29th Apr 2005 07:01
Dyon UK Limited29 April 2005 NOT FOR RELEASE UNTIL 07.00 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN 29 April 2005 RECOMMENDED PROPOSAL FOR THE ACQUISITION OF EDINBURGH OIL & GAS PLC • The boards of Edinburgh Oil & Gas plc ("EOG") and Dyon UK Limited ("Dyon") announce their agreement on the terms of a recommended cash acquisition of EOG by Dyon which is expected to be effected by means of a scheme of arrangement under section 425 of the Companies Act. • Under the terms of the Acquisition, Scheme Shareholders will be entitled to receive 317 pence per Scheme Share in cash. On this basis, the terms of the Acquisition value the entire existing issued ordinary share capital of EOG at approximately £132.8 million. • Dyon is a newly incorporated company, jointly owned by Oranje-Nassau E&P and Dyas UK, formed for the purpose of making the Proposal and the Acquisition. Oranje-Nassau E&P is a wholly owned subsidiary of Oranje-Nassau Groep B.V. and Dyas UK is a wholly owned subsidiary of SHV Holdings N.V. • The terms of the Acquisition represent a premium of approximately 26.8 per cent. to the closing middle-market price of 250 pence per Ordinary Share on 22 April 2005, being the last business day before the Board announced that they had received an approach from Oranje-Nassau E&P and Dyas UK, and a premium of approximately 52.0 per cent. to the average closing middle-market price per Ordinary Share over the six month period ended 22 April 2005. • Dyon has received from the Directors of EOG and certain institutional Shareholders, irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the EGM in respect of 8,242,516 Ordinary Shares, together representing approximately 19.7 per cent. of EOG's existing issued ordinary share capital. • In addition, on 28 April 2005, Dyon purchased 2,917,416 Ordinary Shares at a price of 317 pence per Ordinary Share, representing approximately 7.0 per cent. of EOG's existing issued ordinary share capital. • Dyon has also received from an institutional Shareholder a non-binding letter of intent to vote in favour of the Scheme at the Court Meeting and the EGM in respect of 1,426,450 Ordinary Shares, representing approximately 3.4 per cent. of EOG's existing issued ordinary share capital. • The Acquisition is conditional on, amongst other things, certain approvals by Scheme Shareholders, and the sanction of the Scheme by the Court. Approval of the Acquisition will be sought from Scheme Shareholders at the Court Meeting and the Extraordinary General Meeting. • The Directors of EOG, who have been so advised by Brewin Dolphin Securities Limited, consider the terms of the Proposal to be fair and reasonable so far as Shareholders are concerned and, accordingly, the Directors unanimously recommend that Scheme Shareholders vote in favour of the Scheme, as they have undertaken to do in respect of their own beneficial holdings of Ordinary Shares. Commenting on the announcement, Rene Mulder, Managing Director of Oranje-Nassau,said: "The takeover of EOG represents an excellent opportunity for us to replace ourestimated production for 2005 by more than 200% and EOG's stake in Buzzard fitsvery well with our position on the UK Continental Shelf. The acquisition is ofan ideal scale for the joint company and the enlarged group will be well placedto take advantage of future opportunities as they arise. We look forward toworking together with the management and staff of EOG." Hans Tijssen, Director of Dyas UK, said: "This joint acquisition provides a welcome opportunity to add another highquality asset to our portfolio in the North Sea, a region that is core to thegrowth aspirations of the Dyas group. It represents an exciting prospect tobuild on EOG's success with the world class Buzzard discovery." Colin H Ross, Chairman of EOG, said: "The Company's objectives are to increase its oil and gas reserves and enhanceshareholder value and the discovery and development of the Buzzard oilfield hasplayed a key role in achieving these objectives over the past four years. Whilethe development is progressing well, the proposal from Dyon represents anattractive opportunity for shareholders to realise their investment in theCompany at a price significantly above the level at which the shares have tradedin the months prior to our announcement on 25 April 2005." Enquiries: Dyon UK LimitedRene Mulder Tel: +31 20 567 7150 or 7117Hans Tijssen Tel: +31 30 233 8434 ABN AMRO Corporate Finance LimitedRichard Kent Tel: +44 (0) 20 7678 5662Richard Walker Tel: +44 (0) 20 7678 1451 Hoare Govett LimitedAndrew Foster Tel: +44 (0) 20 7678 7106John MacGowan Tel: +44 (0) 20 7678 1084 College Hill AssociatesAlex Sandberg Tel: +44 (0) 20 7457 2020Jim Joseph Tel: +44 (0) 20 7457 2033 Edinburgh Oil & Gas plcAlf Bissett Tel: +44 (0) 131 225 5454 Bell Lawrie (a division of Brewin Dolphin Securities Limited)Elizabeth Kennedy Tel: +44 (0) 141 221 7733Alan Stewart Tel: +44 (0) 141 314 8113 This summary should be read in conjunction with the full text of thisannouncement. Terms used in this summary shall have the meaning given to them inAppendix II to the full announcement. ABN AMRO Corporate Finance Limited, which is authorised and regulated by theFinancial Services Authority, is acting for Dyon in connection with the Proposaland is not acting for any other person in relation to the Proposal and will notbe responsible to anyone other than Dyon for providing the protections affordedto clients of ABN AMRO Corporate Finance Limited, nor for providing advice inrelation to the Proposal or any matters referred to herein. Hoare Govett Limited, which is authorised and regulated by the FinancialServices Authority, is acting for Dyon in connection with the Proposal and isnot acting for any other person in relation to the Proposal and will not beresponsible to anyone other than Dyon for providing the protections afforded toclients of Hoare Govett Limited, nor for providing advice in relation to theProposal or any matters referred to herein. Brewin Dolphin Securities Limited, which is authorised and regulated by theFinancial Services Authority for investment business activities, is acting forEOG as financial adviser in relation to the Proposal and is not acting for anyother person in relation to such Proposal. Brewin Dolphin Securities Limitedwill not be responsible to anyone other than the Company for providing theprotections afforded to its clients, nor for providing advice in relation to thecontents of this announcement or the Proposal or any matters referred to