Completion of Angostura acquisition and share subscription
President Energy completes Angostura acquisition. Photo: courtesy of skeeze from Pixabay.
President Energy (AIM: PPC), the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina, announces that, further to the announcement dated 21 October 2019, the acquisition of the Angostura exploration contract in Rio Negro Province, Argentina (the “Acquisition”) from Compania General De Combustibles S.A. (“CGC”) has successfully completed alongside the agreement for subscription for US$1.825 million of new ordinary shares (“Ordinary Shares”) in the capital of the Company (the “Subscription”) by CGC becoming unconditional.
Acquisition
The Province of Rio Negro has granted a Decree agreeing to the Acquisition and is also extending the time period of the Exploration phase of the relevant contract for a further four years from November 2019, during which time President will receive the benefit of all revenues from this producing Block. The work commitment of approximately US$9 million, pertaining to the contract, is spread across the life of the extended contract. In the first six months this work will consist of sub-surface studies and some surface infrastructure work.
As part of the Acquisition, up to three experienced employees are being transferred to the Company and these are currently being integrated into President’s operational team at the same time as steps are being taken to capitalise on the synergies and economies of scale that have already been identified in the pre-acquisition due diligence.
Further information about Angostura can be found in the Company’s announcement dated 21 October 2019.
The Subscription
Following the completion of the Acquisition, the agreement by CGC to invest US$1.825 million in President by way of the Subscription has now become unconditional and the first tranche of the Subscription has been completed.
CGC has invested an initial sum of US$500,000, approximately £388,138.49 at an exchange rate of GBP 1:1.2882 USD being the spot rate on the day prior to completion of the Acquisition (“the Initial Subscription Amount”). To satisfy the Initial Subscription Amount, 8,722,213 new Ordinary Shares (the “Initial Subscription Shares”) have been issued to CGC at a subscription price of 4.45 pence per Initial Subscription Share, being the closing mid-market price per Ordinary Share on the day prior to the Subscription.
CGC has agreed not to dispose of any interest in the Initial Subscription Shares for a period of six months after their issue.
CGC will thereafter invest the remaining US$1.325 million of the Subscription in seven quarterly instalments in consideration for the issue of new Ordinary Shares at the prevailing middle market price on the date prior to the relevant quarter date, with the first such quarterly payment being due on 25 January 2020.
Application has been made for the 8,722,213 Initial Subscription Shares to be admitted to trading on AIM and dealings are expected to commence on 21 November 2019 (“Admission”).
The new Initial Subscription Shares will rank pari passu with the existing shares of the Company. Following Admission, the Company’s issued share capital will consist of 1,135,282,890 Ordinary Shares. Accordingly, the figure of 1,135,282,890 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA’s Disclosure Guidance and Transparency Rules.
Source: Company Press Release