30th Nov 2007 14:58
Faroe Petroleum PLC30 November 2007 30 November 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY ORINDIRECTLY, IN OR INTO THE UNITED STATES, JAPAN, CANADA, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA Faroe Petroleum plc ("Faroe Petroleum", "Faroe" or the "Company") Placing of 30,612,245 new Ordinary Shares at 147 pence to raise £45 million Faroe Petroleum, the independent oil and gas company focusing principally onexploration in the Atlantic Margin, the North Sea and Norway, has conditionallyraised £45 million (approximately £43 million net of expenses) through a Placingwith institutional and other investors of 30,612,245 new Ordinary Shares in theCompany at 147 pence per Ordinary Share. The Placing is subject to Shareholderapproval at an extraordinary general meeting to be held on 27 December 2007. Highlights: Following the Placing the Company will be fully funded to: • Carry out the prepared drilling campaign across its portfolio with the potential drilling of 26 wells by the end of 2009; • Accelerate the maturing and development of its existing licences; • Farm into attractive exploration and appraisal prospects within Faroe's core areas of activity; • Accelerate growth in Norway; • Conclude acquisitions of certain development and production assets (development programmes will be substantially debt financed); and • Continue to drive the licence application programme. Panmure Gordon, Nominated Adviser and Joint Broker to the Company, and TristoneCapital, as Joint Broker to the Company, have together conditionally placed30,612,245 new Ordinary Shares with existing Shareholders and other financialinstitutions. The Placing Price represents a discount of approximately 4.8 percent. to the closing middle market price of 154 pence per share on 29 November2007, the last business day prior to this announcement. The Directors are alsosubscribing a total of 96,634 Placing Shares at the Placing Price. Graham Stewart, Chief Executive of Faroe Petroleum said: "Faroe has been transformed over the last few years; the team has built a strongportfolio of production, appraisal and exploration assets with a verysubstantial prize in excess of two billion barrels of oil equivalent netun-risked resource. Alongside this we have established high-level partnershipswith major oil companies and now enjoy the position as the third largest grossacreage holder in the Atlantic Margin. This Placing gives us the firepower through efficient use of capital to executethe many opportunities open to us, including a 26 well programme, with 15expected by the end of 2008. Faroe now has the momentum to realise substantialvalue for Shareholders and we look forward to updating the market on ourprogress in the future." For further information please contact: Graham Stewart, Chief Executive +44 (0)1224 652 810 Faroe Petroleum plc Tim Linacre / Katherine Roe +44 (0)20 7459 3600 Panmure Gordon Nick Morgan / Derek Smith +44 (0)20 7355 5800 Tristone Capital Billy Clegg / Edward Westropp +44 (0)20 7831 3113 Financial Dynamics Development of the business to date The Directors announced, on 10 September 2007, the interim results for the sixmonths ended 30 June 2007, which stated that the Company's portfolio of licencestotalled 34: 5 in the Faroes, 20 in the UK, 2 in the Netherlands and seven inNorway. Since then the Company has announced: • the acquisition of an 18.75 per cent. interest in the UK Wissey field gas development; • a farm out of a 12.5 per cent. interest in its Faroes Licence 005 and the granting of an option over 2.5 per cent. of its West of Shetland Cardhu licence; • the successful drilling and testing of an appraisal well on the Breagh gas discovery in the UK Southern North Sea (10 per cent); • the acquisition of interests in the UK Schooner gas field (4.83 per cent.) and Topaz gas field development (7.5 per cent.); • the swap of interests in the Company's Norwegian Fogelberg exploration licence (15 per cent.) for an interest in PL376 (10 per cent.); and • a farm in to Faroes Licence 007, where the William well is currently being drilled, and acquisition of interests in the Norwegian Granat exploration licence (10 per cent.) and Trym field development asset (10 per cent.). Further details of the licences held by the Company and licences to be acquiredby it (subject to certain conditions) are set out in paragraph 5 of Part II tothe Circular posted to Shareholders today. The Company is in the process of relinquishing three UK exploration licenceswhich it has decided, in the normal course of portfolio management and followingthorough technical assessment, not to take forward, namely Licence P1160covering Blocks 205/19a, 20a, P1353 covering Blocks 18/3, 4 and P1294 coveringBlock 14/23a. The Company has satisfied all work commitments in connection withthese licences. The Company has also applied to BERR for a deferment of thedrill or drop commitment for Licence P1161 covering Blocks 206/5a, 10a, which isotherwise required by 1 December 2007, and in the Faroes the Company isnegotiating the extension of its option over a 4.04 per cent. interest inLicence 006, which is otherwise due to expire on 30 November 2007. The Company has built a strategic position in the Atlantic Margin (UK andFaroes) to become the third largest gross acreage holder in the area. Thisincludes acreage held as a sole licence holder and acreage held through a numberof joint ventures with major oil companies (e.g. BP, Chevron, Eni, Shell andStatoil). In addition to the Company's exposure in the UK and Faroes, theCompany has now established itself firmly in Norway, being the most successfulnew entrant in the APA 2006 licensing round, with seven new licences awarded,and has the greatest number of licences in Norway of any oil and gas companytrading on AIM. The Directors believe that the Norwegian oil and gas market issignificantly under-developed in comparison with the UK North Sea and holdsgreat potential for the Company to create significant additional shareholdervalue. Current business strategy The Company's business strategy to create value for Shareholders can besummarised as follows: •to discover substantial hydrocarbon resources West of Shetlands, Faroes and Norway by drilling attractive high impact exploration wells with material equity stakes; •to acquire and de-risk promising exploration and appraisal acreage in the wider North Sea and Norway in order to grow the underlying value of the Company; and •to acquire and exploit development and production assets on sensible metrics to strengthen underlying portfolio value. The risk/reward profile of the Company's portfolio can be generalised asfollows: •Atlantic Margin: higher risk with a significant number of high impact opportunities; •North Sea: provides opportunities for lower risk exploration and the exploitation of appraisal assets; and •Southern Gas Basin: opportunities for low risk development and production assets with near term cash flow potential. The Directors continue to believe that the opportunity for a significant stepchange in value will only be created through the successful drilling of targetedassets. The Company has prepared a significant drilling campaign across itsportfolio with the potential of drilling 26 wells by the end of 2009. Each ofthese wells has a differing risk and reward profile and the Directors are of theopinion that the drilling campaign, when considered in its entirety, has a goodchance of delivering successful results, with an accompanying significantincrease in the value of the business. While continuing to pursue the drilling of the exploration portfolio, theCompany has been building a portfolio of non-operated gas interests in producing/near producing fields, close to infrastructure in the UK Southern North Sea.The 2006 acquisition of Orca Minke has now been augmented with the acquisitionof an interest in the Wissey development (18.75 per cent.) and, as announcedearlier today, the acquisition of interests in the Schooner gas field (4.83 percent.) and the Topaz (7.5 per cent.) gas field development. As such, productionrisk is being diversified across several fields. Production achieves a number ofobjectives for the Company, notably cash flow to finance running costs and, intime, work programme costs, the utilisation of accumulated tax losses fromexploration activity, which effectively increases the profitability ofproduction, and the ability to utilise debt finance. The Company's targeted gasacquisitions all benefit from any upside in the gas price and are managed byexperienced operators (Gaz de France, RWE and Tullow). Reasons for the Placing As the growth of the Company accelerates, especially with the expansion intoNorway, the Directors and management team are reviewing a greater number of goodquality investment opportunities which the Board believes will continue toincrease shareholder value. This has been demonstrated through the recentacquisitions and farm in transactions conducted in the second half of 2007. TheCompany is seeking an increase in its capital resources to fund this growth andspecifically for the following activities: •increasing the level of exploration and appraisal drilling activity, while maintaining material equity interests by: + •accelerating the maturing of its existing licences; + •farming into attractive exploration and appraisal prospects in Norway and the UK; •accelerating growth in Norway; •funding development and production acquisitions (development programmes will be substantially debt financed); •farming out from a position of financial strength to secure favourable commercial terms; and •continuing the licence application programme. The Directors believe that the costs of the above activities require the Companyto be appropriately funded. The Company's current strategy will be part fundedthrough a combination of its current cash reserves, bank debt, productionrevenues and the raising of further equity capital from farm out arrangements.The Directors are proposing to fund the remaining cash requirement of thestrategy through the proceeds of the Placing. The Directors are also subscribingin the Placing as set out in paragraph 3 of Part II of the Circular. Details of the Placing Subject to the passing of the Resolutions at the Extraordinary General Meeting,the Company is proposing to raise £45 million before expenses (approximately £43million net of expenses) by the issue of the Placing Shares pursuant to thePlacing. The Placing Shares will represent