herein. The Directors of EOG accept responsibility for the information contained in thisannouncement other than the information for which responsibility is taken by thedirectors of Dyon, the members of the Board of Management of Oranje-Nassau andthe members of the Executive Board of Directors of SHV pursuant to theparagraphs below. To the best of the knowledge and belief of the Directors ofEOG (each of whom has taken all reasonable care to ensure that such is thecase), the information contained in this announcement for which they acceptresponsibility is in accordance with the facts and does not omit anything likelyto affect the import of such information. The directors of Dyon accept responsibility for the information contained inthis announcement other than the information relating to EOG, Oranje-Nassau andSHV. To the best of the knowledge and belief of the directors of Dyon (each ofwhom has taken all reasonable care to ensure that such is the case), theinformation contained in this announcement for which they are responsible is inaccordance with the facts and does not omit anything likely to affect the importof such information. The members of the Board of Management of Oranje-Nassau accept responsibilityfor the information contained in this announcement other than the informationrelating to EOG, Dyon and SHV. To the best of the knowledge and belief of themembers of the Board of Management of Oranje-Nassau (each of whom has taken allreasonable care to ensure that such is the case), the information contained inthis announcement for which they are responsible is in accordance with the factsand does not omit anything likely to affect the import of such information. The members of the Executive Board of Directors of SHV accept responsibility forthe information contained in this announcement other than the informationrelating to EOG, Dyon and Oranje-Nassau. To the best of the knowledge and beliefof the members of the Executive Board of Directors of SHV (each of whom hastaken all reasonable care to ensure that such is the case), the informationcontained in this announcement for which they are responsible is in accordancewith the facts and does not omit anything likely to affect the import of suchinformation. The distribution of this announcement in jurisdictions other than the UnitedKingdom may be restricted by law and therefore persons in such jurisdictionsinto whose possession this announcement comes should inform themselves about andobserve such restrictions. Any failure to comply with the applicablerestrictions may constitute a violation of the securities laws of any suchjurisdiction. This announcement does not constitute an offer to sell or issue,or a solicitation of an offer to buy or subscribe for, shares or othersecurities or a solicitation of any vote or approval in any jurisdiction inwhich such offer or solicitation is unlawful. This announcement has beenprepared for the purposes of complying with Scots law and the City Code and theinformation disclosed may not be the same as that which would have beendisclosed if this announcement had been prepared in accordance with the laws ofjurisdictions outside of the United Kingdom. EOG will prepare the Scheme Document to be distributed to Shareholders. Dyon andEOG urge Shareholders to read the Scheme Document when it becomes availablebecause it will contain important information relating to the Proposal. Appendix I contains the conditions to the implementation of the Scheme and theAcquisition; Appendix II contains the definitions of certain terms used in thissummary and in the following announcement. Dealing disclosure requirementsUnder the provisions of Rule 8.3 of the City Code, any person who, alone oracting together with any other person(s) pursuant to an agreement orunderstanding (whether formal or informal) to acquire or control relevantsecurities of EOG, owns or controls, or becomes the owner or controller,directly or indirectly, of one per cent. or more of any class of securities ofEOG is required to disclose, by not later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction, dealings insuch securities of that company (or in any option in respect of, or derivativereferenced to, any such securities) during the period to the date on which theScheme becomes effective or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of EOG by Dyon or EOG, or by any of their respective "associates"(within the meaning of the City Code) must also be disclosed. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial adviser authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. NOT FOR RELEASE UNTIL 07.00 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN 29 April 2005 RECOMMENDED PROPOSAL FOR THE ACQUISITION OF EDINBURGH OIL & GAS PLC 1. Introduction On 25 April 2005 the Board of EOG announced that it had received an approachfrom Oranje-Nassau E&P and Dyas UK which may or may not lead to an offer for theentire issued ordinary share capital of the Company. Today, the Board of EOGannounces that it has agreed the terms of a recommended proposal for theacquisition of EOG by Dyon to be effected by way of a scheme of arrangement ofthe Company under section 425 of the Act. If the Scheme becomes effective, apayment of 317 pence in cash per Scheme Share will be dispatched or, whereappropriate, credited through CREST to Scheme Shareholders within 14 days of theEffective Date and EOG will be de-listed and will become wholly owned by Dyon. Dyon is a newly incorporated company, jointly owned by Oranje-Nassau E&P andDyas UK, formed for the purpose of the Proposal and the Acquisition.Oranje-Nassau E&P is a wholly owned subsidiary of Oranje-Nassau and Dyas UK is awholly owned subsidiary of SHV. Further details on Dyon, Oranje-Nassau and SHVare set out in paragraph 5 of this announcement. 2. Terms of the Proposal Under the Proposal, if the Scheme becomes effective, Scheme Shareholders willreceive: for each Scheme Share 317 pence in cash If the Scheme becomes effective, then not later than 14 days after the EffectiveDate: (a) in respect of Scheme Shares held in certificated form at the RecordTime, cheques in respect of the Cash Consideration will be dispatched by theRegistrars, and (b) in respect of Scheme Shares held in uncertificated form atthe Record Time, payment in respect of the Cash Consideration will be made infavour of such Scheme Shareholder's payment bank in accordance with the CRESTassured payment arrangements. The Cash Consideration of 317 pence per Scheme Share values the entire existingissued ordinary share capital of the Company at approximately £132.8 million andrepresents a premium of approximately 52.0 per cent. to the average closingmiddle market price per Ordinary Share trading on the London Stock Exchangeduring the six months ended 22 April 2005 (the last dealing day prior tocommencement of the Offer Period) and a premium of approximately 26.8 per cent.to the closing middle market price of 250 pence per Ordinary Share trading onthe London Stock Exchange on 22 April 2005 (the last dealing day prior to thecommencement of the Offer Period). 