13th Mar 2006 08:58
Ming Resources PLC13 March 2006 MING RESOURCES PLC Acquisition of Inke Petroleum Pty LtdProposed placing of 100,000,000 shares to raise £5,000,000Proposed change of name to Matra Petroleum plcRe-admission to trading on AIM Ming Resources plc ("Ming" or the "Company") is pleased to announce that it hasconditionally agreed to acquire the entire issued share capital of InkePetroleum Pty Ltd ("Inke Petroleum") a privately held exploration company thathas agreed to acquire the 2,297km2 Inke oil and gas concession located insouth-west Hungary ("Concession). Ming also proposes to undertake a placing of 100,000,000 shares at 5p each toraise £5,000,000, change its name to Matra Petroleum plc, and seek re-admissionto trading on AIM. The Company's chairman, Craig Burton, said "After having examined a number ofinvestment opportunities since listing in March last year, we believe that thisacquisition represents the greatest value for shareholders. The oil and gasinterests held by Inke Petroleum are extensive and highly prospective, arelocated in an area of prolific hydrocarbon discovery with established marketinfrastructure, and include targets in an advanced drill-ready stage". Following the acquisition, the Company will become a Central Europe focussed oiland gas company. Hungary is prospective for the discovery of small to mediumoil and gas fields (less than 35 million bbls of oil equivalent or 200 bcf ofgas equivalent). These opportunities are typically too small for the "Majors"and there are few mid tier companies pursuing them. Fields of this size arepotentially highly profitable in today's energy price environment. Background on the Inke Concession The Concession covers a substantial area and is one of the largest individualoil and gas concessions/permits in Hungary and is immediately bordered by anumber of other oil and gas concessions/permits. The most notable being the Inkefield ( approx. 100 bcf), the Savoly field ( approx. 14mmbbl) on the westernboundary and the Mezocsokonya field ( approx. 150 bcf) that is surrounded by theConcession. These fields and the large number of fields in the region illustratethe prolific nature of this part of the Western Pannonian Basin in Hungary andits ability to generate and trap oil and gas. Previous exploration in the Concession has generally targeted structural plays.The Company considers that the Concession is highly prospective forstratigraphic and combined stratigraphic structural plays that have beenpreviously overlooked. The application of modern seismic processing techniquesis likely to facilitate the identification of new structures and the presence ofhydrocarbon reservoirs. There is evidence to suggest that the use of moderndrilling and completion techniques will reduce the damage to reservoirs seen inprevious wells. The Concession contains a number of reported existing discoveries: Nagyatad oilfield; Somogysamon-3 gas discovery; Pat and Vese gas discoveries; and theNagyszakacsi-3 oil occurrence. Some of these discoveries appear likely to beeconomic using modern drilling and completion techniques and the current oil andgas price. The Company intends to fully evaluate the current economic potentialof these discoveries. A large amount of data has been collected over the Concession resulting frommagnetic surveys, an estimated 1,600kms of seismic and reportedly 36 wells. Atotal of 17 prognosed structures have been drilled and, even without the benefitof modern seismic, 7 oil or gas discoveries were made, with the remaining 10wells reported to have encountered hydrocarbon shows. In recent years a 110 sqkm of 3D seismic was acquired and this is currently being reprocessed by InkePetroleum. Subject to the successful completion of the Inke Petroleum acquisition, theCompany plans to drill a highly prospective target identified late last year,known as Blue Topaz 9. Drilling of this well is expected to commence in April2006. This prospect is updip of an existing gas discovery and is covered by the3D seismic recently reprocessed by Inke Petroleum. Blue Topaz 9 is a highquality target with an excellent chance of success. The Competent Person'sReport in Part 3 of the Admission Document provides a best (mid) estimate ofprospective gas resources from the Blue Topaz 9 Miocene objective of 44 bcf ofgas (with a low estimate of 25.7 bcf and a high of 67.5 bcf) and the Triassicobjective of 5.8 million bbls of oil (with a low estimate of 3.8 million bblsand a high of 8.5 million bbls). Hungary represents a favourable operating environment, with the country activelypromoting the development of its natural resources. The country also has anattractive fiscal regime, with a corporate tax rate of 16% and provisional taxrates of 2%. Within the Inke Concession, there is also a State royalty of 12%and a privately held royalty of 6%. Board Restructure and Managing Director Following re-admission to AIM the Company will have a strong Board with manyyears experience in the oil and gas sector and successful development of juniorresource companies. The new Board and management team will comprise CraigBurton, Peter Hind and Peter Gunzburg. It is intended that the Company willappoint a European based Independent Non-Executive Chairman in due course. Peter Hind will be the Company's Managing Director. Mr Hind, a qualifiedPetroleum Engineer, has extensive technical and operational background havingheld senior positions in the oil industry since 1972. Most recently he wasGeneral Manager of Business Development for Premier Oil plc. The Company and Mr Hind propose to enter into an executive service agreementwhereby Mr Hind will receive a salary of £140,000 per annum and either theCompany or Mr Hind may terminate the agreement by giving 6 months notice. Underthe terms of his appointment Mr Hind is also entitled to 5,000,000 5 yearoptions to subscribe for ordinary shares in the Company at 0.01pence each and10,000,000 5 year options to subscribe for ordinary shares in the Company at5.0pence each. The vesting of the options with Mr Hind are subject torestrictions which are set out in the Company's Admission Document. Subsequent