20th Jul 2006 09:39
Cambrian Oil & Gas PLC20 July 2006 Cambrian Oil and Gas plc ("COIL" or the "Company") Investment in Methanol Australia Limited Placing of New Ordinary Shares Related Party Transaction Ongoing Business Update 20 July 2006 The Directors of Cambrian Oil and Gas plc ("COIL" or the "Company"), the AIMquoted oil and gas exploration and production company, are pleased to announcethe following developments in the Company. Investment in Methanol Australia Limited The Company has reached agreements to investment in Methanol Australia Limited("Methanol Australia"). Methanol Australia (ASX: MEO) is an Australian companylisted on the Australian Stock Exchange (the "ASX"). The business of MethanolAustralia is principally its 50 per cent. interest in the Tassie Shoal MethanolProject and its 100 per cent. interest in the Timor Sea LNG Project. For the six month period ended 31 December 2005, Methanol Australia announced on17 March 2006 a loss of approximately A$653,000 and net assets as at 31 December2005 of approximately A$1,245,000. Under ASX reporting requirements, on 27 April2006 Methanol Australia reported a Mining Exploration Entity Quarterly Report,Appendix 5B, where it reported, inter alia, cash at the end of the quarter ended31 March 2006 of approximately A$2,681,000. The shares of Methanol Australia were suspended on 18 July 2006 pending therelease of an announcement to the ASX. The shares recommenced trading on 20 July2006 following the release of the announcement to the ASX concerning businessdevelopments in Methanol Australia (the "ASX Announcement"). The ASXAnnouncement is reproduced in full below under the heading "ASX Announcement". In the ASX Announcement, Methanol Australia announced that COIL had acquiredapproximately 5.5 million ordinary shares from the trustee of MethanolAustralia's Share Trustee Scheme for A$1.1 million (approximately £450,000) toacquire a 3.9 per cent. holding in Methanol Australia. Further Business Developments In the ASX Announcement, Methanol Australia announced that it was effecting aplacing of up to 10 per cent. of Methanol Australia's issued share capital,seeking to raise up to A$3.15m. COIL is intending to subscribe for all of theordinary shares to be issued pursuant to the proposed placing. Following thissubscription, COIL will hold 19,500,000 ordinary shares in Methanol Australia,representing 12.6 per cent. of the issued share capital. Also in the ASX Announcement, Methanol Australia announced that it is effectinga further fundraising in which its shareholders will be entitled to purchase newordinary shares pro-rata to their existing shareholding in a ratio of 1 newordinary share for every four held at a price of 22.5 cents. It is anticipatedthat this fundraising will raise proceeds for Methanol Australia ofapproximately A$8.7 million. For each new ordinary share subscribed, MethanolAustralia will grant a warrant for 1 new ordinary share exercisable at anexercise price of 25 cents for the period up to 30 April 2007. COIL intends tounderwrite 50 per cent. of this fundraising. ASX Announcement The ASX Announcement is reproduced in full in the below Appendix. Placing of New Ordinary Shares In line with the above investment, the Company has conditionally placed up to 50million new ordinary shares of 1 pence each (the "Placing Shares") at 3 penceper ordinary share through its broker W.H. Ireland Ltd, raising £1,500,000 grossof expenses (the "Placing"). The new ordinary shares are to be issued togetherwith one warrant for each Placing Share subscribed, each warrant entitling theholder to subscribe for one ordinary share in the Company at 3 pence perordinary share (the "Warrants"). Each Warrant granted shall be exercisable inwhole or in part at any time up to 12 months from the date of admission of thePlacing Shares to trading on AIM becoming effective in accordance with the AIMRules of London Stock Exchange plc (the "AIM Rules"). The Warrants will not beadmitted to trading on AIM. As at the date of this announcement the Company has108,227,159 Ordinary Shares in issue. Assuming the Placing is fully subscribedthere will be 158,227,159 Ordinary Shares in the Company in issue. As at the date of this announcement, Cambrian Mining plc ("Cambrian Mining")holds 29,630,769 Ordinary Shares in the Company representing 27.4 per cent. ofthe issued share capital in the Company. As part of the Placing, Cambrian