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Sinochem Resources Offer for Emerald Energy

12th Aug 2009 08:42

RNS Number : 2984X

Emerald Energy PLC

12 August 2009

FOR IMMEDIATE RELEASE

12 August 2009

Not for release, publication or distribution (in whole or in part) in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction

Recommended Proposals for the all cash acquisition of

Emerald Energy Plc by

Sinochem Resources UK Limited

an indirect wholly-owned subsidiary of Sinochem Corporation

to be effected by way of a Scheme of Arrangement

under section 152 of the Isle of Man Companies Act 1931

Summary

The Sinochem Board of Directors and the Emerald Board of Directors are pleased to announce the terms of recommended Proposals for an all cash acquisition by Sinochem Resources UK Limited of the entire issued and to be issued share capital of Emerald. The Offeror is a newly-incorporated indirect wholly-owned Subsidiary of Sinochem Corporation formed for the purpose of making the Proposals.

Under the terms of the Proposals, Emerald Shareholders will be entitled to receive 750 pence in cash for each Emerald Share, valuing the entire issued and to be issued ordinary share capital of Emerald at approximately £532.1 million.

The Offer Price represents a premium of:

33.81 per cent. to the Closing Price of 560.50 pence per Emerald Share on 10 July 2009, the last Business Day prior to the announcement by Emerald that it had received an approach;

11.11 per cent. to the Closing Price of 675.00 pence per Emerald Share on 11 August 2009, the last Business Day prior to this Announcement; and

46.64 per cent. to the average Closing Price of 511.44 pence per Emerald Share over the three-month period ended on 9 July 2009.

The Emerald Board of Directors, which has been so advised by Harland Capital, considers the terms of the Proposals to be fair and reasonable. In providing its advice, Harland Capital has taken into account the commercial assessments of the Emerald Board of Directors.

Accordingly, the Emerald Board of Directors unanimously recommends that Emerald Shareholders vote in favour of each of the Resolutions to be proposed at the Meetings.

The Offeror has received irrevocable undertakings to vote in favour of the Proposals at the Meetings (and, if the Offeror exercises its right to acquire the Emerald Shares by means of a takeover offer, to accept any such Offer) from:

all of the Emerald Directors in respect of their entire beneficial holdings of Emerald Shares amounting, in aggregate, to 20,000 Emerald Shares, representing approximately 0.03 per cent. of Emerald's existing issued share capital;

Waterford in respect of its entire beneficial holding of Emerald Shares amounting to 18,456,755 Emerald Shares, representing approximately 29.45 per cent. of Emerald's existing issued share capital; and

Soyuzneftegas in respect of its entire beneficial holding of Emerald Shares amounting to 5,060,000 Emerald Shares, representing approximately 8.08 per cent. of Emerald's existing issued share capital.

Further details of these irrevocable undertakings are set out in paragraph 6 of this Announcement, including details of the circumstances in which each of the irrevocable undertakings shall lapse.

It is intended that the Emerald Shares will be acquired by way of a Court-sanctioned Scheme of Arrangement. Further details are contained in the full text of this Announcement.

The Scheme Circular, containing further details of the Proposals (including notices of the Meetings), together with Forms of Proxy, will be issued to Emerald Shareholders, and, for information only, to persons with information rights and to participants in the Emerald Share Schemes, within 28 days of this Announcement, unless otherwise agreed with the Panel. Resolutions to approve the Proposals will be put to Emerald Shareholders at the Meetings. Subject to the approval of the Emerald Shareholders and the satisfaction or waiver of the other conditions, it is expected that the Scheme will become effective by the end of October 2009. Upon the Scheme becoming effective, it will be binding on all Emerald Shareholders, irrespective of whether or not they attended and/or voted at the Meetings (and if they attended and voted, whether or not they voted in favour).

Emerald offers Sinochem the opportunity to expand its exploration and production presence in Sinochem's focus areas of the Middle East and Latin America

Emerald's portfolio enhances Sinochem's existing reserves and production base and offers attractive growth potential in Syria and Colombia;

Emerald provides access to a talented management team and employee base; and

The transaction marks an important further step in Sinochem's strategy to become a leading diversified, global energy company.

Commenting on the Offer, Mr. Han Gensheng, President of the Offeror and Sinochem Corporation, said:

"Sinochem is delighted to have agreed to acquire Emerald, which will increase our reserves and production in new geographies, diversifying our oil and gas assets further. Emerald's Syrian and Colombian assets have attractive growth potential and, by bringing Emerald into the Sinochem group, will reinforce our position in the Middle East and South America. The acquisition strengthens our operations and represents another step in our strategy of building a global energy company."

Commenting on the Proposals, Alastair Beardsall, Executive Chairman of Emerald, said:

"We welcome today's recommended offer from Sinochem, which represents fair value for Emerald Shareholders and reflects the value of our business and assets. We believe Sinochem will continue to build on our successful track record to develop the business further and bring benefits for our employees and partners."

This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its Appendices). Appendix II contains a summary of the bases of calculation and sources of information for certain items contained in this summary and the remainder of this Announcement. Appendix III to this Announcement contains definitions of certain terms used in this summary and the remainder of this Announcement.

In accordance with Rule 19.11 of the Takeover Code, a copy of this Announcement will be published on the following websites: www.emeraldenergy.com and www.sinochem.com or www.sinochem.com/Portals/0/Skins/index_1027/tabid/613/Default.aspx.

PRESS ENQUIRIES:

For further information contact:

Sinochem

Huang Shouzhi

Pelham PR +44 (0)20 7337 1500

PR adviser to Sinochem Resources UK Limited

James Henderson

Andy Cornelius

Mark Antelme

Standard Chartered +44 (0)20 7885 8888

Financial adviser to Sinochem Resources UK Limited

Amer Baig

Geraldine Murphy

Laurence Barnaud-Bettle

Issac Jacob

The Balloch Group

Financial consultant to Sinochem Resources UK Limited

Howard R. Balloch

Panmure Gordon +44 (0)20 7459 3600

Corporate broker to Sinochem Resources UK Limited

Richard Gray

Aubrey Powell

Callum Stewart

Emerald +44 (0)20 7925 2440

Lisa Hibberd

Alastair Beardsall

Harland Capital +44 (0)20 3051 9306

Financial adviser to Emerald

Harry Sutherland

Evolution Securities Limited +44 (0)20 7071 4300

Stockbrokers to Emerald

Chris Sim

Jefferies International Limited +44(0)20 7029 8000

Stockbrokers to Emerald

Chris Snoxall

This Announcement does not constitute an offer or invitation to sell or purchase any securities or the solicitation of an offer to buy any securities pursuant to the Proposals or otherwise. The Proposals will be made solely by means of the Scheme Circular and the Forms of Proxy, which will contain the full terms and conditions of the Proposals. Emerald Shareholders are advised to read the formal documentation in relation to the Proposals carefully, once it has been issued.

Standard Chartered, which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Offeror and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than the Offeror for providing the protections afforded to clients of Standard Chartered nor for providing advice in relation to the matters described in this Announcement.

The Balloch Group is acting exclusively for the Offeror and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than the Offeror for providing the protections afforded to clients of The Balloch Group nor for providing advice in relation to the matters described in this Announcement.

Panmure Gordon, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Offeror and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than the Offeror for providing the protections afforded to clients of Panmure Gordon nor for providing advice in relation to the matters described in this Announcement.

