Sirius Petroleum Plc is delighted to announce that it has identified its first marginal oil field opportunity. In the circular sent to shareholders on 23 July 2008 when the Company embarked on its new strategy, Sirius announced that it proposed to raise between £500,000 and £2,000,000 in order to pay for technical, legal and financial due diligence on potential acquisition targets.
Now that the Company has progressed identification of its first opportunity, Sirius announces a placing for cash of 18,333,335 new ordinary shares of 0.25p each ("Ordinary Shares") at 6.0p per share (the “Placing") with both new and existing institutional shareholders to raise gross proceeds of £1.1 million (the “Placing Shares") to cover these costs and to provide working capital for the foreseeable future.
Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM, and dealings in the Ordinary Shares are expected to commence on 8 December 2009. The Placing Shares will rank equally with the Company’s existing issued Ordinary Shares.
Full details of the opportunity will be announced in due course following completion of relevant due diligence.
Sirius’s strategy in relation to marginal oil fields is to negotiate and enter into joint venture partnerships with oil majors and technical partners under which Sirius aims to negotiate opportunities such that:
Sirius will act as the financial partner to the venture and provide 100% of the funding in return for a 40% legal interest in the field; Sirius will hold an entitlement to 88% of net revenues preceding the recovery of the Company’s initial capital investment loan to the project and, thereafter, receive 40% of the revenues generated under the venture; and Sirius will not pay a farm-in fee to enter into the opportunity.
New Strategic Partnership
Sirius is pleased to announce that it has signed its fourth strategic partnership by way of letter of intent with Nigerian based Frontier Oil Limited ("Frontier") under which it is intended that the Company will work with Frontier to identify and negotiate an economic interest in marginal oil and gas field opportunities currently held by Shell Nigeria using Frontier’s significant experience and contacts.
Frontier acquired the Uquo field (OML 12) from Shell in 2003 with 4 wells previously drilled on the structure and it then drilled 2 new wells in 2007. The Uquo field is only 8km from ExxonMobil’s Qua Ibo oil export terminal. It is a stranded gas and oil field with multiple gas and oil monetization options.
Frontier is staffed by an experienced oil and gas team which include Chief Odoliyi Lolomari, former Group Managing Director of NNPC & OPEC representative. He was a founding member of the Nigerian National Oil Company (now NNPC) and the Department of Petroleum Resources. Engineer Dada Thomas is the Managing Director with 22 years experience in Shell Group. Dr Victor Koleade is also on the board of Frontier and was a former Director of AGIP with more than 35 years oil industry. In addition, Akin Aruwajoye was a former Deputy Managing Director of Nigerian Agip (Eni) and Wole Adefila, GM Operations, has more than 20 years industry experience including 10 years with Shell.
Sirius announced on 9 October 2009 that it had been granted a licence from the Department of Petroleum Resources ("DPR") of the Nigerian Ministry of Petroleum Resources to import refined oil products into Nigeria.
The Company is pleased to announce that it has commenced trading activities in November 2009 and is in the process of completing its first trade of refined product and is currently negotiating a second, more significant, trade. Sirius acts as broker in these trades and takes a commission fee and so is not exposed to principal risks in this activity.
Babatunde Agboola, Chairman of Sirius Petroleum, said:
“We have taken a prudent approach to our initial trading activities and are pleased with the progress to date.. More significantly, the announcement of the placing to allow us to undertake due diligence in relation to our first potential marginal field opportunity within our expected timeframe demonstrates the commitment of the Board to achieving the Company’s goals. We expect to make further announcements concerning additional interests in marginal fields in Nigeria over the coming months.”
Following the Placing the Company will have a total enlarged share capital of 520,827,720 Ordinary Shares. Sirius does not hold any Ordinary Shares in Treasury. Therefore, the total number of voting rights in the Company is 520,827,720 and 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 Financial Service Authority’s Disclosure and Transparency Rules.