that they are so authorised. Communication 14. Shareholders who have general queries about the meeting should use the following means of communication (no other methods of communication will be accepted): (a) calling Computershare's shareholder helpline on (calls to this number cost the usual network provider's cost) or from overseas on (charged at the applicable international rates). Lines are open from 8.30 a.m. to 5.30 p.m. on business days (i.e. Monday to Friday but excluding public holidays); or (a) in writing to the Company by to mark.routh@independentoilandgas.com and peter.young@independentoilandgas.com 15. You may not use any electronic address provided in this notice of general meeting or in any related documents (including the accompanying proxy form) to communicate with the Company for any purposes other than those expressly stated. Page 10 of 10