Harland Capital, which is authorised and regulated in the United Kingdom by the Financial Services Authority (as an appointed representative to Neutralis Asset Management LLP), is acting for Emerald and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Emerald for providing the protections afforded to its clients or for providing advice in relation to the contents of this Announcement, or for any other transaction, arrangement or matters referred to in this Announcement.

Evolution Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Emerald and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Emerald for providing the protections afforded to its clients or for providing advice in relation to the contents of this Announcement, or for any other transaction, arrangement or matters referred to in this Announcement.

Jefferies International Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Emerald and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Emerald for providing the protections afforded to its clients or for providing advice in relation to the contents of this Announcement, or for any other transaction, arrangement or matters referred to in this Announcement.

The distribution of this Announcement in jurisdictions other than the United Kingdom and the Isle of Man may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK and the Isle of Man should inform themselves about, and observe, any applicable requirements. This Announcement has been prepared for the purposes of complying with English and Isle of Man law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England and the Isle of Man.

The Offeror may purchase Emerald Shares otherwise than under the Proposals, such as in the open market or privately negotiated purchases. Such purchases may be made either directly or through a broker and such purchases shall comply with the applicable laws of England and the Isle of Man, as well as the rules of the United Kingdom Listing Authority, the London Stock Exchange and the Takeover Code. Information about any such purchases will be available from a Regulatory Information Service.

No statement in this Announcement is intended as a profit forecast or profit estimate and no statement in this Announcement should be interpreted to mean that the future earnings per share of Emerald for current or future financial periods will necessarily match or exceed the historical or published earnings per share of Emerald.

Neither the content of Sinochem's or Emerald's website (or any other website) nor the content of any website accessible from hyperlinks on any such website is incorporated into, or forms part of, this Announcement.

Notice to US investors in Emerald

The Proposals relate to the shares of an Isle of Man company, are subject to UK and Isle of Man disclosure requirements (which are different from those of the US) and are proposed to be made by means of a scheme of arrangement provided for under the Isle of Man Act. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act. Accordingly, the Proposals are subject to the disclosure requirements and practices applicable in the UK and the Isle of Man to schemes of arrangement which differ from the disclosure requirements of the US tender offer rules. Financial information included in this Announcement has been prepared, unless specifically stated otherwise, in accordance with accounting standards applicable in the UK and the Isle of Man and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If the Offeror exercises its right to implement the Acquisition by way of a takeover offer, the takeover offer will be made in compliance with applicable US laws and regulations.

The receipt of cash pursuant to the Acquisition by a US holder of Emerald Shares as consideration for the transfer of its Emerald Shares pursuant to the Acquisition may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each holder of Emerald Shares is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him.

It may be difficult for US holders of Emerald Shares to enforce their rights and claims arising out of US federal securities laws, since the Offeror and Emerald are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US holders of Emerald Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more of any class of "relevant securities" of Emerald, all "dealings" in any "relevant securities" of Emerald (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Proposals become effective, lapse or are otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Emerald, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in "relevant securities" of Emerald by the Offeror or Emerald, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Takeover Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.

Forward-looking statements

Certain statements in this Announcement constitute forward-looking statements. The forward-looking statements contained herein include statements about the expected effects of the Proposals, the expected timing and scope of the Proposals and other statements other than in relation to historical facts. Forward-looking statements include, without limitation, statements typically containing words such as "intends", "expects", "anticipates", "targets", "estimates", "believes", "should", "plans", "will", "expects" and similar expressions or statements that are not historical facts are intended to identify those expressions or statements as forward-looking statements. These statements are based on the current expectations of the Offeror and Emerald and are naturally subject to uncertainty and changes in circumstances. By their nature, forward-looking statements involve risk and uncertainty and the factors described in the context of such forward-looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction or waiver of the conditions to the Proposals, local and global political and economic conditions, the price of oil, gas and other hydrocarbons, foreign exchange rate fluctuations and interest rate fluctuations (including those from any potential credit rating decline) and legal or regulatory developments and changes. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements. Neither the Offeror nor Emerald, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. Other than in accordance with their legal or regulatory obligations (including under the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Services Authority and the Takeover Code), neither the Offeror nor Emerald is under any obligation and each of them expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

12 August 2009

Recommended Proposals for the all cash acquisition of

Emerald Energy Plc by

Sinochem Resources UK Limited

an indirect wholly-owned subsidiary of Sinochem Corporation

to be effected by way of a Scheme of Arrangement

under section 152 of the Isle of Man Companies Act 1931

1. Introduction

2. The Proposals

It is intended that the Emerald Shares will be acquired by way of a Court-sanctioned Scheme of Arrangement. Under the terms of the Scheme, which will be subject to the conditions and further terms set out in Appendix I of this Announcement and to be set out in full in the Scheme Document, Scheme Shareholders will be entitled to receive for each Emerald Share 750 pence in cash, valuing the entire issued and to be issued ordinary share capital of Emerald at approximately £532.1 million.

The Offer Price represents a premium of:

33.81 per cent. to the Closing Price of 560.50 pence per Emerald Share on 10 July 2009, the last Business Day prior to the announcement by Emerald that it had received an approach;

11.11 per cent. to the Closing Price of 675.00 pence per Emerald Share on 11 August 2009, the last Business Day prior to this Announcement; and

46.64 per cent. to the average Closing Price of 511.44 pence per Emerald Share over the three-month period ended on 9 July 2009.

The implementation of the Proposals will be subject to the conditions and certain further terms referred to in Appendix I to this Announcement and to be set out in the Scheme Circular. Subject to the approval of the Emerald Shareholders and the satisfaction or waiver of the other conditions, it is expected that the Scheme will become effective by the end of October 2009.

Upon the Scheme becoming effective, it will be binding on all Emerald Shareholders, irrespective of whether or not they attended and/or voted at the Meetings (and if they attended and voted, whether or not they voted in favour).

3. Recommendation

Accordingly, the Emerald Board of Directors unanimously recommends that Emerald Shareholders vote in favour of each of the Resolutions to be proposed at the Meetings, as they have irrevocably undertaken to do in respect of their entire beneficial holdings of Emerald Shares amounting to (as at the date of this Announcement), in aggregate, 20,000 Emerald Shares, representing approximately 0.03 per cent. of the existing issued ordinary share capital of Emerald.

4. Background to and reasons for the Proposals

With current upstream operations in the United Arab Emirates, Yemen, Tunisia, Ecuador, China and Indonesia, Sinochem is focused on enhancing its overseas oil and gas asset portfolio, particularly in the Middle East and Latin America.

Emerald's established presence in Colombia and Syria offers a substantial reserves base and promising exploration prospects. Sinochem believes that the combination of Emerald's assets with its own would consolidate its presence across the Middle East and Latin America as well as provide a solid platform to create further value. Sinochem is well placed to provide the technical and financial resources to develop the asset base.

The transaction represents an important step in Sinochem's strategy to become a global energy company.

Benefits to Emerald

Emerald Shareholders would benefit from a fair price in cash which offers certainty. The Company would also gain access to Sinochem's technical expertise and financial strength, in order to further enhance the underlying value of its asset base. The transaction offers Emerald's employees a chance to become part of a larger, global organisation with a broader range of career development opportunities.

Benefits to Sinochem

Sinochem has noted Emerald's exploration and exploitation successes to date and believes it can positively complement Emerald's operations and accelerate the growth of the portfolio.

Sinochem's financial resources would also enable it to take advantage of future business development opportunities in the market to further grow its position.