approximately 30 per cent. of theenlarged issued share capital of the Company. Panmure Gordon and TristoneCapital have conditionally placed the Placing Shares with institutionalinvestors at the Placing Price. The Directors are also subscribing a total of96,634 Placing Shares at the Placing Price. The Placing Shares will, when issued, rank pari passu in all respects with theexisting Ordinary Shares. Admission is expected to take place and dealings in the Placing Shares tocommence on AIM on 28 December 2007. Share certificates in respect of PlacingShares to be held in certificated form are expected to be despatched by no laterthan 7 January 2008. Placing Shares to be held in uncertificated form areexpected to be delivered in CREST by no later than 7 January 2008. The Placing has only been made to persons falling within Article 19 or Article49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order2005 (as amended) and who are also "qualified investors" for the purposes ofsection 86(7) of FSMA and no other person may now participate in the Placing orrely on any communication relating to it. The offer of the Placing Shares hasnot been made to the public for the purposes of the Prospectus Rules. TheCircular and this announcement do not constitute an offer, or the solicitationof an offer, to subscribe or buy any of the Placing Shares. Current trading and prospects The Directors announced on 10 September 2007 the interim results of the Companyfor the six months ended 30 June 2007, since when the Company has entered intocontracts to acquire a number of production, development and exploration assetsas set out on page 5 of the Circular. The Company has also mandated a leadingoil and gas lending bank to provide a credit facility to finance in part thedevelopment assets. Extraordinary General Meeting A notice convening the Extraordinary General Meeting to be held on 27 December2007 at 2.30 p.m. at the offices of Financial Dynamics, 26 SouthamptonBuildings, London WC2A 1PB, is set out at the end of the Circular. At thismeeting special resolutions will be proposed, inter alia, to: (a) increase the authorised share capital of the Company from £12,000,000 to£18,000,000 by the creation of an additional 60,000,000 Ordinary Shares; (b) authorise the Directors, pursuant to Section 80 of the Act, to allot up to: (i) 30,612,245 new Ordinary Shares in respect of the Placing; and (ii) 42,535,134 new Ordinary Shares following the implementation of the Placing(representing approximately 41 per cent. of the issued share capital of theCompany following the implementation of the Placing); and (c) disapply statutory pre-emption rights, inter alia, in relation to: (i) the Placing; and (ii) the allotment of equity securities for cash up to an aggregate nominalamount of £522,475.80 (representing approximately five per cent. of the issuedshare capital of the Company following the implementation of the Placing). The proposed increase in the authorised share capital of the Company to180,000,000 Ordinary Shares contained in (a) above is necessary to allow for theissue of the Placing Shares and to leave further headroom for any subsequentissues. The allotment authority contained in (b) above is required for the issueof the Placing Shares and any further issues prior to the annual general meetingto be held in 2008. The allotment authority contained in (b), as reduced toapproximately 40 per cent. following the implementation of the Placing,represents the following: • 7,703,414 Ordinary Shares in connection with various employee share options and other option arrangements; and • 34,831,720 Ordinary Shares equivalent to approximately one third of the issued share capital of the Company following the Placing. The allotment authorities contained in (b) and (c) above will expire at theCompany's forthcoming 2008 annual general meeting and such authorities as willbe required on an ongoing basis will be proposed at such time. The Board believes that the Placing is in the best interests of the Company andShareholders as a whole. The Directors therefore unanimously recommend thatShareholders vote in favour of the Resolutions to be proposed at theExtraordinary General Meeting, as they intend to do in respect of their ownbeneficial holdings, which amount in aggregate to 330,861 Ordinary Shares(representing approximately 0.45 per cent. of the current issued share capitalof the Company). APPENDIX TERMS AND CONDITIONS OF AND IMPORTANT INFORMATION ON THE PLACING The Placing, and the terms and conditions herein, are directed exclusively atpersons (i) who are "qualified investors" (as defined in section 86(7) of theFSMA) and (ii) falling within Article 19 or Article 49 of the Financial Servicesand Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (suchcategory of investors being referred to as "Relevant Persons") and no otherpersons. Accordingly, this announcement is exempt from the general restrictionset out in Section 21 of the FSMA on the communication of invitations orinducements to engage in investment activity and has not been approved by aperson who is authorised under the FSMA. Members of the public are not entitled to take part in the Placing and thisannouncement is communicated to them for the purposes of information