3. Background to and reasons for recommending the Proposal Since 1998 the Company has pursued a strategy which has concentrated on buildinga portfolio of UK onshore oil and gas producing properties complemented byexposure to UK offshore exploration activities. This strategy led to theCompany's participation in exploration licences P986 and P928S in the North Seaand subsequently to the discovery on these licences of the Buzzard oilfield("Buzzard") in June 2001. As at 31 December 2004, the Company had independently estimated reserves of 27.5million barrels of oil relating to its 5.16 per cent. interest in Buzzard. Thesereserves amounted to approximately 97 per cent. of the Company's total oil andgas reserves. The Buzzard field development is currently on schedule and withinbudget with first oil production forecast for the fourth quarter of 2006. TheCompany's share of the development costs is currently being financed through aUS$105 million credit facility. Notwithstanding the good progress with Buzzardto date, the Board recognises that the development of Buzzard has yet to becompleted. The Directors believe that the Proposal represents an attractive opportunity forShareholders to realise their investment in the Company at a price significantlyabove that at which the Ordinary Shares have traded in the months prior to theannouncement by the Company on 25 April 2005 referred to above. It is for thisreason that the Directors are unanimously recommending Scheme Shareholders tovote in favour of the Scheme (as they have undertaken to do in respect of theirown beneficial holdings). 4. Information on EOG and current trading EOG is principally engaged in oil and gas exploration and production in theUnited Kingdom. EOG announced its preliminary results for the financial year ended 31 December2004 on 11 March 2005 and its 2004 annual report and accounts were posted toShareholders on 4 April 2005. Turnover for 2004 reduced to £2.4 million from£3.1 million for 2003 due largely to the continuing programme of divestment ofonshore assets. Pre-tax profits for 2004 were £297,000. The broad pattern ofrecent results has continued throughout the first quarter of 2005. Capitalinvestment in the Buzzard development has continued in line with expectationswith net debt rising to £15.7 million as at 31 March 2005 compared to £10.7million at the year end. The Company has not yet entered into any hedgingarrangements although the Directors review this position regularly. There has been no significant activity in the Company's exploration portfoliosince the 2004 results were announced. 5. Information on Dyon, Oranje-Nassau and SHV Dyon is a company newly incorporated for the purpose of acquiring EOG. Dyon hasnot traded since its incorporation, nor has it entered into any obligationsother than in connection with the Proposal and the financing of the Proposal.Dyon is jointly owned by Oranje-Nassau E&P and Dyas UK which are in turn whollyowned subsidiaries of Oranje-Nassau and SHV respectively. Oranje-Nassau was incorporated in 1893 and began as a coal mining company. It isa Dutch resident group involved in investing and managing interests in energy,real estate and private equity. Its wholly owned subsidiary Oranje-NassauEnergie B.V. invests in the exploration, development and production of oil andgas. Dyas UK and its affiliates invest in the exploration, development and productionof oil and gas and are wholly owned subsidiaries of SHV. SHV is a broadly basedDutch resident group involved in the trade in and distribution of liquefiedpetroleum gas, the trade in food and non-food consumer goods, the provision ofprivate equity, the trade in and production of raw materials and the explorationand production of oil and gas through several wholly-owned companies. Oranje-Nassau Energie B.V. and Dyas UK and their respective affiliates have along history of investing in upstream projects in The Netherlands as well asinternationally. Since 1991, they have co-operated on several occasions througha jointly held Dutch company. 6. Dyon's intentions regarding the business of EOG Upon the Scheme becoming effective, Dyon believes that EOG will benefit fromgreater strategic, operational and financial flexibility than is currentlyavailable. Dyon intends to continue operating the business of EOG onsubstantially the same basis as it is currently operated. 7. Directors and employees Upon the Scheme becoming effective, all members of the Board will resign asDirectors. Save in respect of receipt of the Cash Consideration in respect oftheir interests in Ordinary Shares and Options, the Directors will not receiveany entitlements upon the Scheme becoming effective. Mr Bissett and Mr Ramsaywill continue to be employed as Managing Director and Operations Directorrespectively but will no longer be members of the Board. The Board has received written assurances from the directors of Dyon that theexisting contractual and statutory employment rights, including pensionentitlements, of the executive directors and all employees of EOG will be fullysafeguarded. 8. Financing ABN AMRO is satisfied that, if the Scheme becomes effective, Dyon will havesufficient cash resources available to it to satisfy in full the CashConsideration payable by Dyon under the Scheme. Financing for the Cash Consideration payable by Dyon under the Scheme will befrom internal resources available to Oranje-Nassau Energie B.V. and SHV and madeavailable to Dyon. 9. Option Schemes Participants in the Option Schemes have been contacted regarding the effect ofthe Acquisition on their rights and, conditional upon the Scheme becomingeffective, have undertaken to accept an amount equal to the Cash Considerationin respect of the Ordinary Shares to which they would become entitled uponexercise of their Options. 