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Sound Oil Acquires Consul Oil & Gas

Source: www.gulfoilandgas.com 12/15/2010, Location: Europe

Sound Oil, the upstream oil and gas company with assets in Indonesia, announces that it has conditionally acquired 96 per cent of the issued share capital of Consul Oil & Gas Limited (Consul), a private UK exploration and production company with licences in Italy.

The consideration of approximately £4.62 million will be satisfied by the payment of approximately US$2.19 million (£1.39 million) in cash and the issue of 269,127,983 New Ordinary Shares in the capital of Sound. In addition, the Company will also purchase from RAB Octane (Master) Fund Limited (RAB) an existing loan and associated interest from RAB to Consul of approximately €1.15 million.

Sound has also made an offer to acquire the remaining 4% of the issued share capital of Consul which, if accepted, will result in an additional cash payment of US$93,333 and the issue of a further 11,111,110 New Ordinary Shares in Sound.

The Company also announces a conditional placing of 311,251,000 New Ordinary Shares at 1.2p per share (Placing Shares) to raise approximately £3.7 million, before expenses.

In addition, the Company announces that it has entered into a £10 million Standby Equity Distribution Agreement (SEDA) with YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors LLC, further details of which are set out below.

The net proceeds of the Placing, together with the available funds under the SEDA, will be used to fund the combined work programme and ongoing costs of the Company and its subsidiaries.

Further, the Company has agreed to issue a total of 12,500,000 New Ordinary Shares to two directors of Consul as payment for services, in lieu of cash.

Application has been made for in total 592,878,983 New Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence in the New Ordinary Shares on 5 January 2011, subject to shareholder approval.

The Company intends to post a circular to all of its shareholders setting out full details of the Acquisition and Placing and convening a general meeting seeking shareholder approval for the issue of the New Ordinary Shares in connection with the Acquisition and the Placing. The general meeting has been convened for 11.00 am on 4 January 2011.

Each member of the Board has given irrevocable undertakings to vote in favour of the resolutions to be proposed at the general meeting in respect of their own beneficial holdings of 153,458,786 Ordinary Shares, representing, in aggregate, 22.17 per cent. of the existing Ordinary Shares. Additionally, RAB Energy Fund has given an irrevocable undertaking to vote in favour of the resolutions in respect of their own beneficial holding of 32,084,290 Ordinary Shares, representing 4.63 per cent. of the existing Ordinary Shares.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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