only. Thisannouncement and the terms and conditions herein must not be relied on, acted onor responded to by persons who are not Relevant Persons. If you are in any doubtas to whether you are a Relevant Person you should consult a professionaladviser for advice. This announcement and appendix does not constitute an offer to sell, or asolicitation to buy, Ordinary Shares in any jurisdiction in which such offer orsolicitation is unlawful. The distribution of this announcement (or copiesthereof) and the Placing and issue or transfer (as the case may be) of thePlacing Shares in certain jurisdictions may be restricted by law. RelevantPersons to whose attention this announcement has been drawn are required by theCompany and the Brokers to inform themselves about and to observe any suchrestrictions. Placees are deemed to have read and understood this announcement in its entiretyand to be making such offer on the terms and conditions contained in this appendix, and to be providing the representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in this appendix. The following definitions have been used in this announcement: "Act" the Companies Act 1985 (as amended) and, to the extent in force, theCompanies Act 2006 "Admission" the admission of the Placing Shares to trading on AIM becomingeffective in accordance with the AIM Rules "AIM" the AIM Market of the London Stock Exchange "AIM Rules" the AIM rules for Companies and the AIM Rules for Nominated Adviserspublished by the London Stock Exchange "BERR" the Department for Business Enterprise and Regulatory Reform "Board" or "Directors" the directors of the Company whose names are set out onpage 5 of the Circular "Brokers" Panmure Gordon and Tristone Capital, jointly and/or severally and"Relevant Broker" means either of them as the context so requires (by referenceto the relevant subscriber procured) "Company", "Faroe" Faroe Petroleum plc or "Faroe Petroleum" "Circular" the Circular dated 30 November 2007 describing the Placing and givingnotice of the Extraordinary General Meeting "CREST" the relevant system (as defined in the Uncertificated SecuritiesRegulations 2001) in respect of which Euroclear UK & Ireland is the operator "DTR" the Disclosure and Transparency Rules made by the Financial ServicesAuthority with effect from 20 January 2007 pursuant to Commission Regulation2004/109/EC), as revised from time to time "Extraordinary the extraordinary general meeting of the Company convened for 27 General Meeting" December 2007, notice of which is set out at the end of theCircular "FSMA" Financial Services and Market Act 2000 "Group" the Company and its subsidiaries "London Stock Exchange" London Stock Exchange plc "Ordinary Shares" ordinary shares of 10p each in the capital of the Company "Panmure Gordon" Panmure Gordon (UK) Limited "Placees" persons who subscribe for Placing Shares under the Placing "Placing" the placing of the Placing Shares "Placing Agreement" the conditional agreement dated 30 November 2007 between theCompany, Panmure Gordon and Tristone Capital relating to the Placing, summarydetails of which are set out on page 11 of the Circular "Placing Price" 147 pence per Placing Share "Placing Shares" the 30,612,245 new Ordinary Shares to be issued pursuant to thePlacing "Prospectus Rules" the Prospectus Rules made by the Financial Services Authoritywith effect from 1 July 2005 pursuant to Commission Regulation (EC) No. 809/2004, as revised from time to time "Resolutions" the resolutions set out in the notice of Extraordinary GeneralMeeting, which is set out at the end of the Circular "Shareholder(s)" holder(s) of Ordinary Shares "Tristone Capital" Tristone Capital Limited "UK" the United Kingdom of Great Britain and Northern Ireland The Placing Pursuant to the Placing Agreement, the Brokers, on behalf of the Company, haveconditionally placed 30,612,245 new Ordinary Shares at the Placing Price. ThePlacing will raise £45 million (approximately £43 million net of expenses). Application will be made (conditional on the approval of Shareholders at theGeneral Meeting) to the London Stock Exchange for the Admission of the PlacingShares to trading on AIM. It is expected that Admission will occur and thatdealings will commence on 28 December 2007 at which time it is also expectedthat the Placing Shares will be enabled for settlement in CREST. The Placing Shares will be issued credited as fully paid, will be issued subjectto the memorandum and articles of association of the Company and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive any future dividends and other distributions. Terms of the Placing Agreement Pursuant to the Placing Agreement, the Brokers have agreed to use theirreasonable endeavours to place the Placing Shares with Placees selected by them. The Placing is conditional upon, inter alia, the passing of the Resolutions atthe Extraordinary General Meeting, Admission and the Placing Agreement havingbecome unconditional and not having been terminated in accordance with its termsprior to Admission. If the conditions of the Placing Agreement are not fulfilledor waived on or before 8.00 am on 28 December 2007 (or such later time and dateas the Company and Panmure Gordon may agree, being no later than 8.00 am on 