Rockhopper Exploration Announces Proposed Capital Raise

Source: www.gulfoilandgas.com 6/15/2022, Location: South America

- Proposed equity raise of approximately US$4.5 million (approximately 3.7 million) by way of a Placing and a proposed Subscription and
- Open Offer of up to approximately US$5 million (approximately 4.1 million)

The Company today announces its intention to raise approximately US$4.5 million (approximately 3.7 million), before expenses, by way of a Placing and a proposed Subscription, in each case at an issue price of 7 pence per Unit (the "Issue Price"). Each Unit being offered comprises one New Ordinary Share and, for every two New Ordinary Shares subscribed for, one Warrant. Each Warrant gives the holder the right to subscribe for one new Ordinary Share at a price of 9 pence per Ordinary Share (the "Strike Price") at any time from the issue of the Warrants up to (and including) 5.00 p.m. on 31 December 2023 (the "Warrant Exercise Period"). The Issue Price represents a discount of approximately 12.5 per cent. to the Closing Price of 8 pence per Existing Ordinary Share on 14 June 2022 (being the latest practicable date prior to the release of this announcement (together with the Appendix, the "Announcement")).

In addition, the Company is seeking to raise up to approximately US$5 million (4.1million) through an Open Offer (together with the Placing and Subscription, the "Capital Raising") pursuant to which Units will be offered to existing Shareholders at the Issue Price. If the Resolutions to (i) allot shares (or rights to subscribe for or to convert any security into shares) and, (ii) disapply pre-emption rights are not approved by Shareholders at the 2022 Annual General Meeting, the Open Offer will not complete.

The proceeds from the proposed Placing and Subscription are expected to provide the Company with sufficient working capital to the end of June 2023. Any additional proceeds from the Open Offer would provide working capital beyond this period depending on the amount raised.

Subject to demand from potential investors to participate in the Placing and the existing authorities granted at the 2021 Annual General Meeting, the Directors have reserved flexibility to increase the size of the Placing. The Placing is being conducted through an accelerated bookbuild process (the "Bookbuild"), which will be launched immediately following this Announcement and will be made available to new and existing eligible institutional investors. The Placing is subject to the terms and conditions set out in the Appendix to this Announcement. Canaccord Genuity Limited ("Canaccord") and Peel Hunt LLP ("Peel Hunt") are together acting as joint bookrunners (the "Joint Bookrunners") in relation to the Placing. The Bookbuild is expected to remain open until 9 p.m. on 15 June 2022, however this remains subject to change at the discretion of the Joint Bookrunners (in consultation with the Company).

The Directors, have indicated an intention to subscribe for Units, pursuant to the Subscription at the Issue Price, which would raise gross proceeds of approximately US$190,000 in aggregate.

The Company considers it important that existing Shareholders who are not able to take part in the Placing or the Subscription are given an opportunity to participate in the Capital Raising. The Company will therefore provide Qualifying Shareholders with the opportunity to subscribe for Units, comprising of Open Offer Shares and Warrants, at the Issue Price pursuant to an Open Offer, to raise gross proceeds of up to approximately US$5 million (approximately 4.1 million) if fully taken-up. The Open Offer will include an excess application facility to enable Qualifying Shareholders to apply for additional Units in excess of their entitlements under the Open Offer. Completion of the Open Offer will be conditional upon, among other things, the approval by the Company's Shareholders of resolutions to grant the Directors of the Company authority to (i) allot shares or rights to subscribe for or to convert any security into shares, and (ii) disapply pre-emption rights (the "Resolutions") at the annual general meeting of the Company expected to be held on 28 June 2022 (the "2022 Annual General Meeting").

If the Resolutions are not approved by Shareholders at the 2022 Annual General Meeting, the Open Offer will not complete. The Directors consider the terms of the Capital Raising (described in more detail below) to be in the best interests of Shareholders and of the Company as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions at the 2022 Annual General Meeting to be held on 28 June 2022.

Details on how to vote at the 2022 Annual General Meeting are set out in the Notice of Annual General Meeting published by the Company on 6 June 2022, which can be found on the Company's website (www.rockhopperexploration.co.uk).

