17th Apr 2015 13:20
LONDON (Alliance News) - Forum Energy PLC Friday said it is considering an application to cancel the trading of its shares on London's AIM, a development that comes following the suspension of all exploration work on its Service Contract 72 in early March.
Prior to the announcement, Forum's shares traded as high as 26.94 pence on Friday, with the stock up by more than a third in the week. But the stock fell by 18% to 20 pence following the announcement of the work suspension, the same price that could be offered to minority shareholders in the company under a potential deal to allow them to exit their holdings before cancellation.
The company said it has been considering ways of enabling minority shareholders to sell their shares before cancellation takes effect.
However, Forum Energy is unable to make a tender offer for the share because it has negative reserves. It is mulling over alternatives and is currently in talks with Philex Petroleum Corp, which has a 60.57% stake in the company, in an effort that could potentially result in the major shareholder making an offer to minority investors.
Philex is currently considering whether such an offer will be made and there is no certainty that such an offer will be made. However, Philex has indicated to the company that, were such an offer to be made, Philex would offer minority shareholders cash consideration of 20 pence per share," Forum Energy said.
On March 2, Forum Energy announced the suspension of exploration work on its Service Contract 72 due to a dispute between the Philippines and China.
The Philippine Department of Energy has suspended operations on Service Contract 72 because the contract area falls within a disputed area of the West Philippine Sea.
Service Contract 72 is an offshore licence which contains the Sampaguita gas field as well as several oil and gas leads, with Forum holding a 70% interest in the license.
By Samuel Agini; [email protected]; @samuelagini
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