The transaction diversifies Sinochem's E&P portfolio, enhances its existing reserves and production base and increases its footprint in the Middle East and Latin America, which are already key focus areas for Sinochem.

5. Background to and reasons for recommending the Proposals

In addition to its recent track record of exploration success in Syria at Khurbet East and Yousefieh fields, Emerald has also discovered further reserves with significant development potential in Colombia, particularly at its Capella and Gigante properties. Emerald continues to explore on other prospective assets in its portfolio and to add further licences, creating exploration opportunities that have the potential to continue this success.

Although the Emerald Board of Directors believes that Emerald would have a strong future as an independent business, it considers that the Proposals from Sinochem represent an opportunity for Emerald Shareholders to realise the value of their investment in Emerald at an attractive premium to its current market value, as set out in paragraph 2 above.

6. Irrevocable undertakings

In aggregate, the Offeror has received irrevocable undertakings to vote in favour of the Proposals in respect of 23,536,755 Emerald Shares, representing approximately 37.56 per cent. of Emerald's existing issued ordinary share capital. The following Emerald Directors and Emerald Shareholders have given irrevocable undertakings to vote in favour of the Proposals:

Emerald Directors
Name	Number of Emerald Shares	Percentage of Emerald's existing issued ordinary share capital

Alastair Beardsall	0	0
Angus MacAskill	0	0
Edward Grace	0	0
Keith Henry	20,000	0.03
Merfyn Roberts	0	0
Sub-total	20,000	0.03

Emerald Shareholders
Name	Number of Emerald Shares	Percentage of Emerald's existing issued ordinary share capital

Waterford	18,456,755	29.45
Soyuzneftegas	5,060,000	8.08
Sub-total	23,516,755	37.53

Grand total	23,536,755	37.56

The irrevocable undertakings shall lapse in the following circumstances: (i) the Offeror announcing, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement Offer or Scheme being announced by it in accordance with Rule 2.5 of the Takeover Code at the same time; (ii) the Offer or Scheme lapsing or being withdrawn and no new, revised or replacement Offer or Scheme having been announced by the Offeror in accordance with Rule 2.5 of the Takeover Code in its place or being announced in accordance with Rule 2.5 of the Takeover Code at the same time; (iii) in the case of Waterford's and Soyuzneftegas's irrevocable undertakings only, on or before the date which is 23 days after the Scheme Circular or any offer document is issued to Emerald Shareholders, any person other than the Offeror and any person acting in concert (as defined in the Takeover Code) with the Offeror announcing a firm intention to make an offer in accordance with Rule 2.5 of the Takeover Code to acquire all of the share capital of Emerald with the value of the consideration, and the conditions of the offer, pursuant to the terms of any such competing bid (as at the date of any such competing announcement under Rule 2.5 of the Code) being, in each case in the reasonable opinion of Standard Chartered, more than 862.5 pence per Emerald Share and the conditions of such competing bid being more certain to be satisfied or waived; and (iv) in the case of Waterford's and Soyuzneftegas's irrevocable undertakings only, at 11.59 p.m. (London time) on 31 December 2009.

7. Financing of the Proposals

The cash consideration payable by the Offeror under the terms of the Proposals will be funded using a combination of Sinochem's existing resources and committed loan facilities arranged by the Bank of Communications Offshore Banking Center for the purposes of the Proposals.

Standard Chartered is satisfied that sufficient resources are available to the Offeror to satisfy in full the cash consideration payable under the Proposals.

8. Information relating to Sinochem Group and the Offeror

Sinochem Group, incorporated in China in 1950, is one of China's largest state-owned enterprises focusing on energy, agriculture, chemicals, finance and real estate. It has been consistently named in the Fortune Global 500 and was most recently ranked as the 170th largest company. Sinochem has a number of interests in China and abroad including Sinochem International Corp. (listed in Shanghai), Sinofert Holdings Ltd. (listed in Hong Kong) and Franshion Properties (China) Ltd. (listed in Hong Kong).

Sinochem has operated in the international oil business for several decades and started making its first overseas oil and gas investments in 2003. Since then it has successfully completed approximately US$1 billion of overseas acquisitions in the energy sector, focusing primarily in Latin America, Africa and the Middle East. Sinochem operates oil and gas projects in the UAE, has investments in Yemen, Tunisia, Ecuador, Indonesia and China and is engaged in oil trading, refining, marketing and logistics.

Sinochem Corporation is a joint stock limited company incorporated in China in 2009. As its controlling shareholder, Sinochem Group has injected all of its core businesses including those abovementioned and most of its assets into Sinochem Corporation.

The Offeror is a newly-incorporated private limited company incorporated in England and Wales and an indirect wholly-owned Subsidiary of Sinochem Corporation, formed for the purpose of making the Proposals. The Offeror has not traded since its incorporation nor has it entered into any obligations other than in connection with the Proposals. The current directors of the Offeror are Mr Han Gensheng, Mr Geng Wenzhi and Ms Lin Yu.

9. Information on Emerald

Emerald is a UK-based company, listed on the main market of the London Stock Exchange, and is included in the FTSE-250. It is engaged in exploration and production of hydrocarbons in South America and the Middle East.

As at 31 December 2008 Emerald had proven and probable working interest reserves of 56.7 mmbbl and contingent resources, on a best estimate working interest basis, of 37.9 mmbbl.

Emerald has a 50% interest in Block 26, Syria, which includes both the Khurbet East and Yousefieh fields and interests in nine licences in Colombia and one in Peru, covering Block 163. Its Colombian properties include significant interests in the Gigante, Campo Rico, Vigia, Centauro Sur, Silfide, Aureliano, Totumal and Capella fields and the Maranta, Agerato, Durillo and VSM32 exploration projects.

In Syria, the Khurbet East field is currently on production at over 14,000 bopd (gross) with fluid processing capacity of the early production facility recently expanded to 18,000 bfpd (gross). A material oil discovery in the Yousefieh field is scheduled for appraisal drilling in the third quarter of 2009.

In Colombia, Emerald is developing a number of existing fields with testing currently ongoing at the recently drilled Gigante-2. A material heavy oil discovery at about 3,500 feet at Capella is currently being appraised with a planned seven well long-term testing programme in progress and an environmental permit is being sought to allow further drilling in the northern section of the property.

For the financial year ended 31 December 2008, Emerald reported audited profit on ordinary activities before taxation of US$52.5 million (2007: US$8.6 million) on audited turnover of US$86.0 million (2007: US$44.4 million). Audited net assets as at 31 December 2008 were US$125.3 million (31 December 2007: US$89.7 million). For the six months ended 30 June 2009, Emerald reported unaudited profit on ordinary activities before taxation of US$16.8 million (2008: US$19.0 million) on unaudited turnover of US$42.0 million (2008: US$29.6 million). Unaudited net assets as at 30 June 2009 were US$146.7 million (30 June 2008: US$102.0 million).

10. Emerald Share Schemes and Convertible Bonds

The Scheme will extend to any Emerald Shares that are unconditionally allotted or issued pursuant to the exercise of options or vesting of awards under the Emerald Share Schemes, or the exercise of conversion rights in relation to instruments convertible into Emerald Shares, in each case on or prior to the Scheme Record Time.

Appropriate proposals will be made to participants in the Emerald Share Schemes pursuant to Rule 15 of the Takeover Code at the same time as the Scheme Circular is issued or as soon as possible thereafter, details of which will be set out in separate letters to be sent to participants in the Emerald Share Schemes.