10. Irrevocable undertakings and letters of intent The Directors have undertaken in writing to Dyon to vote in favour of the Schemeat the Court Meeting and the EGM in respect of a total of 1,634,625 OrdinaryShares, being their entire beneficial holdings of Scheme Shares and representingapproximately 3.9 per cent. of EOG's existing issued ordinary share capital.These undertakings are binding and irrevocable unless a competing offer for EOGis made at a premium of at least 10 per cent. to the Cash Consideration. Dyon has also received from certain institutional Shareholders undertakings tovote in favour of the Scheme at the Court Meeting and the EGM in respect of atotal of 6,607,891 Ordinary Shares, representing approximately 15.8 per cent. ofEOG's existing issued ordinary share capital. These undertakings are binding andirrevocable unless a competing offer for EOG is made at a premium of at least 10per cent. to the Cash Consideration. Details of the undertakings received by Dyon are set out below: Shareholder providing irrevocable Number of Percentage ofundertaking Ordinary Shares existing issued share committed capital of the CompanyAlfred Alexander Bissett* 1,464,625 3.5%Joseph Andrew Stanislaw* 117,500 0.3%Francis Forrest Kidd* 22,500 0.1%Colin Hamish Ross* 20,000 less than 0.1%Brian Ramsay* 10,000 less than 0.1%Asset Value Investors Ltd 3,991,789 9.5%Jupiter Asset Management Limited 1,559,419 3.7%Jupiter Unit Trust Managers Limited 706,683 1.7%SVM Asset Management Limited 350,000 0.8% * Directors of the Company In aggregate, therefore, Dyon has received from the Directors and certaininstitutional Shareholders, irrevocable undertakings to vote in favour of theScheme at the Court Meeting and the EGM in respect of 8,242,516 Ordinary Shares,together representing approximately 19.7 per cent. of EOG's existing issuedordinary share capital. Each of these undertakings is binding and irrevocableunless a competing offer for EOG is made at a premium of at least 10 per cent.to the Cash Consideration. In addition, Dyon has received from Legal & General Investment ManagementLimited a non-binding letter of intent to vote in favour of the Scheme at theCourt Meeting and the EGM in respect of 1,426,450 Ordinary Shares, representingapproximately 3.4 per cent. of EOG's existing issued ordinary share capital. The ordinary share capital figures and percentages set out in this paragraph 10reflect the position as at 28 April 2005 (the last practicable day prior to thisannouncement). 11. Structure of the Acquisition The Acquisition is to be effected by means of a scheme of arrangement betweenEOG and the Scheme Shareholders under section 425 of the Act. The procedureinvolves an application by EOG to the Court to sanction the Scheme and confirmthe cancellation of all Scheme Shares, in consideration for which SchemeShareholders will receive cash as described in paragraph 2 of thisannouncement. The implementation of the Scheme is subject to the conditions andfurther terms set out in Appendix I and the full terms and conditions which willbe set out in the Scheme Document and will only become effective if thefollowing events occur: • a resolution to approve the Scheme being passed by a majority in number, representing at least three quarters in value of the Scheme Shares voted, of the Scheme Shareholders present and voting in person or by proxy at the Court Meeting; • the special resolution to implement the Scheme and to amend the Articles being passed at the Extraordinary General Meeting; and • the Scheme being sanctioned (with or without modification), and the associated Reduction of Capital being confirmed, by the Court and a certified copy of the interlocutor of the Court together with relative minute of reduction of capital being delivered to, and registered by, the Registrar of Companies. The Final Hearing of the Petition to sanction the Scheme is expected to be heldon or around 1 July 2005 at the Court, although the exact date will depend on,amongst other things, the timetable fixed by the Court. The existence of thePetition will be advertised in the Scotsman, the Edinburgh Gazette and theFinancial Times (UK Edition) at least 21 days before the date of the FinalHearing. Any interested party (including a Scheme Shareholder) who wishes toobject to the sanctioning of the Scheme can lodge answers to the Petition withthe Court within a specified time period, which will be fixed by the Court andset out in the Scheme Document, of the date of advertisement of the Petition andthereafter may appear or be represented at the Final Hearing to oppose thesanctioning of the Scheme. The Court will remit to a Reporter to enquire intothe facts and circumstances of the Petition and to provide a report to the Courtfor its consideration. If the Scheme is sanctioned by the Court, it is expected to become effective onor about 4 July 2005 with payment being dispatched by Dyon to SchemeShareholders no later than 14 days after that date. If the Scheme has not becomeeffective by 31 August 2005, or such later date as Dyon and EOG may agree andthe Court may allow, it will lapse. The Scheme contains a provision for the Company to consent, on behalf of allpersons concerned, to any modification of or addition to the Scheme or to anycondition that the Court may approve or impose. EOG has been advised that it isunlikely that the Court would impose any condition to the Scheme that might bematerial to the interests of Shareholders unless Shareholders were informed inadvance. 12. Implementation Agreement and Inducement Fee By letter agreement dated 25 February 2005 between EOG and Oranje-Nassau EnergieB.V., as amended by letter agreements dated 21 April 2005 and 28 April 2005between EOG, Oranje-Nassau Energie B.V. and Dyon, EOG, Oranje-Nassau EnergieB.V. and Dyon agreed, inter alia, that the Acquisition would proceed by way ofthe Proposal and that EOG would pay a fee to Dyon in certain circumstances (the"Inducement Fee") (exclusive of VAT) equal to 0.5 per cent. of the value of theAcquisition (being 0.5 per cent. of the value of EOG's fully diluted issuedordinary share capital, calculated on the basis of the Cash Consideration). The Inducement Fee is due and payable in various specified circumstances wherethe Scheme is not implemented or does not become effective due to, inter alia, avoluntary act on behalf of the Company or the Directors or where an independentcompeting offer has been recommended or approved by the Board. Also in connection with the Scheme, EOG and Dyon have entered into anImplementation Agreement undertaking to each other respectively to use allreasonable endeavours to implement and complete the Scheme on the terms andconditions to be set out in the Scheme Document. 