Cluff Natural Resources Plc, the AIM quoted natural resources investing company with a high impact exploration and appraisal portfolio focused on the Southern and Central North Sea, is pleased to announce a placing and subscription of new ordinary shares (“Ordinary Shares”) to raise minimum gross proceeds of approximately £15 million.
· Proposed placing of new Ordinary Shares (the “Placing Shares”) with new and existing institutional investors (the “Placing”) and subscription for new Ordinary Shares (the “Subscription Shares”) by certain Directors and senior management of the Company (the “Subscription”) to raise minimum gross proceeds of approximately £15 million at a price of 1.75 pence per new Ordinary Share (the “Placing Price”) (the “Fundraising”).
· The net proceeds of the Fundraising will be used to fund the Company’s share of well costs on the Selene (Licence P2437) and Pensacola (Licence P2252) prospects targeting a combined 238 BCF of net P50 Prospective Resource; to invest in advancing its other North Sea licences and potential future licence awards; and for general, working capital and corporate purposes.
· The Fundraising follows the recent completion of the farm out of Licence P2252 to Shell U.K. Limited (“Shell”) and Shell’s exercise of its option to farm into Licence P2437.
· Following Shell’s exercise of its option to acquire a 50 per cent. working interest in Licence P2437, which holds Selene, a 291 BCF (gross P50 Prospective Resource) (145 BCF net) prospect, Cluff holds a 50 per cent. working interest (subject to completion of the farm out).
· Shell will pay 75 per cent. of the costs of the first well on Licence P2437 (up to US$25 million) and has indicated an intention to drill a well at the soonest possible opportunity, potentially during 2020.
· Shell completed its 70 per cent. farm into Licence P2252 (Cluff 30 per cent. WI) at the end of May 2019. The licence holds the 309 BCF (gross P50 Prospective Resource) (93 BCF net) Pensacola prospect and Shell will carry Cluff for 100 per cent. of the licence work programme through to the earlier of a well investment decision or 31 December 2020.
· The Company continues to progress its other licences, including P2352 (Cluff 100 per cent. WI) which holds the 39.5 mmbo (gross P50 Prospective Resource) Dewar oil prospect in the Central North Sea, for which it intends to commence farm out marketing by mid-2019.
· The Company plans to continue to grow its asset base through participating in future licensing rounds including the upcoming 32nd Licensing Round, expected to open in summer / mid-year 2019.
Commenting, Cluff’s Chief Executive Graham Swindells said:
“We are delighted to announce this transformational fundraising which will fully fund the Company to drill its two high-impact wells with Shell at Selene and Pensacola while also allowing us to continue to further expand and de-risk the rest of our portfolio. This fundraising allows us to build on the recent success achieved with the substantial expansion of our portfolio of licences in the last UK licensing round as well as the introduction of Shell as a partner on two of our licences.
“Our company is now entering an exciting operational phase of its growth with line of sight over the drilling of at least two wells in the Southern North Sea while continuing to grow and diversify our portfolio of highly prospective oil and gas assets.
“We are highly encouraged by the support from existing and new shareholders and look forward to further delivery as we seek to create value for shareholders.”
Stifel Nicolaus Europe Limited (“Stifel”) is acting as bookrunner to the Company in connection with the Placing. Allenby Capital Limited (“Allenby”) is acting as Nominated Adviser to the Company.
The Placing is being conducted through an accelerated bookbuilding process (the “Bookbuild”) which will be launched immediately following this Announcement and will be made available to eligible institutional investors. The Bookbuild is expected to close no later than 8 a.m. on 6 June 2019, but Stifel and the Company reserve the right to close the Bookbuild earlier or later, without further notice.
The Company’s largest shareholder, IPGL Limited (“IPGL”), has indicated that it intends to participate in the Placing in an amount equivalent to 20 per cent. of the Fundraising up to £3.4 million. The final number of Placing Shares which will be allocated to IPGL is at the absolute discretion of Stifel and the Company and will be confirmed following the close of the Bookbuild.
Certain Directors and members of the Company’s senior management team have indicated that they intend to participate in the Fundraising by subscribing directly with the Company for new Ordinary Shares at the Placing Price.