Placing and Notice of General Meeting

24th Apr 2009 17:00



For immediate release

24 April 2009

Rift Oil Plc

("Rift" or the "Company")

Placing to Raise £1 Million 

And 

Notice of General Meeting

Rift Oil PLC (AIM : RIFT), the oil and gas exploration company with assets in Papua New Guinea, is pleased to announce that it has conditionally raised £1,000,000, subject to Shareholder approval which is to be sought at a general meeting to be held on 18th May 2009.

The Conditional Placing

Raising £993,750 (after expenses)

Placing of 10,000,000 Placing Units at an issue price of £0.10 per Placing Unit, each Placing Unit comprising of two new Ordinary Shares and one Warrant (to subscribe for new Ordinary Shares at a subscription price of £0.07 per share) with existing Shareholders

The funds raised will be used to increase the working capital reserves of the Company as it continues to work towards securing a partner for the commercialisation of its discoveries

Nominated Adviser and Broker to Rift is RBC Capital Markets

For further information please contact: 

Rift Oil PLC	020 7340 9970
David Lees, Finance Director
RBC Capital Markets Sarah Wharry Buchanan Communications	020 7653 4804
Tim Anderson	020 7466 5000
Isabel Podda

PLACING STATISTICS

Issue Price	£0.10 per Placing Unit
Total number of Ordinary Shares in issue	795,838,680
Maximum number of Placing Shares proposed to be issued pursuant to the Placing	20,000,000
Maximum number of Warrants proposed to be issued pursuant to the Placing	10,000,000
Total number of Ordinary Shares in issue immediately following Admission	815,838,680
Approximate market capitalisation of the Company at the Issue Price following the issue of the Placing Shares	£40,792,000
Approximate percentage of the Enlarged Share Capital represented by the Placing Shares	2.5%
Anticipated net proceeds from the issue of the Placing Shares	£993,750

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

	2009
Latest time and date for receipt of Forms of Proxy	10 a.m., 16th May
General Meeting	10 a.m., 18th May
CREST accounts credited with Placing Shares	19th May
First trading day of Placing Shares	8.00 a.m., 19th May
Despatch of share certificates for the Placing Shares and warrant certificates for the Warrants	26th May

LETTER FROM THE CHAIRMAN OF THE COMPANY

PLACING OF 10,000,000 PLACING UNITS AT THE ISSUE PRICE, EACH PLACING UNIT COMPRISING TWO PLACING SHARES AND ONE WARRANT, TO RAISE AN AGGREGATE OF £1,000,000 AND NOTICE OF GENERAL MEETING

1.  Introduction

Today the Company announced that it had entered into conditional placing letters with a number of existing shareholders to raise the sum of £1,000,000 before expenses by the issue of 10,000,000 Placing Units at £0.10 per Placing Unit. The proposed Placing is conditional, inter alia, on Shareholder approval. I am now writing to provide further details of the proposed Placing and to seek the Shareholders' approval required to implement it. 

You will find set out at the end of this document a notice of a General Meeting which has been convened at 5-8 The Sanctuary, London SW1P 3JS at 10.00 a.m. on Monday 18th May 2009, at which the Resolution will be put to approve the Placing. It is important that you complete, sign and return the Form of Proxy for use at the General Meeting enclosed with this document whether or not you intend to attend the meeting.

The Directors consider that it is in the best interests of the Company and its Shareholders as a whole that the Company be able to proceed with the Placing and unanimously recommend that Shareholders vote in favour of the Resolution to be proposed at the GM. 

2.  Background to the Company

Since the publication in September 2008 of its results for year to 31 March 2008, Rift has continued to make progress towards establishing the potential of its two licences in Papua New Guinea, PPL 235 and PPL 261.

Rift has established 3 gas and condensate discoveries on PPL 235, at Puk Puk-1, Douglas-1 and Langia-1, and in November 2008 the Company announced that it had upgraded the size of these discoveries from 688 BCF to 769 BCF in the P50 case.

Recent mapping has confirmed five further prospects immediately adjacent to these, Douglas North West, Aiema, Puk Puk-2, Douglas North and Douglas North East. All of these show excellent gas effect and total an additional unrisked prospective resource potential of 772 BCF (P50). Douglas North West, in particular, appears to be potentially larger than either Douglas or Puk Puk and lies across the pathway of where gas from Puk Puk spills out towards Douglas. Additional prospectivity in the region of the border between the PPL 235 and 261 licences has further potential for 676 BCF (P50) prospective resource.

