Gulf Oil and Gas accountACCOUNT

Equity Fundraising of Approximately £500,000

Source: www.gulfoilandgas.com 4/14/2020, Location: Europe

Egdon Resources plc has raised approximately £500,000 via a subscription for new shares, to be completed in two tranches. The Company has raised approximately £415,164 (the “Subscription“) through the issue of 20,758,220 new ordinary shares of 1 pence each in the Company (the “Subscription Shares“) at a price of 2p per Ordinary Share (“Issue Price“). The Subscription includes a £141,114 subscription by Petrichor Holdings Coöperatief U.A. (“Petrichor”).

In addition, because the Company is currently in a close period due to its intended publication of Interim Results for the six months ended 31 January 2020 on 21 April 2020, Mark Abbott (Managing Director), Walter Roberts (Non-Executive Director and Company Secretary) and Tim Davies (Non-Executive Director) of Egdon have undertaken to subscribe to raise £56,000 following publication of those Interim Results as set out further below (the “Directors’ Subscription”). In connection with the Director’s Subscription, Petrichor has undertaken to subscribe for such further number of shares, at the Issue Price, that would maintain their holding in the Company at 33.99%. If the Directors Subscription is undertaken at the Issue Price (2p per Ordinary Share) this will result in gross proceeds of £500,000 for the two tranches.

Highlights
- Subscription for 7,055,720 New Ordinary Shares as outlined below (the “Petrichor Subscription Shares“) by Petrichor at an issue price of 2 pence per Subscription Share to raise gross proceeds of £141,114 (the “Petrichor Subscription“).
- In connection with the Directors’ Subscription, Petrichor has undertaken to subscribe for such number of shares at the Issue Price that would maintain their holding in the Company at 33.99% (the “Petrichor Further Subscription”).
- The Issue Price represents a 14.89 per cent. discount to the closing price (of 2.35p) of the Ordinary Shares on Thursday 9 April 2020, the last trading day prior to this Announcement.
- An undertaking to subscribe to raise £56,000 by Mark Abbott (Managing Director), Walter Roberts (Non-Executive Director and Company Secretary) and Tim Davies (Non-Executive Director) (the “Directors’ Subscription”) at the higher of the Issue Price or the volume weighted adjusted price (“VWAP”) of the Ordinary Shares on the three days following publication of the Company’s Interim Results, subject to the same discount of 14.89 per cent (the “Directors’ Subscription Price”).
- The net proceeds of the fundraising receivable by the Company will be used primarily to:
- Progress key near term cash generative projects such as Wressle; and
- General working capital.

The Fundraising will complete in 2 tranches, the first of which will complete on or around 20 April 2020 and the second will complete on or around 27 April 2020, or the earliest such time that the Directors are not in possession of inside information.

Tranche 1
The £415,164 subscription monies payable for 20,758,220 of the Subscription Shares (“Tranche 1 Subscription Shares”) are payable on 20 April 2020. Application will be made to the London Stock Exchange for the Tranche 1 Subscription Shares to be admitted to trading on the AIM Market of the London Stock Exchange (“Admission”) and it is expected that Admission of the Tranche 1 Subscription Shares will become effective on or around 20 April 2020.

Tranche 2
The subscription monies payable for the Directors’ Subscription Shares and the Petrichor Further Subscription (“Tranche 2 Subscription Shares”) are expected to be payable on 27 April 2020. A further update will be made once the Director’s Subscription Price and the number of Directors’ Subscription Shares is known.

Application will be made for Admission of the Tranche 2 Subscription Shares and it is expected that Admission of the Tranche 2 Subscription Shares will become effective on or around 27 April 2020 or the earliest such time that the Directors are not in possession of inside information if later.

The Tranche 1 Subscription Shares and the Tranche 2 Subscription Shares will rank pari passu with the Company’s existing Ordinary Shares in all respects.

Mark Abbott, Managing Director of Egdon, commented:
“Egdon is pleased to have secured these funds in difficult market conditions to progress our key near term projects. We are grateful for the continued support from Petrichor, an existing shareholder with extensive knowledge and experience of exploration and production of unconventional hydrocarbons.”

Related Party Transactions
Mark Abbott is a Director of the Company and is interested in 9,392,617 ordinary shares (representing 3.10% of the current issued share capital).

Walter Roberts is a Non-Executive Director and Company Secretary of the Company and is interested in 974,129 ordinary shares (representing 0.32% of the current issued share capital).

Tim Davies is a Non-Executive Director of the Company and is not currently interested in any ordinary shares.

Petrichor is a substantial shareholder in the Company and is interested in 103,094,546 Ordinary Shares (representing 33.99% of the current issued share capital).

The participation in the Directors’ Subscription by Mark Abbott, Walter Roberts and Tim Davies and the Petrichor Subscription both constitute related party transactions under the AIM Rules for Companies.

The directors of the Company (with the exclusion of Mark Abbott, Walter Roberts and Tim Davies), having consulted with the Company’s nominated adviser, Cantor Fitzgerald Europe, consider the terms of the Fundraising to be fair and reasonable insofar as the Company’s shareholders are concerned.

Concert party
Petrichor is a wholly owned subsidiary of HEYCO Energy Group, Inc. (“HEYCO”). HEYCO’s majority shareholder is Explorers Petroleum Corporation of which George Yates is the ultimate controller.

The Petrichor Subscription Shares will be registered in the name of Jalapeno Corporation (“Jalapeno”). Jalapeno’s President is Harvey E Yates Jr, George Yates’ brother. As such, following the Subscription Petrichor and Jalapeno will constitute a concert party for the purposes of the Takeover Code (the “Concert Party”).

Following Admission of the Tranche 1 Subscription Shares, the Concert Party will hold in aggregate 110,150,266 Ordinary Shares (representing 33.99 per cent. of the enlarged share capital).

Following Admission of the Tranche 2 Subscription Shares, the Concert Party will hold such number of Ordinary Shares representing 33.99 per cent. of the enlarged share capital.

Total Voting Rights
The current issued share capital of the Company is 303,315,625 Ordinary Shares, each with voting rights. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the Disclosure and Transparency Rules.

Following Admission of the 20,758,220 Tranche 1 Subscription Shares on or around 20 April 2020, the Company’s enlarged issued share capital will comprise 324,073,845 Ordinary Shares, each with voting rights.

A further update will be made by the Company, on or around 27 April 2020 (or the earliest such time that the Directors are not in possession of inside information), regarding the Company’s enlarged share capital following admission of the Tranche 2 Subscription Shares.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (“MAR”). In addition, market soundings (as defined in MAR) were taken in respect of the Subscription with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

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