13. Disclosure of interests in EOG On 28 April 2005, Dyon purchased 2,917,416 Ordinary Shares at a price of 317pence per Ordinary Share, representing approximately 7.0 per cent. of EOG'sexisting issued ordinary share capital. Save as disclosed in this paragraph 13, as at 28 April 2005, being the latestpracticable day prior to the date of this announcement, neither Dyon nor any ofits directors, nor Oranje-Nassau nor any member of its Board of Management, norSHV nor any member of its Executive Board of Directors, nor any party acting inconcert with Dyon, control or hold any Ordinary Shares or have entered into anyderivative referenced to Ordinary Shares which remains outstanding. 14. General The Acquisition will be made on the terms and subject to the conditions set outherein and in Appendix I, and to be set out in the Scheme Document and the Formsof Proxy. The Scheme Document will include full details of the Scheme, togetherwith notices of the Court Meeting and the Extraordinary General Meeting, theexpected timetable and the Forms of Proxy. These will be dispatched toShareholders and, for information purposes only, to holders of Options, in duecourse. The Acquisition will be governed by Scots law and will be subject to theapplicable requirements of the City Code. Enquiries: Dyon UK LimitedRene Mulder Tel: +31 20 567 7150 or 7117Hans Tijssen Tel: +31 30 233 8434 ABN AMRO Corporate Finance LimitedRichard Kent Tel: +44 (0) 20 7678 5662Richard Walker Tel: +44 (0) 20 7678 1451 Hoare Govett LimitedAndrew Foster Tel: +44 (0) 20 7678 7106John MacGowan Tel: +44 (0) 20 7678 1084 College Hill AssociatesAlex Sandberg Tel: +44 (0) 20 7457 2020Jim Joseph Tel: +44 (0) 20 7457 2033 Edinburgh Oil & Gas plcAlf Bissett Tel: +44 (0) 131 225 5454 Bell Lawrie (a division of Brewin Dolphin Securities Limited)Elizabeth Kennedy Tel: +44 (0) 141 221 7733Alan Stewart Tel: +44 (0) 141 314 8113 ABN AMRO Corporate Finance Limited, which is authorised and regulated by theFinancial Services Authority, is acting for Dyon in connection with the Proposaland is not acting for any other person in relation to the Proposal and will notbe responsible to anyone other than Dyon for providing the protections affordedto clients of ABN AMRO Corporate Finance Limited, nor for providing advice inrelation to the Proposal or any matters referred to herein. Hoare Govett Limited, which is authorised and regulated by the FinancialServices Authority, is acting for Dyon in connection with the Proposal and isnot acting for any other person in relation to the Proposal and will not beresponsible to anyone other than Dyon for providing the protections afforded toclients of Hoare Govett Limited, nor for providing advice in relation to theProposal or any matters referred to herein. Brewin Dolphin Securities Limited, which is authorised and regulated by theFinancial Services Authority for investment business activities, is acting forEOG as financial adviser in relation to the Proposal and is not acting for anyother person in relation to such Proposal. Brewin Dolphin Securities Limitedwill not be responsible to anyone other than the Company for providing theprotections afforded to its clients, nor for providing advice in relation to thecontents of this announcement or the Proposal or any matters referred to herein The Directors of EOG accept responsibility for the information contained in thisannouncement other than the information for which responsibility is taken by thedirectors of Dyon, the members of the Board of Management of Oranje-Nassau andthe members of the Executive Board of Directors of SHV pursuant to theparagraphs below. To the best of the knowledge and belief of the Directors ofEOG (each of whom has taken all reasonable care to ensure that such is thecase), the information contained in this announcement for which they acceptresponsibility is in accordance with the facts and does not omit anything likelyto affect the import of such information. The directors of Dyon accept responsibility for the information contained inthis announcement other than the information relating to EOG, Oranje-Nassau andSHV. To the best of the knowledge and belief of the directors of Dyon (each ofwhom has taken all reasonable care to ensure that such is the case), theinformation contained in this announcement for which they are responsible is inaccordance with the facts and does not omit anything likely to affect the importof such information. The members of the Board of Management of Oranje-Nassau accept responsibilityfor the information contained in this announcement other than the informationrelating to EOG, Dyon and SHV. To the best of the knowledge and belief of themembers of the Board of Management of Oranje-Nassau (each of whom has taken allreasonable care to ensure that such is the case), the information contained inthis announcement for which they are responsible is in accordance with the factsand does not omit anything likely to affect the import of such information. The members of the Executive Board of Directors of SHV accept responsibility forthe information contained in this announcement other than the informationrelating to EOG, Dyon and Oranje-Nassau. To the best of the knowledge and beliefof the members of the Executive Board of Directors of SHV (each of whom hastaken all reasonable care to ensure that such is the case), the informationcontained in this announcement for which they are responsible is in accordancewith the facts and does not omit anything likely to affect the import of suchinformation. The distribution of this announcement in jurisdictions other than the UnitedKingdom may be restricted by law and therefore persons in such jurisdictionsinto whose possession this announcement comes should inform themselves about andobserve such restrictions. Any failure to comply with the applicablerestrictions may constitute a violation of the securities laws of any suchjurisdiction. This announcement does not constitute an offer to sell or issue,or a solicitation of an offer to buy or subscribe for, shares or othersecurities or a solicitation of any vote or approval in any jurisdiction inwhich such offer or solicitation is unlawful. This announcement has beenprepared for the purposes of complying with Scots law and the City Code and theinformation disclosed may not be the same as that which would have beendisclosed if this announcement had been prepared in accordance with the laws ofjurisdictions outside of the United Kingdom. EOG will prepare the Scheme Document to be distributed to Shareholders. Dyon