11January 2008) the Placing will not become unconditional and the rights andobligations of the Placees hereunder shall cease and determine at such time andno claim can be made by any Placee in respect thereof. In such circumstances,the Placing monies will be returned to the Placees, without interest, as soon aspracticable thereafter, at the Placees' risk. Neither Panmure Gordon, Tristone Capital nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision either of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing Agreement, nor for any decision any of them may make as to the satisfaction of any condition nor in respect of any decision thatany of them make in respect of the any right of termination or other discretion under the Placing Agreement. In consideration of their services in connection with the Placing, the Companywill pay to the Brokers a sales commission of up to five per cent. of theaggregate value of the Placing Shares. The Placing Agreement contains warrantiesgiven by the Company with respect to the Group, its business and certain mattersconnected with the Placing and an indemnity from the Company in favour of eachof the Brokers and their affiliates. Panmure Gordon (having consulted properly with Tristone Capital) is entitled toterminate the Placing Agreement in certain circumstances prior to Admission,principally in the event that any of the warranties contained therein are, orbecome, untrue, inaccurate or misleading in any material respect or if an eventof force majeure arises. Overseas shareholders The Placing Shares have not been and will not be registered under the United States Securities Act of 1933 (as amended) (the "Securities Act") or under the securities law of any state of the United States nor have they been qualified for sale under the securities legislation of any province or territory of Canadaand the relevant exemptions are not being obtained from the Securities Commission of any province of Canada and accordingly, the Placing Shares may not, subject to certain exemptions, be offered, sold, taken up, delivered or transferred (directly or indirectly) and will, absent an applicable exemption, not qualify for sale within the United States or Canada or to, or for the account or benefit of, any person or corporation in (or with a registered address in) the United States or Canada. The Placing Shares will not be lodged or registered with the Australian Securities and Investments Commission under Australia's Corporations Law and arenot being offered for subscription or sale and may not be directly or indirectly offered, sold or delivered in or into Australia or for the account or benefit of any person or corporation in (or with a registered address in) Australia. The relevant clearances have not been, and will not be, obtained from the Ministry of Finance of Japan and no document in relation to the Placing has been or will be lodged with or registered by the Ministry of Finance of Japan. The Placing Shares may not therefore be offered or sold, directly or indirectly, in or into Japan, its territories and possessions and any areas subject to its jurisdiction. No document in relation to the Placing Shares has been or will be lodged forregistration with the Registrar of Companies in the Republic of Ireland and theplacing Shares will not be offered, sold or delivered, directly or indirectly in the Republic of Ireland. All subscribers for Placing Shares must provide addresses outside the Republic of Ireland for the receipt of certificates for 0Placing Shares. The approval of the South African exchange control authorities has not been, andwill not be, obtained in relation to the Placing Shares. The Placing Shares maynot therefore be offered or sold directly or indirectly in or into South Africa. This announcement and any contract note made available to Placees do notconstitute an offer to sell, or a solicitation to buy, Placing Shares in anyjurisdiction in which such offer or solicitation is unlawful. The distributionof this announcement (or copies thereof) and the Placing and issue or transfer(as the case may be) of the Placing Shares in certain jurisdictions may berestricted by law. Persons to whose attention this announcement has been drawnare required by the Company and the Brokers to inform themselves about and toobserve any such restrictions. General These terms and conditions apply to persons making an offer to subscribe for Placing Shares under the Placing. Each Relevant Person to whom these conditionsapply, as described above, who confirms his agreement to the Relevant Broker (on behalf of itself and the Company) to subscribe for Placing Shares (which mayinclude the Relevant Broker and/or its nominee(s)) hereby agrees with both theRelevant Broker and the Company to be bound by these terms and conditions as being the terms and conditions on which the Placing Shares will be issued under the Placing. A Placee shall, without limitation, become so bound if the Relevant Broker confirms to it by telephone (i) the Placing Price and (ii) its allocation (the "Confirmation") and the Relevant Broker so notifies the Company's registrar on behalf of the Company. Conditional on (i) the passing of the Resolutions at the Extraordinary General Meeting, (ii) Admission