Sam Moody, CEO of Rockhopper Exploration plc said:
"The strategy and focus of the Board is to maximise the likelihood of project sanction at Sea Lion. At current oil prices, the Board believes the potential value creation to Shareholders by sanctioning Sea Lion, a 500 million barrel oil field with significant upside, is highly material. In order to pursue this strategy, the Company requires sufficient funding to pay its reduced corporate costs, licence fees, costs associated with the completion of the Navitas Transaction and various other costs not covered under the Navitas loan agreement. The proposed equity raise helps us achieve that while we focus on the ultimate prize of Sea Lion project sanction."

Capital Raising - Further Information
For the avoidance of doubt, the Capital Raising is not being underwritten by the Joint Bookrunners or any other party, whether as to settlement risk or otherwise.
The Company intends to issue the Placing Units (including both the Placing Shares and the Placing Warrants) by way of a non-pre-emptive cashbox placing.
The timing for the close of the Bookbuild shall be at the discretion of the Joint Bookrunners, in consultation with the Company.
Allocation of the Placing Units shall be determined by the Company in consultation with the Joint Bookrunners.
At the Company's 2021 Annual General Meeting held on 29 June 2021, the Directors were granted authorities to allot shares or rights to subscribe for or to convert any security into shares under section 551 of the Act. This authority is sufficient to enable the Company to allot and issue the full amount of Placing Units pursuant to the Placing and the Subscription Units pursuant to the Subscription. The Company is scheduled to hold its 2022 Annual General Meeting on 28 June 2022, at which the Company is proposing Resolutions to grant the Directors authority to (i) allot shares or rights to subscribe for or to convert any security into shares under section 551 of the Act, and (ii) disapply pre-emption rights under section 570 of the Act. If passed, these Resolutions would be sufficient to enable the Company to allot and issue the full amount of Open Offer Units to be issued pursuant to the Open Offer. If the Resolutions are not approved by Shareholders at the 2022 Annual General Meeting, the Open Offer will not complete.

The Placing and the proposed Subscription are conditional upon:
o First Admission becoming effective by not later than 8.00 a.m. on 20 June 2022 or such later date as may be agreed by the Company and the Joint Bookrunners; and
o the Placing and Open Offer Agreement becoming unconditional with respect to First Admission and not having been terminated by the Joint Bookrunners in accordance with its terms.

The Open Offer is further conditional upon, among other things:
o the Resolutions being passed by Shareholders at the 2022 Annual General Meeting; and
o Second Admission becoming effective.
The Placing and the proposed Subscription are not conditional upon completion of the Open Offer. It is therefore possible that the Placing and the proposed Subscription proceed, but the Open Offer does not.
The Appendix to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.
The Company expects to publish a circular (the "Circular") in connection with the Open Offer following the closure of the Bookbuild. Full details, including terms and conditions, of the Open Offer will be included in the Circular. Please note that subscription for Units under the Placing will not carry any entitlement to subscribe for New Ordinary Shares or Warrants under the Open Offer.
Applications will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that First Admission will become effective and that dealings in respect of the Placing Shares and the Subscription Shares will commence at 8.00 a.m. on 20 June 2022.
The Warrants will not be admitted to trading on AIM or on any other stock exchange. The Warrants are capable of being settled in CREST. It is currently intended that settlement of Warrants via CREST will be on the same timetable as settlement of the Placing Shares and Subscription Shares or the Open Offer Shares, as applicable. Warrant certi?cates in respect of the Warrants issued pursuant to the Placing will be issued to certi?cated holders only and are currently expected to be dispatched within 14 days of First Admission.

Current Trading and Prospects
As noted in the Company's results for the twelve months ended 31 December 2021, as at 30 April 2022, the Group had (unaudited) cash resources of approximately US$3.4 million. There have been no material changes to the performance of the Group since the publication of these results.

Recent Events
In April 2022, the Company, Harbour Energy and Navitas announced that they had signed legally binding definitive documentation in relation to Harbour Energy exiting and Navitas entering the North Falkland Basin (the "Navitas Transaction").

The details of the Navitas Transaction (including the proposed Navitas Loans and the key conditions to the Navitas Transaction) are set out, along with the future plans for Sea Lion, in the RNS announcement dated 19 April 2022.

Background to and reasons for the Capital Raising
The strategy and focus of the Board is to maximise the likelihood of project sanction at Sea Lion. At current oil prices, the Board believes the potential value creation to Shareholders by sanctioning Sea Lion, a 500 million barrel oil field with significant upside, is highly material.