andEOG urge Shareholders to read the Scheme Document when it becomes availablebecause it will contain important information relating to the Proposal Dealing disclosure requirementsUnder the provisions of Rule 8.3 of the City Code, any person who, alone oracting together with any other person(s) pursuant to an agreement orunderstanding (whether formal or informal) to acquire or control relevantsecurities of EOG, owns or controls, or becomes the owner or controller,directly or indirectly, of one per cent. or more of any class of securities ofEOG is required to disclose, by not later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction, dealings insuch securities of that company (or in any option in respect of, or derivativereferenced to, any such securities) during the period to the date on which theScheme becomes effective or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of EOG by Dyon or EOG, or by any of their respective "associates"(within the meaning of the City Code) must also be disclosed. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial adviser authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. APPENDIX I TERMS AND CONDITIONS OF THE PROPOSAL The Proposal will be subject to the applicable conditions of the City Code, allapplicable rules and regulations of the London Stock Exchange and the UK ListingAuthority and will be governed by the laws of Scotland and subject to thejurisdiction of the Scottish courts. The Proposal is conditional upon the Scheme becoming effective before 31 August2005 or such later date as Dyon and EOG may agree and the Court may approve. 1. The Scheme will become effective upon: (i) approval of the Scheme by a majority in number representing at least three quarters in value of the Scheme Shareholders present and voting in person or by proxy at the Court Meeting; (ii) the special resolution required to implement the Scheme being passed at the Extraordinary General Meeting; (iii) the Scheme being sanctioned by the Court with or without modification; and (iv) delivery of a certified copy of the interlocutor of the Court sanctioning the Scheme together with the relative minute of reduction of capital to the Registrar of Companies for registration and registration of such certified copy interlocutor and minute by him.2. Dyon and EOG have agreed that, subject as stated in paragraph 3 below (and in particular to the consent of the Panel), the Acquisition is also conditional upon (and accordingly subject as aforesaid the necessary action to make the Scheme effective will not be taken unless the following conditions are satisfied or, where relevant, waived as referred to below prior to the Scheme being sanctioned by the Court): (a) (i) the European Commission deciding not, pursuant to Council Regulation 139/2004 (EC), to initiate proceedings under Article 6(1)(c) of such regulation and, in the event that a request under Article 9(2) of such Regulation has been made by a competent authority of the United Kingdom, the European Commission having either: (A) indicated that it does not intend to refer the proposed acquisition of EOG by Dyon or any matters arising therefrom to a competent authority in the United Kingdom; or (B) referred the proposed acquisition or any matters arising therefrom to a competent authority of the United Kingdom in response to such a request, and, in such event, the Office of Fair Trading deciding not to refer the Acquisition, or any matters arising therefrom, to the Competition Commission; and (ii) the Secretary of State not having indicated, prior to any decision of the Competition Commission (or Office of Fair Trading, in the case of a reference back having been made) under clause (i) above, that he will issue a European intervention notice under section 67(2) of the Enterprise Act 2002; (b) written confirmation from the Secretary of State for Trade and Industry, in terms reasonably satisfactory to Dyon, that the Secretary does not intend, as a result of the Acquisition, to revoke any of the licences of the wider EOG Group (being United Kingdom Petroleum Production licences) and/or to require a further change of control in any member of the wider EOG Group under the terms of any such licences and that, as a result of the Acquisition, the Secretary does not intend to require the removal of a member of the wider EOG Group as an operator of such licences, whether pursuant to the Petroleum (Production) (Seaward Areas) Regulations 1988 or the Petroleum (Production) (Landward Areas) Regulations 1995; (c) no government or governmental, quasi-governmental, supranational, statutory or regulatory body, or any court, institution, investigative body, association, trade agency or professional or environmental body or (without prejudice to the generality of the foregoing) any other person or body in any jurisdiction (each, a "Relevant Authority") having decided to take, instituted, implemented or threatened any action, proceedings, suit, investigation or enquiry or enacted, made or proposed any statute, regulation or order or otherwise taken any other step or done any thing and there not being outstanding any statute, legislation or order that would or might reasonably be expected to: (i) make the Acquisition, the Scheme, the Reduction of Capital or the acquisition by Dyon of any shares in, or control of, EOG void, illegal or unenforceable in or under the laws of any relevant jurisdiction, or impose unduly onerous additional conditions or obligations with respect to the Acquisition or otherwise materially impede, challenge or interfere with the Acquisition or the implementation of the same; (ii) restrict, restrain, prohibit, delay, impose additional conditions or obligations with respect to, or otherwise materially interfere with or delay the implementation of, the Acquisition, the Scheme or the acquisition of any Ordinary Shares by Dyon or any matters arising therefrom; (iii) result in a material delay in the ability of Dyon, or render Dyon unable, to acquire some or all of the Ordinary Shares; (iv) require the divestiture by Dyon or any of its subsidiaries, subsidiary undertakings or associated undertakings (including any company of which 20 per cent. or more of the voting capital is held by the Dyon Group or any partnership, joint venture, firm or company in which any of them may be interested) (together the "wider Dyon Group") or EOG or any of its subsidiaries, subsidiary undertakings or associated undertakings (including any company of which 20 per cent. or more of the voting capital