occurring on 28 December 2007 or such later date as theCompany and Panmure Gordon may agree (not being later than 11 January 2008), (iii) the Confirmation, each Placee agrees to subscribe for the number of Placing Shares allocated to it, at the Placing Price. To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affectany other rights a Placee may have. A conditional contract note will be dispatched as soon as possible following the Confirmation. Each Placee undertakes to pay the Placing Price for the Placing Shares issued to such Placee in such manner as shall be directed by the Relevant Broker. Liability for stamp duty and stamp duty reserve tax is described below. In the event of failure by any Placee to pay as so directed, the relevant Placee shall be deemed hereby to have appointed the Relevant Broker or any nominee of the Relevant Broker to sell (in one or more transactions) any or all of the Placing Shares in respect of which payment shall not have been made as directed by the Relevant Broker. In the case of a joint agreement to subscribe for Placing Shares, references to a Placee in these terms and conditions are to each Placee who is a party to such agreement and each such Placee's liability is joint and several. To ensure compliance with the Money Laundering Regulations 2003 (as amended from time to time) and the Proceeds of Crime Act 2002, the Relevant Broker and/or Capita Registrars may require verification of a Placee's identity and address, if they do not already hold the same. Each Placee acknowledges that it is a term of its participation in the Placing that, pending the provision of evidence of identity and address, definitive share certificates or, where appropriate, delivery of Placing Shares to it in uncertificated form, may be retained or delayed at the Relevant Broker's absolute discretion. The Relevant Broker may terminate its Placing commitment if satisfactory evidence of identity and address is not received within a reasonable period of time after request. In which case the monies, if paid, will be returned without interest to the account of the drawee bank from which they were originally debited. The Relevant Broker will deal with all data which a Placee submits to it in connection with its application for shares in accordance with the provisions of the Data Protection Act 1998. Each Placee agrees that the Relevant Broker may share such data with all parties concerned with the Placing as may be necessary in connection with this application. By accepting its participation in the Placing, each Placee is deemed to agree that any "Specified Person" (being the Relevant Broker and any subsidiary or holding company of, or any subsidiary of a holding company of, the Relevant Broker and the employees, directors and agents of such persons and of the Relevant Broker, as the case may be, and "subsidiary" and "holding company" having the meanings ascribed thereto by sections 736 and 736A of the Act) shallnot be liable to each Placee for any matter arising out of its role in the caseof the Relevant Broker as Placing agent or otherwise in connection with the Placing (to the extent permitted by the Rules of the Financial Services Authority ("FSA") and that where any such liability nevertheless arises as a matter of law the relevant Placee will immediately to the maximum extent permissible waive any claim against any Specified Person which it may have in respect thereof. These terms and conditions and all documents and agreements into which theseterms and conditions are incorporated by reference or otherwise validly form apart will be governed by and construed in accordance with English law. For the exclusive benefit of the Brokers and the Company each Placee irrevocably submitsto the exclusive jurisdiction of the English courts in respect of thesematters. This does not prevent an action being taken against the Placee inanother jurisdiction. Settlement Settlement will take place on 28 December 2007 as set out in the contract note.On that date each Placee must settle the full amount owed by it in respect ofthe Placing Shares allocated to it. The Relevant Broker may (after consultationwith the Company and the other Broker) specify a later settlement date at itsabsolute discretion. Payment must be made in cleared funds. The paymentinstructions for settlement in CREST and settlement outside of CREST will be set out in the contract note. The trade date of the Placing Shares will be 30November 2007 as set out in the contract note. Interest is chargeable daily onpayments to the extent that value is received after the due date at the rate perannum of 2 percentage points above the Barclays Bank plc base rate. If a Placeedoes not comply with these obligations, the Relevant Broker may sell thePlacing Shares allocated to such Placee (as agent for such Placee) and retainfrom the proceeds, for its own account, an amount equal to the Placing Priceplus any interest due. The relevant Placee will, however, remain liable, interalia, for any shortfall below the Placing Price and it may be required to bearany stamp duty or stamp duty reserve tax (together with any interest orpenalties) which may arise upon the sale of its Placing Shares on its behalf.Time shall be of the essence