Miningis intending to subscribe for 15 million new ordinary shares, resulting in asmall increase in its holding to 28 per cent. of the Company, assuming thePlacing is fully subscribed. Related Party Transaction As at the date of this announcement, Cambrian Mining holds 29,630,769 ordinaryshares in the Company and is therefore is defined as a related party under theAIM Rules. The intended subscription by Cambrian Mining represents, under the AIM Rules, arelated party transaction. The Directors of the Company, other than John Byrne(who is a director of Cambrian Mining), consider, having consulted with itsnominated adviser, that the terms of the subscription is fair and reasonableinsofar as its shareholders are concerned. Ongoing Business Update The Directors consider that further funds may be required to maximise theopportunities for the Company's shareholders and, subject to market conditionsand shareholder approval, may conduct a further non-pre-emptive placing in duecourse. Enquiries: Cambrian Oil & Gas PlcAlwyn Davey 0207 409 0890Jurgen Hendrich W.H Ireland 0207 220 1666Paul Dudley Appendix The ASX Announcement is reproduced in full below: MAJOR CAPITAL RAISING TO FUND 3D SEISMIC ACQUISITION - A STRATEGY TO RETAIN 100%CONTROL OF EXPLORATION PERMIT NT/P68 MELBOURNE, AUSTRALIA (July 20, 2006) -- Methanol Australia Limited (ASX: MEO) ispleased to advise that a placement of 10% of the issued capital of the Companyhas been made at 22.5 cents per share to Cambrian Oil & Gas Plc (part of theCambrian Mining Group) to raise approximately $3.16 million. The Company hasagreed to seek shareholder approval to also grant Cambrian a one for one optionexercisable at 25 cents by April 2007. The Company's new issued capital is154,605,115 shares. Cambrian has also acquired 5.5 million shares from thetrustee of the Company's Share Trustee Scheme by special crossing, raising anadditional $1.1 million. Cambrian Mining Plc is a London based, diversified mining house withinternational interests in coal, iron ore, metals and energy together withrelated technologies. Shareholders will be offered the opportunity to participate in the capitalraising on the same terms as the placement to Cambrian via a non-renounceablepro-rata rights issue of one (1) ordinary share at an issue price of 22.5 centsfor every four (4) shares held August 11, 2006 , which will raise approximately$8,696,500 before expenses. For each share subscribed, the Company will grantone option exercisable at 25 cents by April 30, 2007. Application will be madeto ASX for these options to be listed. Tolhurst Noall Limited has beenappointed Lead Manager and is seeking to underwrite the rights issue. The sale of Trustee shares, the placement and the rights issue will collectivelyraise approximately $13 million before expenses which will fund the acquisitionand processing of 2D and 3D seismic surveys in the Company's 100% ownedExploration Permit, NT/P68. An agreement is being finalised with PGS Australia Pty Ltd to acquire andprocess approximately 410 square kilometres of 3D seismic over the crest of theEpenarra structure in NT/P68 during September 2006 utilizing the M/V OrientExplorer. The Epenarra structure is a broad, flat anticline at the Darwin Formation levelwith a mapped closure exceeding 1,200 sq km. The estimated in place gas resource(P50) for Epenarra is 5.6 Tcf . Heron-1, drilled by ARCO in 1972, recordedseveral interpreted gas bearing zones, including a 50m fractured carbonateinterval in the lower 50m of the Darwin Formation. Studies indicate that the gasquality at this level is likely to be low in carbon dioxide with the possibilityfor attractive levels of associated condensate. The 3D seismic program is designed to identify the density, distribution andorientation of faults and fracturing within the 50m gas bearing zone intersectedby Heron-1 and determine the optimum location for an appraisal well to test theproductivity of this interval. Drilling is planned for late 2007. Subject toconfirmation by appraisal drilling, the potential gas resource could underpinthe Company's proposed LNG project. The Company has previously announced the award of a 2D acquisition contract tothe Compagnie Generale de Geophysique Group (CGG) to acquire approximately 600line kilometres of infill 2D seismic over the Blackwood lead in NT/P68, alsoduring September 2006. The new seismic data will improve the