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Subscription to raise US$350,000

Source: www.gulfoilandgas.com 9/19/2019, Location: Europe

Cabot Energy Plc has entered into an agreement with High Power Petroleum LLC ("H2P") to raise US$350,000 gross (280,000), before expenses, by way of a subscription (the "Subscription"). The number of new ordinary shares of 1 penny each in the Company to be issued to H2P (the "Subscription Shares") and the price per Subscription Share, will be determined by the issue price under the Company's open offer to shareholders, which is to be launched in October 2019 ("Open Offer").

Open Offer and H2P Commitment
As announced on 2 September 2019, the Company intends to launch an Open Offer in October 2019, to all shareholders at the proposed open offer price of 3p per share. This is intended to provide the balance of working capital funding needed to complete the late Summer Work Programme (the "Summer Work Programme"). As previously announced, H2P has committed to invest a minimum of US$0.7 million pursuant to the Open Offer and the US$350,000 investment from H2P pursuant to the Subscription forms part of this commitment.

The issue of the Subscription Shares and the new ordinary shares to be subscribed under the Open Offer will be conditional on the passing of resolutions by shareholders to grant the directors authority to issue such shares. It is intended that a general meeting will be convened for mid-October by way of a notice of meeting contained in the Open Offer circular ("General Meeting"). Notwithstanding the conditionality of the Subscription, at the Company's request, H2P has agreed with the Company to prepay its subscription monies of US$350,000. In the event that the Subscription does not complete, the prepayment by H2P will be deemed to be a subordinated unsecured debt by the Company accruing interest of 8 per cent per annum.

Use of proceeds
The net proceeds of the Subscription will provide short term working capital for the Company's immediate needs including the Summer Work Programme, which will consist of nine workovers, a critical maintenance programme and stimulations in proven reserve wells in September and October. Related Party Transaction H2P is a substantial shareholder in the Company and therefore the Subscription constitutes a related party transaction in accordance with AIM Rule 13. The independent Non-Executive Directors for these purposes, having consulted with the Company's Nominated Adviser, consider the terms of the Subscription by H2P, as a related party, to be fair and reasonable insofar as all of Cabot's shareholders are concerned. Admission of the Subscription Shares and General Meeting Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM ("Admission"). These shares will rank pari passu with existing ordinary shares in all respects. As noted above, the issue of the Subscription Shares is conditional upon, inter alia, the passing of certain resolutions at a General Meeting. It is expected that, subject to the resolutions being passed, Admission will occur, and that dealings in the Subscription Shares will commence on or around 17 October 2019. The Company will update the market with further details regarding the General Meeting and Admission as appropriate. James Dewar, Interim Non-Executive Chairman, commented: "We would like to thank H2P for their continued support which follows the H2P US$0.3 million equity subscription to fund the commencement of the Summer Work Programme and the proposed asset-level loan facility of up to C$5.0 million with a private energy lender to debt-fund the Winter Work Programme, both of which were announced earlier this month. We look forward to providing our other shareholders with the opportunity to participate in an equity fundraising via an Open Offer and thank them for their continued support."

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