The Offeror and Credit Suisse have entered into a Bonds Sale and Purchase Agreement pursuant to which the Offeror has agreed, conditional upon completion of the Acquisition, to purchase from Credit Suisse all of the Convertible Bonds for a consideration equal to the Offer Price per Emerald Share under the Proposals payable by the Offeror multiplied by the number of Emerald Shares to which Credit Suisse would be entitled under the terms of the Convertible Bonds on completion of the Acquisition, plus unpaid accrued interest on the Convertible Bonds up to the date of completion of the Acquisition.

The Bonds Sale and Purchase Agreement terminates in certain circumstances, including if:

the Offeror announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement Offer or Scheme is announced by the Offeror in accordance with Rule 2.5 of the Takeover Code at the same time;

the Offer or Scheme lapses or is withdrawn and no new, revised or replacement Scheme or Offer has been announced, in accordance with Rule 2.5 of the Takeover Code, in its place or is announced by the Offeror, in accordance with Rule 2.5 of the Takeover Code, at the same time;

the Acquisition has not become effective by 31 December 2009 or such later date (if any) as the Offeror and Emerald may agree in writing; or

either or both of the irrevocable undertakings from Waterford and Soyuzneftegas (described in paragraph 6 above) lapses in accordance with its terms.

11. Management and employees

The Offeror recognises the significant achievements of Emerald's management team and its employees in developing the Emerald business and attaches great importance to their skills and experience. The Offeror believes that they will continue to play an important role in, and benefit from, greater opportunities within the Sinochem group. As such, the Offeror does not currently intend to make any material changes to Emerald's staffing levels, nor to any conditions of employment. The Offeror has no current plans to change the locations of Emerald's places of business.

The Offeror has given the Emerald Board of Directors assurances that the existing employment rights of employees of Emerald will be fully safeguarded following completion of the Acquisition.

12. Disclosure of interests in relevant securities of Emerald

The Offeror has received the irrevocable undertakings as described in paragraph 6 above and entered into the Bonds Sale and Purchase Agreement as described in paragraph 10 above.

As at the close of business on 11 August 2009, being the last Business Day prior to this Announcement, neither the Offeror, nor any of the Sinochem Resources Directors nor, so far as the Offeror is aware, any party acting in concert with the Offeror, had: (i) any interest in or right to subscribe for any relevant securities of Emerald; (ii) any short positions in respect of relevant securities of Emerald (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; or (iii) borrowed or lent any relevant security of Emerald (save for any borrowed shares which have been on-lent or sold).

In view of the requirement for confidentiality, the Offeror has not made any enquiries in this respect of certain parties who may be deemed by the Panel to be acting in concert with it for the purposes of the Proposals.

13. Implementation Agreement

The Offeror and Emerald have entered into an Implementation Agreement which contains, amongst other things, certain obligations and commitments in relation to implementation of the Proposals on a timely basis, non-solicitation undertakings by Emerald, a right for the Offeror to match any Superior Proposal and provisions in relation to the conduct of Emerald's business.

Under the Implementation Agreement, Emerald has agreed, subject to applicable fiduciary duties, amongst other things that:

(a) it shall and it shall procure that its directors and its advisers shall not directly or indirectly, solicit, initiate, discuss or negotiate any offer from any third party (or provide any information to any other third party in respect thereof except to the extent required by Rule 20.2 of the Takeover Code) relating to an offer for Emerald's securities or assets; and

(b) it shall proactively share the details of any approaches (including, without limitation, as to price, form of consideration and the nature of the party approaching and any changes to the foregoing) and any information that it has provided to any such third party to the Offeror.

Emerald has also agreed, without prejudice to the provisions of the Break Fee Agreement:

(i) to notify the Offeror of any Competing Proposal that it or the Emerald Directors consider to be a Superior Proposal and not to recommend or agree to recommend any Competing Proposal or Superior Proposal or withdraw the Scheme until 5.00 p.m. (London time) on the fifth London and Beijing business day after any announcement under Rule 2.5 of the Takeover Code of any Competing Proposal, in order to enable the Offeror to exercise its right to match any Superior Proposal by making a revised offer; and

(ii) if the Offeror does make a revised offer within the permitted time which, in the reasonable opinion of the Emerald Directors, is equal or superior to the terms of the Superior Proposal, to use all reasonable endeavours to procure that the Emerald Directors make a unanimous and unqualified recommendation of any such revised offer.

The Implementation Agreement terminates in certain circumstances, including:

if the Scheme lapses or terminates, unless the Offeror has elected prior to such time, to implement the Acquisition by way of the Offer;

if the Offeror elects to implement the Acquisition by way of the Offer, the Offer is withdrawn by the Offeror (with the consent of the Panel, if required) or lapses;

if at any time prior to satisfaction of the conditions there is a Competing Proposal which subsequently becomes effective, becomes or is declared unconditional in all respects or is otherwise completed resulting in more than 50 per cent. of Emerald Shares being controlled by a third party other than the Offeror (or an associate or person acting in concert with the Offeror); or

if the Acquisition has not become effective by 31 January 2010 or such later date (if any) as the Offeror and Emerald may agree in writing.

14. Break Fee Agreement

As a pre-condition to the Offeror agreeing to announce the Proposals, Emerald has agreed to pay a fee of £3 million (subject to any adjustment for VAT) by way of compensation should:

(a) the Emerald Board of Directors (or any committee of the Emerald Board of Directors) withdraw, qualify or adversely modify for whatever reason the terms of its recommendation of the Acquisition or agree or resolve to recommend a Competing Proposal, in each case prior to the Offeror's offer lapsing or being withdrawn or (with the consent of the Panel) not being made; or

(b) Emerald or any of its Subsidiary Undertakings or any of its or their respective directors or advisers materially breach or cause any material breach of the right to match, non-solicitation and conduct of business provisions of the Implementation Agreement (and, in the case of any such breach which is capable of remedy, which is not remedied within 5 Business Days of notification of the relevant breach(es) by the Offeror to Emerald) and the Offeror's offer consequently subsequently lapses or is withdrawn or (with the consent of the Panel) is not made.

In the event that the Offeror's offer lapses or is withdrawn or (with the consent of the Panel) is not made and, before this, a Competing Proposal is announced and that Competing Proposal (or any other Competing Proposal announced before Emerald ceases to be in an offer period (as defined in the Takeover Code) for more than one London and Beijing business day) subsequently becomes or is declared unconditional in all respects or is otherwise completed then Emerald would be required to pay a fee of £5.1 million (subject to any adjustment for VAT) by way of compensation (less any amount already received by the Offeror under the provisions described above).

15. Structure of the Proposals

The Acquisition is expected to be effected by means of a Scheme of Arrangement between Emerald and Scheme Shareholders. This procedure involves, amongst other things, an application by Emerald to the Court to sanction the Scheme.

The implementation of the Scheme will be subject to the conditions and further terms referred to in Appendix I to this Announcement and to be set out in full in the Scheme Circular. To become effective, the Scheme will require, amongst other things, the following events to occur on or before 31 January 2010 or such later date (if any) as the Offeror and Emerald may, with the consent of the Panel, agree and (if required) the Court may approve:

the Scheme being approved by a majority in number representing three-fourths or more in value of the Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting (or at any adjournment thereof);

the special resolutions in connection with and required to implement the Scheme being duly passed by not less than 75 per cent. of the votes cast at the EGM (or at any adjournment thereof); and

the Court sanctioning the Scheme and confirming any related reduction of capital of Emerald (with or without modification, on terms agreed by the Offeror and Emerald) and an office copy of the Court order being delivered to the Companies Registry of the Isle of Man Financial Supervision Commission (and, if required, registration of the Court Order by the Companies Registry of the Isle of Man Financial Supervision Commission).