structural mappingof this lead and is expected to elevate it to Prospect and drill ready status. The Company believes NT/P68 has the potential to host a substantial gasaccumulation at Epenarra and possibly other significant accumulations that maycollectively support the future gas demands of its proposed gas processingprojects. NT/P68 has been reviewed by a number of large international companies over thepast 12 months. These reviews led to discussions ofl farmin terms and it becameclear that terms would involve the assignment of a significant interest in thepermit and did not provide certainty of gas supply to the approved methanol andLNG projects. The Cambrian Mining Group approached the Company with a fundingstrategy that allowed the Company to advance the exploration and appraisal of NT/P68 while retaining 100% of the permit.. The proposed Timor Sea LNG Project is the only new Australian LNG project thathas already received its Commonwealth environmental approvals. C.R. Hart Managing Director 20 July 2006 ABOUT METHANOL AUSTRALIA LIMITED Methanol Australia is an Australian company focusing on the development ofgas-to-liquids (GTL) projects. The company has obtained a 50 year Commonwealthenvironmental approval for both the Tassie Shoal Methanol Project and the TimorSea LNG Project. These Projects represent significant developments for Australia and would launchMethanol Australia into the forefront of commercial gas-to-liquids productionoperations. The Company proposes to install methanol production facilities on groundedconcrete gravity structures to be located on Tassie Shoal in Australian watersof the Timor Sea. Tassie Shoal is an area of shallow water immediately adjacentto the Evans Shoal gasfield and 25 km west of the Company's exploration permit,NT/P68. The shoal lies approximately 275 km north of Darwin. The proposedmethanol project would be developed in two stages, each plant designed toproduce 1.8 million tpa. The proposed LNG processing plant has been designed using Air Products DMRtechnology, and is capable of producing over 3 million tonnes of LNG per year. Gas supply for these projects could be secured from a number of adjacent gasfields. Methanol production uniquely utilises and benefits from significantamounts of carbon dioxide associated with the natural gas supply. While anumber of such gas accumulations surround the shoal, the Company's primaryfocus is to confirm commercial gas resources within its 100% owned NT/P68 permitthat could ultimately offer a primary supply to the approved GTL projects. Website:http://www.methanol.com.au ABOUT CAMBRIAN MINING PLC Cambrian Mining Plc. ("Cambrian") was established in 2002: • Headquartered in London and listed on AIM (Symbol: CBM) • 79,437,938 ordinary shares listed and 798,143 warrants and options outstanding • Basic market capitalisation of £111m as at close of business on 19 July 2006 • Cambrian reported net profits of £33.26m for the nine months ended 31 March 2006 • A dividend of 1.5p was paid in 2005 from net profits of £2.8m Cambrian is a mining finance house which identifies under-valued resourceprojects or companies and assists in their financing, structuring anddevelopment. In this sense, Cambrian is an active investor that seeksinvolvement where it is deemed necessary to appoint management teams to bestdevelop the projects or companies and to assist with the financing and marketingof their projects and production. Cambrian Mining's prime assets are investments in the international coalindustry through Western Canadian Coal Corp. (TSX / AIM: WTN) and CoalInternational Plc (AIM: CLN), in the iron ore industry through Aztec ResourcesLtd (ASX / AIM: AZR) and in gold and base metals through AGD Mining. Otherinvestments have been made in energy, energy technology and in iron-makingmaterials and technology. Cambrian's main oil and gas investment is through Cambrian Oil and Gas Plc (AIM:COIL) which has projects in the Kyrgyz Republic. These include an explorationarea over which 2D seismic is currently being recorded and which a target fordrilling is expected to be identified this year. COIL is also undertaking awater injection project in association with Kyrgyzneftegaz, the state oilcompany. Results from this project are expected shortly. Website: http://www.cambrianmining.com/ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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