as regards the obligations of Placees to settlepayment for the Placing Shares and to comply with their other obligations underthis announcement.Settlement of the transactions in the Placing Shares following Admission will,where permissible, take place within the CREST system against Panmure Gordon'sCREST account 83801 or Tristone Capital's CREST account 601 (as applicable). Theusual rules of secondary settlement and trading will apply. The Brokers reservethe right to require settlement for and delivery of the Placing Shares to thePlacees by such other means that it deems necessary if delivery or settlement isnot possible within CREST within the timetable set out in this announcement orthe Circular or would not be consistent with the regulatory requirements in thejurisdictions of such Placees. The Relevant Broker will endeavour to meet the demands of those Placees indicating that they wish to hold their Placing Shares in certificated form. Representations, Warranties and Undertakings By participating in the Placing, each Placee irrevocably represents, warrants and undertakes to the Relevant Broker (for itself and as agent of the Company) that: (a) it and/or each person on whose behalf it is participating (in whole or in part) in the Placing or to whom it allocates its Placing Shares in whole or in part: (i) has the capacity and authority and is entitled to enter into and perform its obligations as a subscriber of Placing Shares and will honour such obligations; and (ii) has fully observed all laws of relevant jurisdictions and obtained all necessary governmental or other consents and authorities in either case which may be required in relation to the subscription by it of Placing Shares; (b) the Placing Shares have not been and will not be registered under the Securities Act or under the relevant securities laws of any state of the United States, any of Canada, Australia, New Zealand, Japan, the Republic of Ireland or South Africa or any state or territory within any such country and, subject to certain limited exceptions, may not be directly or indirectly offered, sold, renounced, transferred, taken-up or delivered in, into or within those jurisdictions; (c) (i) it is not resident within the United States, Canada, Australia, New Zealand, Japan, the Republic of Ireland or South Africa or in any other jurisdiction where participation by residents or other persons in the Placing may be a breach of the relevant law of such jurisdiction (a "Restricted Jurisdiction") and it is not a citizen of a Restricted Jurisdiction, (ii) it has not offered, sold or delivered and will not offer, sell or deliver any of the Placing Shares directly or indirectly, into a Restricted Jurisdiction or any other jurisdiction where the distribution of this announcement may be restricted by law, (iii) neither it, its affiliates, nor any persons acting on its behalf, have engaged or will engage in any directed selling efforts with respect to the Placing Shares, (iv) except pursuant to any exemption under relevant local law, it is not taking up the Placing Shares for resale in or into a Restricted Jurisdiction or any other jurisdiction where the distribution of the announcement may be restricted by law, and (v) it will not distribute this announcement or any offering material, directly or indirectly, in or into a Restricted Jurisdiction or any other jurisdiction where the distribution of the announcement may be restricted by law or to any persons resident in such countries; (d) it is outside the United States and will only offer and sell the Placing Shares outside the United States in offshore transactions in accordance with Regulation S of the Securities Act; (e) neither it nor its affiliates (as defined in Rule 501(b) of the Securities Act) nor any person acting on its or their behalf have engaged in or will engage in any 'general solicitation or general advertising' (within the meaning of Regulation D under the Securities Act) or 'directed selling efforts' (as defined in Regulation S under the Securities Act) in connection with any offer or sale of the Placing Shares; (f) its obligations under the Placing are irrevocable and are not capable of termination or recission by it in any circumstances; (g) it is a Relevant Person; (h) in agreeing to subscribe for Placing Shares it has received and read this announcement including this appendix and is not relying on any information, representation or warranty relating to the Placing, Placing Shares or the Company other than as contained in this announcement and it has not relied on and is not relying on any representation or warranty or agreement by the Relevant Broker or the Company or any of their respective directors, employees or agents or any other person except as set out in the express terms herein and otherwise has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing; (i) save where the Relevant Broker has been given priorwritten notice to the contrary, in participating in the Placing it is acting asprincipal and for no other person and that its acceptance of that participationwill not give any other person a contractual right to require the issue by theCompany of any of the Placing Shares; (j) it has not offered or sold and will not offer or