to re-admission to AIM, Mr Burton and Mr Gunzburg will each beentitled to directors fees of £20,000 per annum. Messrs Burton and Gunzburgare entitled to resign with immediate notice and their engagement will alsoterminate immediately without any termination benefit in the event they are notre-elected as directors by shareholders. Terms of the Acquisition The Company has entered into a conditional agreement to acquire all of theissued capital of Inke Petroleum in consideration of the issue of 52,000,000shares and 32,000,000 converting shares. The converting shares convert toordinary shares on the achievement of certain milestones, namely: • The successful completion of a well and commercial production ofhydrocarbons from the Inke Concession; or • The sale of a greater than 50% interest in the Inke Concession (orpart thereof) by the Company for greater than US$4,000,000. The Acquisition is conditional on the passing of Resolutions 1 to 6 at theExtraordinary General Meeting referred to below, the Company completing acapital raising of at least £1,500,000, and on re-admission to AIM. On execution of the Acquisition Agreement, the Company paid Inke Petroleum adeposit of £250,000. In the event that the acquisition conditions are not met,this deposit will be treated as a payment by the Company for the subscription of10,000,000 Inke Petroleum shares. Based on the closing price of 4.6 pence per Ming share on 3 November 2005 (beingthe date on which trading in Ming shares was suspended to enable the Company toundertake the Acquisition), the Acquisition consideration totals £2,392,000based on the issue of 52,000,000 ordinary shares, with total potentialconsideration of £3,864,000 (assuming all converting shares are converted). In assessing the Acquisition, the Independent Directors of the Company havevalued Inke Petroleum at £5,000,000, which corresponds to 9.6p per new share tobe issued, and 5.9p per share after conversion of converting shares. Inke Petroleum was incorporated on 5 October 2005 for the purpose of acquiringthe Concession holding company, Gemstone Properties Ltd ("Gemstone"). Fromincorporation until 31 December 2005 Inke Petroleum incurred losses totaling€178,367. Gemstone and its only subsidiary company, Blue Star 95 Kft, haveacted only as holders of the Concession and as such have not returned anymaterial profits or losses in recent years. Pursuant to the AIM Rules, the acquisition will constitute a "reverse takeover"of the Company. Mr Craig Burton, a director of the Company, is also a shareholder of InkePetroleum (with interests in 8,400,000 shares and 8,400,000 converting shares),and pursuant to the AIM Rules the acquisition also constitutes a "related party"transaction. Mr Burton is also a director and shareholder of a company whichhas provided Inke Petroleum with an interest free working capital loan of A$1.3million. Based on the net asset value of the Company of 2.0p per share as at 31 December2005, the Directors (excluding Mr Burton) consider, having consulted with theCompany's nominated adviser, that the terms of the transaction are fair andreasonable insofar as its shareholders are concerned. Proposed Placing The Company proposes to undertake a Placing of 100 million new shares at 5 penceeach prior to the Extraordinary General Meeting, conditional on shareholderapproval of the acquisition of Inke Petroleum and re-admission of the Company toAIM. A minimum subscription of £3,000,000 (before expenses) will provide theCompany with sufficient working capital for at least 18 months from the date ofre-admission, and the re-admission is conditional on this minimum amount beingraised. The Company may elect to accept a maximum subscription of 160,000,000ordinary shares to raise £8,000,000. Proceeds from the placing will be used to advance exploration and evaluation ofthe Inke Concession, including the expected April 2006 drilling of the BlueTopaz-9 structure, to meet permit obligations under the Concession, as well asto supplement future working capital for the enlarged group. RPS has prepared a Competent Person's Report for the Company which indicatesthat the proposed exploration programme and budget is appropriate for theConcession. Change of name to Matra Petroleum plc The directors propose to change the Company's name to Matra Petroleum plc tobetter reflect the change in focus from an investing company to an activepetroleum company. Extraordinary General Meeting A circular comprising an Admission Document under the AIM Rules will be sent toShareholders today. This will include a Notice of an Extraordinary GeneralShareholders Meeting of the Company, the date of which will be advised, togetherwith a form of Proxy. These documents are available at: www.matrapetroleum.com Effect of the Transaction The effect of the transaction and proposed placing on the Company is summarisedin the following table: Price per placing share 5pShares on issue prior to the Acquisition and Placing 50,000,000Number of ordinary shares being issued to Inke Petroleum shareholders 52,000,000Number of converting shares being issued to Inke Petroleum shareholders 32,000,000Proposed number of Placing shares 100,000,000Proposed gross proceeds from the Placing £5,000,000Number of shares on issue following the Acquisition and Placing1 202,000,000Percentage of enlarged share capital being issued as consideration for the 25.7%Acquisition of Inke Petroleum (undiluted) (excludes converting shares)Percentage of enlarged share capital being placed (undiluted) (before converting 49.5%shares)Market capitalisation on re-admission (undiluted, post Placing at the Placing price) £10,100,000Number of shares in issue following the Placing (fully diluted)2 262,020,000 Notes: 1. Assumes no conversion of converting shares, no oversubscriptions on theplacement, and that no options are exercised. 2. The fully diluted share capital figures above are calculated on thebasis that all of the Company's outstanding issued share options are exercisedand that all outstanding converting shares are converted, with nooversubscriptions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MTA.L