Subject to the approval of the Emerald Shareholders and the satisfaction or waiver of the other conditions, it is expected that the Scheme will become effective by the end of October 2009.

16. Delisting and re-registration

Upon or shortly after the Scheme becoming effective, the London Stock Exchange will be requested to cancel trading in Emerald Shares on the London Stock Exchange's main market for listed securities and the UK Listing Authority will be requested to cancel the listing of the Emerald Shares from the Official List.

On the Scheme Effective Date, share certificates in respect of the Emerald Shares will cease to be valid and should be destroyed. In addition, entitlements to Emerald Shares held within the CREST system will be cancelled on the Scheme Effective Date.

It is also intended that, following the Scheme becoming effective, Emerald will be re-registered as a limited company under the Isle of Man Companies Act 2006.

17. General

Appendix II contains a summary of the bases of calculation and sources of information for certain items contained in this Announcement.

Appendix III contains definitions of certain terms used in this Announcement.

The Offeror reserves the absolute right to elect, subject to the prior consent of the Panel, to implement the Proposals by way of a takeover offer in accordance with the Takeover Code as it may determine in its absolute discretion. In such event, such offer will be implemented on the same terms (subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such lesser percentage (being more than 50 per cent.) as the Offeror may decide or the Panel may require) of the Emerald Shares to which such offer would relate), so far as applicable, as those which would apply to the Scheme. Furthermore, if sufficient acceptances of such offer are received and/or sufficient Emerald Shares are otherwise acquired, it is the intention of the Offeror to apply the provisions of section 154 of the Isle of Man Act to acquire compulsorily any outstanding Emerald Shares to which any such Offer relates.

PRESS ENQUIRIES:

For further information contact:

Sinochem

Huang Shouzhi

Pelham PR +44 (0)20 7337 1500

PR adviser to Sinochem Resources UK Limited

James Henderson

Andy Cornelius

Mark Antelme

Standard Chartered +44 (0)20 7885 8888

Financial adviser to Sinochem Resources UK Limited

Amer Baig

Geraldine Murphy

Laurence Barnaud-Bettle

Issac Jacob

The Balloch Group

Financial consultant to Sinochem Resources UK Limited

Howard R. Balloch

Panmure Gordon +44 (0)20 7459 3600

Corporate broker to Sinochem Resources UK Limited

Richard Gray

Aubrey Powell

Callum Stewart

Emerald +44 (0)20 7925 2440

Lisa Hibberd

Alastair Beardsall

Harland Capital +44 (0)20 3051 9306

Financial adviser to Emerald

Harry Sutherland

Evolution Securities Limited +44 (0)20 7071 4300

Stockbrokers to Emerald

Chris Sim

Jefferies International Limited +44(0)20 7029 8000

Stockbrokers to Emerald

Chris Snoxall

Notice to US investors in Emerald

Dealing disclosure requirements

Forward-looking statements

Appendix I

Conditions and Further Terms of the Proposals

Conditions to the Proposals

The Proposals will be conditional upon the Scheme, subject to the Takeover Code, becoming unconditional and becoming effective by no later than 31 January 2010 or such later date (if any) as the Offeror and Emerald may, with the consent of the Panel, agree and (if required) the Court may approve.

The Scheme will be subject to the following conditions:

the approval of the Scheme by a majority in number representing three-fourths. or more in value of the holders of the Emerald Shares (or, if applicable, the relevant class or classes thereof) present and voting, either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court (or at any adjournment of any such meeting);

the resolution or resolutions required to approve and implement the Scheme as set out in the notice of the EGM in the Scheme Circular being duly passed by the requisite majority at the EGM (or at any adjournment thereof) and not subsequently revoked; and

the sanction of the Scheme (and the confirmation of any related reduction of capital of Emerald) by the Court (in each case without modification or with modification as agreed by the Offeror and Emerald) and the delivery for registration of the Court Order to the Companies Registry of the Isle of Man Financial Supervision Commission (and, if required, registration of the Court Order by the Companies Registry of the Isle of Man Financial Supervision Commission).

In addition, Emerald and the Offeror have agreed that, save as stated in paragraph 5 below, the Scheme will be conditional on the following matters and, accordingly, the necessary actions to make the Proposals effective will not be taken unless the following conditions (as amended, if appropriate) have been satisfied or waived:

no Third Party (as defined below) having intervened and there not continuing to be outstanding any statute, regulation or order of any Third Party in each case which is or is likely to be material in the context of the Acquisition which would or might reasonably be expected to:

make the Scheme, its implementation or the acquisition or proposed acquisition by the Offeror of any shares or other securities in, or control of, Emerald or any member of the Wider Emerald Group void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly restrain, prevent, prohibit, restrict or delay the same or impose additional conditions or obligations with respect to the Scheme or such acquisition, or otherwise impede, challenge or interfere with the Scheme or such acquisition, or require amendment to the terms of the Scheme or the acquisition or proposed acquisition of any Emerald Shares or the acquisition of control or management of Emerald or the Wider Emerald Group by the Offeror or any member of the Wider Offeror Group;

limit or delay, or impose any material limitations on, the ability of any member of the Wider Offeror Group or any member of the Wider Emerald Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities convertible into Emerald Shares in, or to exercise voting or management control over, any member of the Wider Emerald Group or any member of the Wider Offeror Group;

require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider Offeror Group of any shares or other securities in Emerald;

require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider Emerald Group or by any member of the Wider Offeror Group of all or any portion of their respective businesses, assets or properties or limit the ability of any of them to conduct any of their respective businesses or to own or control any of their respective assets or properties or any part thereof;

except pursuant to section 154 of the Isle of Man Act section require any member of the Wider Offeror Group or of the Wider Emerald Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in any member of the Wider Emerald Group owned by any third party;

limit the ability of any member of the Wider Offeror Group or of the Wider Emerald Group to conduct or integrate or coߛordinate its business, or any material part of it, with the businesses or any part of the businesses of any other member of the Wider Offeror Group or of the Wider Emerald Group;

result in any member of the Wider Emerald Group or the Wider Offeror Group ceasing to be able to carry on business under any name under which it presently does so; or

otherwise adversely affect any or all of the business, assets, profits, financial or trading position or prospects of any member of the Wider Offeror Group or of the Wider Emerald Group in each such case to the extent that it is material in the context of the Wider Emerald Group and/or the Wider Sinochem Group taken as a whole,

and all applicable waiting and other time periods during which any Third Party could intervene under the laws of any relevant jurisdiction having expired, lapsed or been terminated;

all notifications and filings which are necessary or are reasonably considered appropriate by the Offeror having been made, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with or obtained in terms and in a form reasonably satisfactory to the Offeror, in each case (and to the extent that it is material) in connection with the Scheme or the Acquisition or the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Emerald or any other member of the Wider Emerald Group or the carrying on by any member of the Wider Emerald Group of its business, unless otherwise waived by the Offeror, and no temporary restraining order, preliminary or permanent injunction or other order having been issued and being in effect by a court or other Third Party of competent jurisdiction which has the effect of making the Scheme or the Acquisition illegal or otherwise prohibiting the consummation of the Scheme or the Acquisition;