sell anyPlacing Shares in the United Kingdom prior to Admission except in circumstanceswhich have not resulted and will not result in an obligation to publish an approved prospectus arising under section 85(1) of the FSMA or a breach of suchsection, under the Prospectus Rules or otherwise; (k) it has complied with all relevant laws of all territories;that it has not taken any action or omitted to take any action which will ormay result in the Brokers, or the Company or any of their directors, officers, agents, employees or advisors acting in breach of the legal and regulatoryrequirements of any territory in connection with the Placing or itsapplication; and that it will pay any issue or other taxes due under anyrelevant laws; (l) save where the Brokers have been given prior writtennotice to the contrary, it is not a person falling within subsections (6), (7)or (8) of sections 67 or 70 or subsections (2) and (3) of section 93 orsubsection (1) of section 96 of the Finance Act 1986 (or an agent or nominee ofsuch person); (m) save where the Brokers have been given prior written noticeto the contrary, the issue of Placing Shares to it (whether as principal, agentor nominee) will not be subject to stamp duty or stamp duty reserve tax at theincreased rates referred to in sections 67 or 93 (Depositary Receipts) orsections 70 or 96 (Clearance Services) of the Finance Act 1986; (n) in the case of a person who confirms to the Brokers onbehalf of a Placee an agreement to subscribe for Placing Shares and/or whoauthorises the Brokers to notify the Placee's name to the Company's registrar,that person represents and warrants that he has authority to do all such actson behalf of the Placee; (o) to the extent that a Placee is subscribing for PlacingShares on behalf of a third party and prior written notice of such matter hasbeen given to the Brokers as contemplated by paragraph (i) of this appendix; (i) such Placee has carried out applicable procedures toverify the identity of such third party for the purposes of the MoneyLaundering Regulations 2003 (the "Regulations"); (ii) such Placee has complied fully with its obligationspursuant to the Regulations; and (iii) such Placee will provide the Brokers on demand with anyinformation it might require for the purposes of verification under theRegulations; (s) it is aware of, has complied with and will comply with itsobligations in connection with money laundering under the Proceeds of Crime Act2002; (t) commissions will not be paid to Placees in connection withthe Placing; (u) it acknowledges that the issue of the Placing Shares to itwill be issued subject to the terms and conditions set out herein; (v) the exercise by the Brokers of any right of termination orany right of waiver or extension exercisable by the Brokers contained in thePlacing Agreement or the exercise of any discretion under this announcement iswithin the absolute discretion of the Brokers and, save where otherwiseexpressly provided in law, the Brokers will not have any liability to anyPlacee whatsoever in connection with any decision to exercise or not exerciseany such rights; (w) times and dates in this announcement and the contract notemay be subject to amendment and the Relevant Broker shall notify the Placees ofany such amendments; (x) it will (or will procure that its nominee will), ifapplicable, make notification to the Company of the interest in its OrdinaryShares in accordance with Chapter 5 of the DTR; (y) the Company, the Brokers, their respective members,directors, employees, agents and advisers will rely upon the truth and accuracyor the confirmations, acknowledgements, representations and warranties containedin this announcement; (z) all notices, remittances and documents or title (asrelevant) are sent to each Placee by the Relevant Broker, at the Placee's ownrisk; (aa) it will be bound by the terms of the constitution of theCompany in force immediately following Admission; (bb) it has no rights against the Brokers and any of theirrespective past, present or future directors and employees under the PlacingAgreement pursuant to the Contracts (Rights of Third Parties) Act 1999; and (cc) the provisions of the announcement which are intended tobenefit Specified Persons who are not parties to it are intended to be for thebenefit of such Specified Persons and they shall be entitled to enforce their rights under such provisions under the Contracts (Rights of Third Parties) Act1999. In the event that a Placee is not able to give the warranties in (l) and (m)above, stamp duty or stamp duty reserve tax may be chargeable or may bechargeable at a higher rate: neither the Brokers nor the Company will beresponsible for any resulting liability to stamp duty or stamp duty reservetax, which shall be for the account of the Placee and in respect of which thePlacee agrees to indemnify, and keep indemnified, the Brokers and the Company. Each Placee irrevocably appoints any director of the Relevant Broker as itsagent for the purpose of executing and delivering to the Company and/or itsregistrars any documents on its behalf necessary to enable it to be registeredas the holder of any of the Placing Shares offered to it. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Faroe Petroleum Plc