is held by EOG Group or any partnership, joint venture, firm or company in which any of them may be interested) (together the "wider EOG Group") of all or any material portion of their businesses, assets or property or of any Ordinary Shares or other securities in EOG or impose any material limitation on the ability of any of them to conduct their respective businesses or own their respective assets or properties or any material part thereof; (v) impose any material limitation on the ability of any member of the wider Dyon Group to acquire or hold or exercise effectively, directly or indirectly, all rights of all or any of the Ordinary Shares (whether acquired pursuant to the Acquisition or otherwise) (in any case to an extent which is material and adverse in the context of the wider EOG Group taken as a whole); (vi) require any member of the wider Dyon Group or the wider EOG Group to offer to acquire any shares or other securities or rights thereover in any member of the wider EOG Group owned by any third party; (vii) impose any limitation on the ability of any member of the wider Dyon Group or the wider EOG Group to conduct, integrate or co-ordinate its business, or any material part of it, with the business of any other member of the wider Dyon Group or the wider EOG Group (in any case to an extent which is material and adverse in the context of the wider EOG Group taken as a whole); or (viii) otherwise adversely affect any or all of the businesses, assets, prospects or profits of any member of the wider Dyon Group or the wider EOG Group or the exercise of rights of shares of any company in the EOG Group (in any case to an extent which is material and adverse in the context of the wider EOG Group taken as a whole); and all applicable waiting periods during which such Relevant Authority could institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene having expired, lapsed or been terminated; (d) all authorisations, orders, grants, consents, clearances, licences, permissions and approvals, in any jurisdiction, necessary or appropriate for or in respect of the Acquisition, the proposed acquisition of any shares or securities in, or control of, EOG or any member of the wider EOG Group by any member of the wider Dyon Group or the carrying on of the business of any member of the wider EOG Group or any matters arising therefrom being obtained in terms reasonably satisfactory to Dyon and EOG from all appropriate Relevant Authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any members of the wider EOG Group or the wider Dyon Group has entered into contractual arrangements and such authorisations, orders, grants, consents, clearances, licences, permissions and approvals remaining in full force and effect and there being no intimation of any intention to revoke or not to renew the same and all necessary filings having been made, all appropriate waiting and other time periods (including extensions thereto) under any applicable legislation and regulations in any jurisdiction having expired, lapsed or been terminated and all necessary statutory or regulatory obligations in any jurisdiction in respect of the Acquisition or the proposed acquisition of EOG by Dyon or of any Ordinary Shares or any matters arising therefrom having been complied with; (e) appropriate assurances being received, in terms reasonably satisfactory to Dyon, from the Relevant Authorities or any party with whom any member of the wider EOG Group has any contractual or other relationship that the interests held by any member of the wider EOG Group under licences, leases, consents, permits and other rights will not save as disclosed to Dyon prior to the date of this document in writing be adversely amended or otherwise affected by the Acquisition of EOG or any matters arising therefrom, that such licences, leases, consents, permits and other rights are in full force and effect and that there is no intention to revoke or amend any of the same; (f) save as disclosed in this document or in the Annual Report and Accounts of EOG for the year ended 31 December 2004 or as publicly announced by EOG (by the delivery of an announcement to a Regulatory Information Service as defined in the UK Listing Authority's listing rules) or as otherwise disclosed in writing to the wider Dyon Group by or on behalf of EOG prior to 29 April 2005 (being the date of this announcement), there being no provision of any agreement, instrument, permit, licence or other arrangement to which any member of the wider EOG Group or wider Dyon Group is a party or by or to which it or any of its assets may be bound or subject (and which, in any such case, is material in the context of the wider EOG Group taken as a whole) which, as a result of the making or implementation of the Acquisition, the Scheme or the Acquisition by Dyon of any shares or other securities in, or because of a change in the control or management of EOG or any member of the EOG Group or otherwise, could or might have the result that, in each case to an extent that is material and adverse in the context of the wider EOG Group taken as a whole: (i) any monies borrowed by, or other indebtedness or liabilities, actual or contingent, of, or grant available to, any member of the wider EOG Group becomes or is capable of being declared repayable immediately or earlier than the repayment date stated in such agreement, instrument or other arrangement or the ability of any member of the wider EOG Group to borrow moneys or incur indebtedness is withdrawn; (ii) any mortgage, charge or other security interest is created over the whole or any part of the business, property or assets of any member of the wider EOG Group or any such security (whenever arising) becomes enforceable; (iii) any such agreement, instrument, permit, licence or other arrangement, or any right, interest, liability or obligation of any member of the wider EOG Group and material to the wider EOG Group as a whole, is terminated or materially adversely modified or affected or any material action of an adverse nature is taken or onerous obligation arises thereunder; (iv) the value of any member of the wider EOG Group or its financial or trading position is prejudiced or adversely affected to an extent that is material in the context of the wider EOG Group as a whole; (v) other than in the ordinary course of business, any material asset of the wider EOG Group being or falling to be charged or disposed of; (vi) the rights, liabilities, obligations or interests or business of any member of the