all Authorisations which are necessary or are reasonably considered necessary or appropriate by the Offeror in any relevant jurisdiction for or in respect of the Scheme or the Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Emerald or any other member of the Wider Emerald Group by any member of the Wider Offeror Group or the carrying on by any member of the Wider Emerald Group of its business having been obtained, in terms and in a form reasonably satisfactory to the Offeror, from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider Emerald Group has entered into contractual arrangements and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same in connection with the Scheme or the Acquisition;

since 31 December 2008 and except as disclosed in Emerald's annual report and accounts for the year then ended or as publicly announced by Emerald prior to the date of this Announcement (by the delivery of an announcement to a Regulatory Information Service) or as fairly disclosed prior to the date of this Announcement to the Offeror by or on behalf of Emerald in the course of negotiations, there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Wider Emerald Group is a party, or by or to which any such member or any of its assets is or are or may be bound, entitled or subject or any circumstance, which, in each case as a consequence of the Scheme or the Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control of, Emerald or any other member of the Wider Emerald Group by any member of the Wider Offeror Group or otherwise, could or might reasonably be expected to result in:

any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any member of the Wider Emerald Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated repayment date or the ability of any member of the Wider Emerald Group to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn;

the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Wider Emerald Group or any such mortgage, charge or other security interest (wherever created, arising or having arisen) becoming enforceable;

any such arrangement, agreement, licence, permit, franchise or other instrument, or the rights, liabilities, obligations or interests of any member of the Wider Emerald Group thereunder, being, or becoming capable of being, terminated or adversely modified or affected or any adverse action being taken or any obligation or liability arising thereunder;

any material asset or material interest of any member of the Wider Emerald Group being or falling to be disposed of or ceasing to be available to any member of the Wider Emerald Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Emerald Group otherwise than in the ordinary course of business;

any member of the Wider Emerald Group ceasing to be able to carry on business under any name under which it presently does so;

the creation of material liabilities (actual or contingent) by any member of the Wider Emerald Group other than in the ordinary course of business;

the rights, liabilities, obligations or interests of any member of the Wider Emerald Group under any such arrangement, agreement, licence, permit, franchise or other instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being terminated or adversely modified or affected; or

the financial or trading position or the prospects or the value of any member of the Wider Emerald Group being prejudiced or adversely affected,

and, except as aforesaid, no event having occurred which, under any provision of any such arrangement, agreement, licence, permit or other instrument, would be reasonably likely to result in any of the events or circumstances which are referred to in paragraphs (i) to (viii) of this condition 3(d);

since 31 December 2008 and except as disclosed in Emerald's annual report and accounts for the year then ended or as otherwise publicly announced by Emerald prior to the date of this Announcement (by the delivery of an announcement to a Regulatory Information Service) or as otherwise fairly disclosed prior to this Announcement in writing to the Offeror by or on behalf of Emerald in the course of negotiations or otherwise as a result of the Acquisition no member of the Wider Emerald Group having:

issued or agreed to issue, or authorised the issue of, additional shares of any class, or securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or transferred or sold any shares out of treasury other than: (A) as between Emerald and whollyߛowned Subsidiaries of Emerald; (B) any shares issued upon the exercise of any options granted under any of the Emerald Share Schemes; or (C) on the issue of Emerald Shares pursuant to the terms of the Convertible Bonds;

purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital;

recommended, declared, paid or made any dividend or other distribution whether payable in cash or otherwise or made any bonus issue (other than to Emerald or a whollyߛowned Subsidiary of Emerald);

except as between Emerald and its wholly-owned Subsidiaries or between such wholly-owned Subsidiaries made or authorised any material change in its loan capital;

(other than any acquisition or disposal in the ordinary course of business or a transaction between Emerald and a whollyߛowned Subsidiary of Emerald or between such wholly-owned Subsidiaries) merged with, demerged or acquired any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any assets (including shares in any undertaking and trade investments) or authorised the same (in each case to an extent which is material in the context of the Emerald Group taken as a whole);

issued, agreed to issue or authorised the issue of, or made any change in or to, any debentures or (except in the ordinary course of business or except as between Emerald and its wholly-owned Subsidiaries or between such wholly-owned Subsidiaries) incurred or increased any indebtedness or liability (actual or contingent) which in any case is material in the context of the Emerald Group taken as a whole;

entered into, varied, or authorised any agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which:

is of a long term, onerous or unusual nature or magnitude or which is reasonably likely to involve an obligation of such nature or magnitude; or

is reasonably likely to restrict the business of any member of the Wider Emerald Group,

and which in any case is material in the context of the Emerald Group taken as a whole;

except as between Emerald and its wholly-owned Subsidiaries or between such wholly-owned Subsidiaries entered into, implemented, effected or authorised any merger, demerger, reconstruction, amalgamation, scheme, commitment or other transaction or arrangement in respect of itself or another member of the Wider Emerald Group, which in any case is material in the context of the Emerald Group taken as a whole;

entered into or varied the terms of, any contract, agreement or arrangement with any of the directors or senior executives of any member of the Wider Emerald Group;

taken any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its windingߛup (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction which in any case is material in the context of the Emerald Group taken as a whole;

been unable, or admitted in writing 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;

waived or compromised any claim, which is material in the context of the Emerald Group taken as a whole;

made any alteration to its memorandum or articles of association which is material in the context of the Scheme or the Acquisition;

other than as a result of the Acquisition, proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit (including in relation to any personal defined contribution pension scheme(s) of any Director or any person employed by the Wider Emerald Group) relating to the employment or termination of employment of any person employed by the Wider Emerald Group; or

other than as a result of the Acquisition, entered into any agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this condition 3(e);

since 31 December 2008 and except as disclosed in Emerald's annual report and accounts for the year then ended or as otherwise publicly announced by Emerald prior to this Announcement (by the delivery of an announcement to a Regulatory Information Service) or as otherwise fairly disclosed prior to the date of this Announcement in writing to the Offeror by or on behalf of Emerald in the course of negotiations:

there having been no adverse change or deterioration in the business, assets, financial or trading positions or profit or prospects of any member of the Wider Emerald Group which in any case is material in the context of the Emerald Group taken as a whole;

no contingent or other liability of any member of the Wider Emerald Group having arisen or become apparent or increased which in any case is material in the context of the Emerald Group taken as a whole;

no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Emerald Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider Emerald Group which in any case is material in the context of the Emerald Group taken as a whole; and