In summary, the board of Rift believes that the PPL 235 licence is now demonstrating the potential to hold contingent resources of more than 2 TCF of gas. Finally the Company has received gas composition analysis of Puk Puk-1 testing, which demonstrates relatively low levels of liquids content and a nitrogen presence of 7-9.5% (depending on pay zone). As the latter is inert, there are no safety or corrosion implications, but sales gas volumes may have to be adjusted downwards by that amount. The Company is happy that CO2 and H2S are insignificant in all three zones.

The tripling of potential P50 resources from earlier estimates, together with the unknown potential of the adjoining PPL 261, has caused the Company to re-evaluate the commercial alternatives available to it. Rift has decided to concentrate on commercialisation opportunities provided by LNG through a floating liquefaction plant as envisaged in the Heads of Agreement with Flex LNG where potential annual offtakes of 100 BCF or greater are contemplated.

Rift recently reported that it had entered into a further, and more defined, agreement with Flex LNG and commissioned a pipeline study and further pre-feasibility studies. The results of this study were announced on 15 April 2009 and, in brief, concluded that there are no technical impediments to the construction of field facilities and an export pipeline from Rift's Douglas and Puk Puk discoveries to a pipeline end module in the Gulf of Papua, for connection to a Flex LNG production vessel.

The Company has also entered a formal process with its Nominated Adviser RBC Capital Markets and Sydney-based RFC to establish appropriate commercial partnerships for the funding of future drilling and commercialisation of PPL 235 and PPL 261. 

3.  Background to and reasons for the Placing and Use of Proceeds

As at 17 April 2009, the Group's net cash balances were £60,000. The purpose of the fundraising is to increase the working capital reserves of the Company to allow for any delays in securing a partner for commercialisation of the discovery.

In view of the extra time and expense required to produce a UKLA-approved prospectus, which would be required if the Placing also involved an open offer to Shareholders or a rights issue, the Directors have decided to undertake the Placing with a restricted number of investors, all of whom are Shareholders. The Placing is not underwritten.

4.  Principal Terms of the Placing

The Company has raised £1,000,000 (£993,750 net of expenses) through the conditional placing of 10,000,000 Placing Units at the Issue Price pursuant to the terms of the Placing. Each Placing Unit comprises two Placing Shares and one Warrant, therefore 20,000,000 Placing Shares and 10,000,000 Warrants will be issued pursuant to the Placing.

The Placing is conditional, inter alia, upon: 

(i) the passing of the Resolution; and 

(ii) Admission of the Placing Shares having become effective by not later than 8.00 a.m. on 19th May 2009 or such later time and/or date as the Company and the Placees may agree (but, in any event, not later than 8.00 a.m. on 25th May 2009).

The Placing Shares will be issued fully paid up and will be identical to and rank pari passu in all respects with the Ordinary Shares currently in issue and will rank in full for all dividends and other distributions declared, made or paid on or after Admission in respect of the ordinary share capital of the Company. 

5.  Warrants

Each of the Placees will be issued with one Warrant, for every two Placing Shares subscribed for under the Placing. Each Warrant will entitle the holder to receive, upon exercise of the Warrants, one Ordinary Share at an exercise price of £0.07 per new Ordinary Share. The Warrants may be exercised at anytime before the expiry of a five year period from the date of issue (the "Final Exercise Date"). 

The Warrants will be constituted by the Warrant Instrument. The Warrants that will be in issue following the Placing will give the Placees collectively the right to subscribe for 10,000,000 new Ordinary Shares.

The Warrants are freely transferable, but will not be admitted to trading on AIM or any other exchange.

The Warrants may be exercised in whole or in part at any time before the Final Exercise Date. The exercise price of the Warrants is subject to adjustment in the following circumstances: if there is an alteration in the nominal value of the Ordinary Shares; or if the Company issues any Ordinary Shares credited as fully paid by way of capitalisation of reserves of profits.

If at any time during the period in which the Warrants remain capable of being exercised, an offer is made to acquire the whole or any part of the issued ordinary share capital of the Company, the Company shall procure that the Placees are provided with a like offer as if the Warrants had been exercised in full. If an order is made or an effective resolution is passed on or before the Final Exercise Date of the Warrants for the mandatory winding up of the Company (except for the purpose of reconstruction or amalgamation), each Placee will be treated as if he had exercised his Warrants immediately before the passing of the said resolution or order and will be entitled to receive our of assets available in the liquidation, pari passu with the holders of the Ordinary Shares, such a sum as he would have received if he had held such Ordinary Shares less the aggregate subscription price of such Ordinary Shares under the terms of the Warrants. Subject to this, the Warrants shall lapse on the liquidation of the Company.