In order to pursue this strategy, the Company requires sufficient funding to pay its reduced corporate costs, licence fees, costs associated with the completion of Navitas Transaction and various other costs not covered under the Navitas loan agreement, including all costs relating to the South Falkland licences. The Navitas Loans only become available on completion of the Navitas Transaction, which requires (among other things) UK Secretary of State approval and could take a number of months.

As set out in the Company's 2021 Annual Report, the Company had cash resources of US$4.8 million as at 31 December 2021. As at 30 April 2022, the Company had (unaudited) cash resources of approximately US$3.4 million. The Company has not raised funds from Shareholders since 2011.

The Company estimates that additional funding of a minimum of US$4.5 million (approximately 3.7 million) would be sufficient to run the Company for the next 12 months, by which time the Company is hopeful that a decision will have been issued by the panel in relation to the Ombrina Mare Arbitration. Once that decision is known, the Company will be in a position to better determine its future funding requirements. See section on 'Rockhopper's Italian Assets' below for further details.

Background to Rockhopper and the Sea Lion Project
The Company is an AIM-quoted oil and gas exploration and production company based in the UK with key interests in the Falkland Islands. It was established in 2004 and admitted to trading on AIM in August 2005. Rockhopper's current market value is approximately 36.6million. Since 2004, the Company has built a portfolio of licences in the North Falkland Basin, containing Sea Lion and satellite discoveries. The Company discovered Sea Lion in May 2010 and went on to appraise and flow-test the field during the remainder of 2010 and 2011, as operator with a 100 per cent. working interest. Sea Lion is accordingly well appraised and has been the subject of many years of sub-surface, facilities engineering and pre-development work.

Sea Lion has been independently audited on a number of occasions, including by ERC Equipoise Limited ("ERCE") in 2016, to contain in excess of 500 mmbbls of recoverable oil on a 2C Contingent Resource basis, and 900 mmbbls of recoverable oil on a 3C Contingent Resource basis. For comparative purposes, based on this independent assessment, Sea Lion would be one of the largest undeveloped oil fields in the UK North Sea if it were located on the UK continental shelf.

The Company notes that, in May 2022, Navitas separately commissioned Netherland Sewell & Associates, Inc. (a third party mineral expert) to conduct its own independent audit of the contingent and prospective resources of Sea Lion, which followed a different approach to the ERCE 2016 audit. The results of this audit indicate higher contingent and prospective resources than concluded by ERCE in its 2016 audit. In 2012, the Company farmed down 60 per cent. and operatorship of its licence interests in the North Falkland Basin, including Sea Lion, to Premier Oil.

From 2012 to 2021, Premier Oil undertook various pre-development activities including front end engineering and design and other studies with the aim of developing the field. Premier Oil submitted an 'Environmental Impact Assessment' and draft 'Field Development Plan' to FIG. The 'Environmental Impact Assessment' was accepted by FIG in 2020. Furthermore, significant efforts were historically expended to secure financing for the project. The Company estimates the total cost of the work conducted to date to be in excess of US$300 million.

In March 2021, Premier Oil was acquired by Chrysaor Holdings Limited to create Harbour Energy. As part of the acquisition, Harbour Energy conducted a strategic review of Premier Oil's asset portfolio and concluded in September 2021 that Sea Lion, amongst other development assets it was acquiring, was not a strategic fit for the enlarged business. As a result, Harbour Energy decided to exit its interests in the Falkland Islands.


Argentina >>  8/12/2022 - Echo Energy plc, the Latin American focused Energy company, is pleased to announce a proposed comprehensive debt restructuring together with a placing...
Nigeria >>  8/12/2022 - Seplat Energy PLC ("Seplat" or the "Company"), a leading Nigerian independent energy company listed on both the Nigerian Exchange Limited and London S...

United Kingdom >>  8/12/2022 - Highlights
Share placement commitments to raise A$14.9 million gross proceeds.
Issue price of A$0.009 per share represents a 18.2% dis...

United States >>  8/12/2022 - The Board of Directors of Westlake Corporation authorized the company to repurchase an additional $500 million of shares of its common stock under its...

United States >>  8/12/2022 - Canadian Overseas Petroleum Limited ("COPL" or the "Company"), an international oil and gas exploration, production and development company with produ...
Bermuda >>  8/11/2022 - This is a correction of press release issued August 11, 12:26 CET. Full pay out of the PSU award is subject to reaching $ 10.00 per share on 75% of th...




Gulf Oil and Gas
Copyright 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.