(other than as a result of the Scheme or the Acquisition) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened, announced, implemented, instituted by or against or remaining outstanding against or in respect of any member of the Wider Emerald Group which in any case is material in the context of the Emerald Group taken as a whole;

the Offeror not having discovered other than to the extent otherwise publicly announced by Emerald prior to this Announcement (by the delivery of an announcement to a Regulatory Information Service) or as otherwise fairly disclosed prior to the date of this Announcement in writing to the Offeror by or on behalf of Emerald in the course of negotiations:

that any financial or business or other information concerning the Wider Emerald Group disclosed at any time by or on behalf of any member of the Wider Emerald Group, whether publicly, to any member of the Wider Offeror Group, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make any information contained therein not misleading to an extent which in any case is material in the context of the Emerald Group taken as a whole;

that any member of the Wider Emerald Group is subject to any liability (actual or contingent) which is not disclosed in Emerald's annual report and accounts for the financial year ended 31 December 2008 and which in any case is material in the context of the Emerald Group taken as a whole; or

any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Emerald Group to an extent which is material in the context of the Emerald Group taken as a whole; and

the Offeror not having discovered other than to the extent as otherwise publicly announced by Emerald prior to this Announcement (by the delivery of an announcement to a Regulatory Information Service) or as otherwise fairly disclosed prior to the date of this Announcement in writing to the Offeror by or on behalf of Emerald in the course of negotiations:

that any past or present member of the Wider Emerald Group has not complied with any applicable legislation or regulations of any jurisdiction with regard to the use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or the health and safety of any person, or that there has otherwise been any such use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission (whether or not this constituted a nonߛcompliance by any person with any legislation or regulations and wherever the same may have taken place) which in any case would be likely to give rise to any liability (whether actual or contingent) or cost on the part of any member of the Wider Emerald Group which in any case is material in the context of the Emerald Group taken as a whole;

that there is, or is likely to be, any liability, whether actual or contingent, to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Wider Emerald Group or any other property or any controlled waters under any environmental legislation, regulation, notice, circular, order or other lawful requirement of any relevant authority or third party or otherwise which in any case is material in the context of the Emerald Group taken as a whole; or

that circumstances exist whereby a person or class of persons would be likely to have a claim in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Wider Emerald Group which is or would be material in the context of the Emerald Group taken as a whole.

For the purpose of these conditions:

"Third Party" means any central bank, government, government department or governmental, quasiߛgovernmental, supranational, statutory, regulatory or investigative body, authority (including any national antiߛtrust or merger control authority), court, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction;

a Third Party shall be regarded as having "intervened" if it has decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and "intervene" shall be construed accordingly; and

"Authorisations" means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, provisions and approvals.

All of the conditions set out in paragraph 3 of this Appendix I must be fulfilled, be determined by the Offeror to be or remain satisfied or (if capable of waiver) be waived by the Scheme Record Time, failing which the Proposals will lapse. Subject to the requirements of the Panel, the Offeror reserves the right to waive all or any of the conditions in paragraphs 3(a) to 3(h) (inclusive) of this Appendix I, in whole or part. The Offeror shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of the conditions in paragraphs 3(a) to 3(h) (inclusive) of this Appendix I by a date earlier than the date specified in paragraph 1 of this Appendix I above for the fulfilment thereof, notwithstanding that the other conditions of the Proposals may at such earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any of such conditions may not be capable of fulfilment.

If the Panel requires the Offeror to make an offer for Emerald Shares under the provisions of Rule 9 of the Takeover Code, the Offeror may make such alterations to the conditions of the Acquisition, including to the conditions set out in paragraph 2 of this Appendix I, as are necessary to comply with the provisions of that Rule.

Certain further terms of the Acquisition

The Proposals will be conditional upon the Scheme becoming unconditional and becoming effective by no later than 31 January 2010, or such later date (if any) as the Offeror and Emerald may, with the consent of the Panel, agree and (if required) the Court may approve.

Emerald Shares will be acquired by the Offeror fully paid and free from all liens, equitable interests, charges, encumbrances and other third party rights of any nature whatsoever and together with all rights attaching to them, including the right to receive and retain all dividends and distributions (if any) declared, made or payable after the date of this Announcement.

The Acquisition will be on the terms and will be subject, amongst other things, to the conditions which are set out in paragraphs 1, 2 and 3 of this Appendix I and those terms which will be set out in the formal Scheme Circular and accompanying Forms of Proxy and such further terms as may be required to comply with the Listing Rules of the UK Listing Authority, the provisions of the Takeover Code and the provisions of the Isle of Man Companies Acts 1931 to 2004. The Scheme will be governed by the laws of the Isle of Man.

The availability of the Proposals to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom or the Isle of Man should inform themselves about and observe any applicable requirements.

Appendix II

Bases of Calculation and Sources of Information

In this Announcement:

The value placed by the Proposals on the existing issued and to be issued share capital of Emerald, and other statements made by reference to the existing issued and to be issued share capital of Emerald, are based on a fully-diluted Emerald share capital of 70,940,896 Emerald Shares, calculated as follows:

62,661,613 Emerald Shares outstanding, being the number of Emerald Shares in issue on 11 August 2009 (the last Business Day prior to this Announcement);

2,725,246 Emerald Shares to be issued upon conversion of the Convertible Bonds, based on a hypothetical conversion date of Friday, 30 October 2009 in accordance with the change of control provisions applicable to the Convertible Bonds;

84,037 Emerald Shares to be issued in 2009 as part of the Business Unit Senior Management Incentive Scheme; and

5,470,000 Emerald Shares to be issued pursuant to options under the Emerald Share Schemes outstanding as at 11 August 2009 (the last Business Day prior to this Announcement).

Unless otherwise stated, the financial information and other information on Emerald included in this Announcement has been extracted or derived, without material adjustment, from the audited consolidated financial statements or unaudited interim statements for Emerald for the relevant financial periods.

Unless otherwise stated, all historic share prices quoted for Emerald Shares have been sourced from the Daily Official List and represent Closing Prices for Emerald Shares on the relevant dates.

Information in relation to the average Closing Price per Emerald Share over the three-month period ended on 9 July 2009 is for the period from and including 14 April 2009 to and including 9 July 2009 (excluding UK public holidays).

Appendix III

Definitions

The following definitions apply throughout this Announcement unless the context otherwise requires:

Acquisition	means the direct or indirect acquisition of the entire issued and to be issued share capital of Emerald by the Offeror (other than any Emerald Shares already held by the Offeror), to be effected by way of: (i) the Scheme; or (ii) the Offer (as the case may be)
Announcement	means this announcement
bfpd	means barrels of fluid per day
Bonds Sale and Purchase Agreement	means the bonds sale and purchase agreement relating to the Convertible Bonds entered into between the Offeror and Credit Suisse on the date of this Announcement
bopd	means barrels of oil per day
Break Fee Agreement	means the break fee agreement entered into between Emerald and the Offeror on the date of this Announcement
Business Day	means a day, other than a Saturday, Sunday or public holiday in England, on which banks are open for business in the City of London
Closing Price	means the middle market closing price of one Emerald Share on the relevant day, as derived from the Daily Official list
Competing Proposal	means any proposal, offer, scheme of arrangement, merger or business combination (including a transaction involving a dual listed company structure), recapitalisation, joint venture, alliance, acquisition or similar transaction (whether or not subject to preconditions) which requires the acceptance and/or approval of Emerald Shareholders (under the Listing Rules, the Takeover Code or otherwise) and which is proposed, announced or entered into by a third party which is not an associate (as defined in the Takeover Code) of the Offeror or acting in concert (as defined in the Takeover Code) with the Offeror (including any revision thereof)
Convertible Bonds	means the US$15,000,000 5.875 per cent. Series A Senior Unsecured Convertible Bonds issued by Emerald due 2012
Court	means the High Court of Justice of the Isle of Man
Court Meeting	means the meeting convened by order of the Court (and any adjournment thereof) of holders of Scheme Shares in issue at the Voting Record Time to be convened by order of the Court pursuant to section 152 of the Isle of Man Act to consider and, if thought fit, to approve the Scheme (with or without amendment), notice of which will be set out in the Scheme Circular
Court Order	means the order of the Court sanctioning the Scheme (with or without modification) pursuant to section 152 of the Isle of Man Act
Credit Suisse	means Credit Suisse Securities (Europe) Limited
CREST	means the relevant system as defined in the Uncertificated Securities Regulations 2005 of the Isle of Man (SD No. 754/05) in respect of which Euroclear UK & Ireland Limited is the operator and in accordance with which securities may be held or transferred in uncertificated form
Daily Official List	means the daily official list of the London Stock Exchange
E&P	means exploration and production
EGM	means the extraordinary general meeting (and any adjournment thereof) of Emerald Shareholders to be convened in connection with the Scheme to consider and, if thought fit, to approve certain resolutions in relation to the Scheme and the Acquisition (with or without amendment) notice of which will be set out in the Scheme Circular
Emerald or the Company	means Emerald Energy Plc, a company incorporated in the Isle of Man with company number 015484C
Emerald Board of Directors	means the board of directors of Emerald
Emerald Directors	means each of Alastair Beardsall, Edward Grace, Angus MacAskill, Keith Henry and Merfyn Roberts
Emerald Group	means Emerald Energy Plc, Emerald Energy Sucursal Colombia, SNG Overseas Limited, Emerald Energy Peru A Limited, Emerald Energy Peru B Limited and Emerald Energy Peru SAC, Emerald Energy Syria Limited and any companies which are holding companies, Subsidiaries or Subsidiary Undertakings of such companies from time to time
Emerald Share Schemes	means each of the Emerald Business Unit Senior Management Incentive Scheme and the Emerald Discretionary Share Option Scheme
Emerald Shares	means ordinary shares of £0.10 each in the capital of Emerald
Emerald Shareholders	means the holders of Emerald Shares
Financial Services Authority	means the Financial Services Authority of the UK in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List otherwise than in accordance with Part VI of FSMA
FSMA	means The Financial Services and Market Act 2000, as amended
Forms of Proxy	means the forms of proxy for use at the Court Meeting and the EGM
Harland Capital	means Harland Capital Limited
Implementation Agreement	means the implementation agreement entered into between Emerald and the Offeror on the date of this Announcement relating to, amongst other things, the implementation of the Proposals and the Scheme
Isle of Man Act	means the Isle of Man Companies Act 1931, as amended
Listing Rules	means the listing rules of the Financial Services Authority in its capacity as the UK Listing Authority under the Financial Services and Markets Act 2000 as amended from time to time and contained in the Financial Services Authority's publication of the same name
London Stock Exchange	means London Stock Exchange plc
Meetings	means the Court Meeting and the EGM, and Meeting means either of them
mmbbl	means million barrels
Offer	means the acquisition of the entire issued and to be issued ordinary share capital of Emerald by means of a takeover offer made pursuant to the Takeover Code
Offeror	means Sinochem Resources UK Limited, a private company limited by shares incorporated in England and Wales with registered number 06960528, formed for the purposes of implementing the Proposals
Offer Price	means the price of 750 pence in cash per Emerald Share to be offered by the Offeror under the terms of the Proposals
Panel	means the Panel on Takeovers and Mergers
Panmure Gordon	means Panmure Gordon (UK) Limited
Proposals	means the Scheme and other matters relevant thereto to be considered by Emerald Shareholders at the Meetings
Regulatory Information Service	means any of the services set out in Appendix 3 of the Listing Rules
Resolutions	means the resolutions to be proposed at the Meetings to give effect to the Scheme
Scheme or Scheme of Arrangement	means the proposed scheme of arrangement under section 152 of the Isle of Man Act between Emerald and the Scheme Shareholders, with or subject to any modification, addition or condition approved or imposed by the Court and agreed to by the Offeror and Emerald, the full terms of which will be set out in the Scheme Circular and (as the case may be) any supplemental circular(s)
Scheme Circular	means the document to be issued to Emerald Shareholders and others (or otherwise published in accordance with the Takeover Code, the Isle of Man Act, the requirements of the Court, Emerald's articles of association, and any other applicable law and regulation) by Emerald containing, amongst other things, the Scheme, the conditions to the Proposals and other relevant terms and conditions, certain information about the Offeror and Emerald and the notices of the Meetings
Scheme Effective Date	means the date on which the Scheme becomes effective in accordance with the Isle of Man Act
Scheme Hearing	means the hearing before the Court to approve the Scheme
Scheme Record Time	means 11.59 p.m. (London time) on the date before the Scheme Hearing (or such other time and/or date as is agreed between the Offeror and Emerald)
Scheme Shareholders	means the holders of the Scheme Shares
Scheme Shares	means: the Emerald Shares in issue at the date of the Scheme Circular; (if any) Emerald Shares issued after the date of the Scheme Circular and before the Voting Record Time; and (if any) Emerald Shares issued at or after the Voting Record Time and before the Scheme Record Time, either on terms that the original or any subsequent holders of such shares shall be bound by the Scheme, or in respect of which the original or any subsequent holders of such shares are, or shall have agreed in writing to be, bound by the Scheme, in any case, other than any Emerald Shares held or beneficially owned by the Offeror
Sinochem Board of Directors	means the board of directors of the Offeror
Sinochem Corporation	means Sinochem Corporation, a company incorporated in China
Sinochem Group	means Sinochem Group, a company incorporated in China
Sinochem Resources Directors	means each of Mr Han Gensheng, Mr Geng Wenzhi and Ms Lin Yu
Sinochem Resources UK Limited or the Offeror	means Sinochem Resources UK Limited, a private company limited by shares incorporated in England and Wales with registered number 06960528, formed for the purposes of implementing the Proposals
Soyuzneftegas	means Soyuzneftegas Limited
Standard Chartered	means Standard Chartered Bank
Sterling or £	means Sterling Pound, the lawful currency of the UK
Subsidiary	has the meaning given by section 1159 of the UK Companies Act 2006
Subsidiary Undertaking	has the meaning given by section 1162 of the UK Companies Act 2006
Substantial Interest	means a direct or indirect interest in 20 per cent. or more of the voting equity capital of an undertaking
Superior Proposal	means a bona fide Competing Proposal which the Emerald Directors consider, acting reasonably, in good faith and in accordance with their fiduciary duties and after consultation with their legal adviser(s) and Harland Capital is ready to be announced pursuant to Rule 2.5 of the Takeover Code and is capable of completing in accordance with its terms taking into account all financial, regulatory and other aspects of such proposal (including the ability of the proposing party to consummate the transactions contemplated by such proposal) and which at the time of its announcement would be superior to the Acquisition for Emerald Shareholders, and which the Emerald Directors, in accordance with their fiduciary duties, are therefore minded to recommend
Takeover Code	means The City Code on Takeovers and Mergers
United Kingdom or UK	means the United Kingdom of Great Britain and Northern Ireland
US Exchange Act	means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder
Voting Record Time	means the date and time specified in the Scheme Circular by reference to which entitlements to vote on the Scheme will be determined
Waterford	means Waterford Finance & Investment Limited
Wider Emerald Group	means Emerald and the Subsidiaries and Subsidiary Undertakings of Emerald and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Emerald Group is interested or any undertaking in which Emerald and such undertakings (aggregating their interests) have a Substantial Interest)
Wider Offeror Group	means Sinochem Group and the Subsidiaries and Subsidiary Undertakings of Sinochem Group and associated undertakings (including any joint venture, partnership, firm or company in which any such undertaking is interested or any undertaking in which the Offeror and such undertakings (aggregating their interests) have a Substantial Interest)

This information is provided by RNS

The company news service from the London Stock Exchange

END

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