6.  General Meeting 

You will find set out at the end of this document a notice convening a General Meeting to be held at 5-8 The Sanctuary, London SW1P 3JS at 10.00 a.m. on 18th May 2009, for the purpose of considering, and, if thought fit, passing a special resolution, to disapply the provisions of section 89 of the Act (statutory pre-emption provisions) to empower the Directors to allot equity securities in respect of the Placing in relation to the issue of new Ordinary Shares up to an aggregate nominal value of £300,000 (for both the issue of the Placing Shares and the grant of the Warrants), being approximately 3.5 per cent. of the Enlarged Share Capital. If given, this authority will expire at the 2009 AGM.

Other than in relation to the Placing, or pursuant to the exercise of existing warrants or share options, the Directors have no present intention of issuing any Ordinary Shares.

7.  Shareholder Irrevocables

Thornaby Limited and Ocarina Investments Limited, who between them hold 133,853,853 Ordinary Shares, representing in aggregate 16.8 per cent of the Issued Share Capital at the date of this document, have irrevocably undertaken to vote in favour of the Resolution. Thornaby Limited is a company whose entire issued share capital is owned by the IR Gowrie-Smith Family Settlement, of which I am a beneficiary. Ocarina Investments Limited is a company whose entire issued share capital is owned by the trustee of the DJ Lees Family Settlement the beneficiaries of which are David Lees and certain members of his family.

8.  Action to be Taken

Shareholders will find enclosed with this document a Form of Proxy for use in connection with the General Meeting.

Shareholders, whether or not they propose to attend the General Meeting in person, are requested to complete, sign and return the Form of Proxy, in accordance with the instructions printed thereon, so as to be received by the Company's registrars, Capital Registrars, Northern House, Woodsome Park, Fenay Bridge, Huddersfield, West Yorkshire HD8 0LA as soon as possible and, in any event, by not later than 10.00 a.m. on 16th May 2009. Completion and return of the Form of Proxy will not preclude Shareholders from attending and voting at the General Meeting in person if they wish to do so.

9.  Recommendation

The Directors consider that it is in the best interests of the Company and its Shareholders as a whole that the Company be able to proceed with the Placing.

The Directors unanimously recommend that Shareholders vote in favour of the Resolution, as those Directors who hold Ordinary Shares have irrevocably undertaken to do in respect of their own beneficial holdings of Ordinary Shares, representing in aggregate approximately 17.2 per cent. of the issued share capital of the Company at the date of this document.

Yours faithfully

Ian Gowrie-Smith Chairman

NOTICE OF GENERAL MEETING

RIFT OIL PLC(Registered in England and Wales under number 5285247)

Notice is hereby given that a General Meeting of RIFT OIL PLC (the "Company") will be held at 5-8 The Sanctuary, London SW1P 3JS at 10.00 a.m. on 18th May 2009 for the purpose of considering and, if thought fit, passing the following resolution which will be proposed as a special resolution:

SPECIAL RESOLUTION

THAT the directors be and are hereby granted power pursuant to section 95 of the Companies Act 1985 (the "Act") to allot equity securities (as defined in section 94(2) of the Act) for cash pursuant to the authority conferred by an ordinary resolution passed at the Company's 2008 Annual General Meeting as if section 89(1) of the Act did not apply to any such allotment provided that this power shall be limited to the allotment of equity securities with a nominal value of £300,000 in connection with the Placing of 10,000,000 Placing Units comprising 20,000,000 Placing Shares and 10,000,000 Warrants (as set out and defined in the Circular to the Company's Shareholders dated 24th April 2009 (the "Circular")) and this power shall expire at the conclusion of the annual general meeting of the Company to be held in 2009 unless previously varied, revoked or renewed by the Company in general meeting provided that the Company may, before such expiry, make any offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant to any such offer or agreement as if the power hereby conferred had not expired; and all prior powers granted under section 95 of the Act shall be revoked provided that such revocation shall not have retrospective effect.

Dated 24th April 2009

Registered Office 17 Hanover Square London W1S 1HU

By Order of the Board RIFT OIL PLC David Smith Secretary

DEFINITIONS

The following definitions apply throughout this document and the Form of Proxy unless the context requires otherwise:

"Acts" or "Companies Acts"	the CA 1985 and CA 2006;
"Admission"	the admission of the Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules;
"AIM"	AIM, a market operated by the London Stock Exchange;
"AIM Rules"	the rules of AIM as set out in the publication entitled "AIM Rules for Companies" published by the London Stock Exchange from time to time;
"Business Days"	means a day (other than a Saturday or Sunday) when commercial banks are open for ordinary banking business in London, United Kingdom;
"CA 1985"	the Companies Act 1985, to the extent still in force;
"CA 2006"	the Companies Act 2006, to the extent it has come into force;
"Company" or "Rift Oil"	Rift Oil PLC;
"CREST"	the computerised settlement system (as defined in the Regulations) operated by Euroclear which facilitates the transfer of title to shares in uncertificated form;
"CREST member"	a person who has been admitted by Euroclear as a system-member (as defined in the Regulations);
"CREST sponsored member"	a CREST member admitted to CREST as a sponsored member;
"Directors" or "Board"	the directors of the Company, at the date of this document whose names are set out on page 3 of this document together with, where the context so requires, their families and persons connected with them (within the meaning of section 252 of the CA 2006);
"Enlarged Share Capital"	the issued share capital of the Company as enlarged by the issue of Placing Shares pursuant to the Placing;
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST;
"Existing Ordinary Shares"	the 795,838,680 Ordinary Shares in issue at the date of this document;
"General Meeting" or "GM"	the general meeting of the Company to be held at 5-8 The Sanctuary, London SW1P 3JS at 10.00 a.m. on 18th May 2009, notice of which is set out at the end of this document, or any adjournment thereof;
"Flex LNG"	Flex LNG Limited, a company incorporated in 2006 to commercialise the world's first floating liquefaction units, with whom the Company signed Heads of Agreement in June 2008;
"Foreland Oil"	Foreland Oil Limited, a wholly owned subsidiary of the Company;
"Form of Proxy"	the form of proxy accompanying this document for use by Shareholders in connection with the GM (or any adjournment thereof);
"FSMA"	the Financial Services and Markets Act 2000 (as amended);
"Group"	the Company and its subsidiaries and associated undertakings;
"Issue Price"	£0.10 per Placing Unit (being £0.05 per Placing Share);
"Issued Share Capital"	all Ordinary Shares in issue from time to time;
"Licences"	the PPL 235 Licence and the PPL 261 Licence;
"London Stock Exchange"	London Stock Exchange plc;
"Oil and Gas Act"	the Papua New Guinea Oil and Gas Act 1998;
"Ordinary Shares"	ordinary shares of £0.01 each in the capital of the Company;
"Placees"	the subscribers of the Placing Units
"Placing"	the proposed placing of the Placing Units with investors as detailed in this document;
"Placing Proceeds"	the sum of £1,000,000 to be raised (before expenses) by the Placing;
"Placing Shares"	the 20,000,000 Ordinary Shares comprised within the Placing Units;
"Placing Units"	a unit comprising two Placing Shares and one Warrant placed with investors as detailed within this document;
"PNG"	the Independent State of Papua New Guinea;
"PPL"	a petroleum prospecting licence issued under the Oil and Gas Act;
"PPL 235"	the 2,910 sq km area in PNG over which Foreland Oil holds a 100% working interest in the PPL 235 Licence;
"PPL 235 Licence"	PPL number 235 granted by PNG and currently held by Foreland Oil;
"PPL 261"	the 3,958 sq km area immediately north of PPL 235 over which Foreland Oil holds a 100% working interest in the PPL 261 Licence;
"PPL 261 Licence"	PPL number 261 granted by PNG and currently held by Foreland Oil;
"Puk Puk -1 Prospect"	the area located within the area covered by PPL 235 known by the name "Puk Puk-1";
"RBC" or "RBC Capital Markets"	Royal Bank of Canada Europe Limited;
"Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 No. 2001/3755);
"Resolution"	the resolution to be proposed at the GM and set out in the notice of the GM at the end of this document;
"RFC"	RFC Corporate Finance Limited of Sydney, Australia;
"Securities Act"	the US Securities Act of 1933 (as amended);
"Shareholder"	a holder of Ordinary Shares;
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland;
"UKLA" or "UK Listing Authority"	the Financial Services Authority acting in its capacity as competent authority for the purposes of the FSMA;
"uncertificated" or "in uncertificated form"	recorded on the relevant register or other record of the share or other security concerned as being held in uncertificated form in CREST, and title to which, by virtue of the Regulations, may be transferred by means of CREST;
"Warrants"	the 10,000,000 Warrants to subscribe for Ordinary Shares at an exercise price of £0.07 per share, constituted by the Warrant Instrument and to be granted to Placees as part of the Placing, further details of which are set out in paragraph 4 of this document;
"Warrant Instrument"	the deed poll constituting the Warrants and setting out the terms and conditions upon which the Warrants may be exercised, further details of which are set out in paragraph 4 of this document; and
"£"	pounds sterling, the lawful currency for the time being of the United Kingdom.

 

GLOSSARY

"CO2"	carbon dioxide
"BCF"	billion cubic feet
"H2S"	hydrogen sulphide
"P50"	50 per cent probability that value will be greater than or equal to stated value
"TCF"	trillion cubic feet

ENDMSCEASLLAAKNEFE

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