wider EOG Group in or with any other person, firm or company (or any arrangement relating to such interest or business) is terminated, or materially and adversely modified or affected; or (vii) any member of the wider EOG Group ceases to be able to carry on business under any name under which it currently does so; (g) since 31 December 2004 (being the date to which the latest published audited report and accounts of EOG were made up) or save as disclosed in this document or in the Annual Report and Accounts of EOG for the year ended 31 December 2004 or as publicly announced by delivery of an announcement to a Regulatory Information Service (as defined in the UK Listing Authority's listing rules) or as otherwise disclosed in writing to the wider Dyon Group by or on behalf of EOG prior to 29 April 2005 (being the date of this announcement), no member of the wider EOG Group having: (i) issued or agreed to issue or authorised or proposed the issue of additional shares of any class or issued or authorised or proposed the issue of or granted securities convertible into or rights, warrants or options to subscribe for or acquire such shares or convertible securities (other than the allotment and issue of Ordinary Shares pursuant to the exercise of Options) or other than in the implementation of the Acquisition and/or the Scheme, redeemed, purchased or reduced or announced any intention to do so or made any other change to any part of its share capital; (ii) sold or transferred or agreed to sell or transfer any Treasury Shares; (iii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution (whether payable in cash or otherwise) other than dividends lawfully paid to EOG or wholly-owned subsidiaries of EOG; (iv) other than in the implementation of the Acquisition and/or the Scheme or the allotment and issue of shares pursuant to the exercise of Options, authorised or proposed or announced its intention to propose any merger or acquisition or disposal or transfer of assets or shares which is or are material in the context of the wider EOG Group as a whole or any change in its share or loan capital; (v) issued or authorised or proposed the issue of, or made any change in or to, any debentures or incurred or, other than pursuant to meeting existing commitments, increased any indebtedness or liability (actual or contingent) of an aggregate amount that is material and adverse in the context of the wider EOG Group as a whole; (vi) disposed of or transferred, mortgaged or encumbered any asset which is material in the context of the wider EOG Group as a whole or any right, title or interest in any such asset or entered into or varied any contract, commitment or agreement (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature (and in any case which is material in the context of the wider EOG Group as a whole) or authorised, proposed or announced any intention to do so; (vii) save as disclosed in this document, entered into, or varied the terms of, any contract or agreement with any of the directors or senior executives of EOG; (viii) taken or proposed any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets and revenues in any case in a manner which will or might reasonably be expected to have a material and adverse effect on the wider EOG Group as a whole; (ix) waived or compromised any claim that is material and adverse in the context of the wider EOG Group as a whole other than in the ordinary course of business; (x) save as envisaged in connection with the Scheme, made any amendment to its memorandum or articles of association; (xi) entered into any contract, transaction or agreement which is or may be materially and adversely restrictive on the ability of the business of any member of the wider EOG Group to compete with any other person; (xii) entered into any contract, commitment or agreement with respect to any of the transactions or events referred to in this condition (g); (xiii) been unable or admitted that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; and (xiv) made or agreed or consented to any significant change to the existing pension arrangements for directors, employees and their dependants; (h) since 31 December 2004 (being the date to which the latest published audited report and accounts of EOG were made up) or save as disclosed in this document or in the Annual Report and Accounts of EOG for the year ended 31 December 2004 or as publicly announced by delivery to a Regulatory Information Service (as defined in the UK Listing Authority's listing rules) or as otherwise disclosed in writing to the wider Dyon Group by or on behalf of EOG prior to 29 April 2005 (being the date of this announcement): (i) no litigation, arbitration, prosecution or other legal proceedings having been or become reasonably likely to be instituted, announced or threatened or remained outstanding by or against any member of the wider EOG Group or to which any member of the wider EOG Group is or may become a party (whether as plaintiff, defendant or otherwise) which, in any such case, is material and adverse in the context of the wider EOG Group as a whole; (ii) no material adverse change having occurred in the business, assets, financial or trading position, profits or prospects of the wider EOG Group taken as a whole; (iii) other than by meeting existing commitments, no contingent or other liability of any member of the wider EOG Group having arisen or increased in either case in a manner that will materially and adversely affect the wider EOG Group taken as a whole; (iv) no steps having been taken which might reasonably be expected to result in the withdrawal, cancellation, termination or modification of any material licence held by the wider EOG Group which is necessary for the proper carrying on of its business; and which, in each case, adversely affects the EOG Group to an extent which is material to the EOG Group taken as a whole; (i) since 31 December 2004 (being the date to which the latest published annual report and accounts of EOG were made up) or save as disclosed in this document or in the annual report and accounts of EOG for the year ended 31 December 2004 or as announced publicly by delivery to a Regulatory Information Service (as defined in the UK Listing Authority's listing rules) or as otherwise disclosed in writing to the wider Dyon Group by or on behalf of EOG prior to 29 April 2005 (being the date of this announcement) Dyon not having discovered that: (i) any business, financial or other information concerning anyRelated Shares:
EDG.L