Variation of terms of Warrant Undertaking

RNS Number : 5407U

Silvermere Energy PLC

23 December 2011

 



23 December 2011

Silvermere Energy PLC

("Silvermere" or "the Company")

Variation of terms of Warrant Undertaking

Further to the operational update announcement on 20 December 2011, Silvermere, the independent oil and gas company, focusing principally on exploration, appraisal and production opportunities in the US, announces that it has agreed a variation of the terms of the warrant undertaking entered into with the Company at the time of admission by T1ps Investment Management Limited ("T1ps"). T1ps is the discretionary fund manager of SF T1ps Smaller Companies Growth Fund and Elite T1ps Income & Growth Fund. SF T1ps Smaller Companies Growth Fund and Elite T1ps Income & Growth Fund own 11.9 per cent and 7.23 per cent, respectively, of the issued share capital of Silvermere.

Under the terms of the warrant undertaking, the Company was due to give the second notice by 22 December 2011 under which T1ps would exercise 333,333 placing warrants at a price of 30 pence to provide £100,000 of additional working capital for the Company during the installation phase for the I-1 Well on its Mustang Island asset located in Kleberg County, Texas waters in the Gulf of Mexico.

As a result of the delay in production plans, the Company does not expect to require the funds immediately. T1ps has requested and the Company has agreed that the latest date for the second notice to be given under the warrant undertaking will be extended from 22 December 2011 to 22 March 2012. The Company expects to exercise the second notice in the first half of March 2012 in line with the new installation and production timetable.

Due to the size of the shareholding of SF T1ps Smaller Companies Growth Fund, the variation of the terms of the warrant undertaking constitutes a related party transaction as defined by the AIM Rules. The directors of the Company, having consulted with Merchant Securities Limited, the Company's nominated adviser, consider that the variation of the terms of the warrant undertaking is fair and reasonable insofar as Shareholders are concerned.

-ENDS-

For further information please contact: Silvermere Energy PLC Andy Morrison, Chief Executive	[phone]
Merchant Securities Limited (Nominated Adviser and Broker) Lindsay Mair/Virginia Bull Rivington Street Corporate Finance Limited Jon Levinson/Dru Edmonstone	+ 44(0)20 7628 2200  [phone]
Bishopgate Communications Nick Rome/Shabnam Bashir	[phone]

About Silvermere Energy PLC

The Company acquired its interest in the Mustang Asset on 30 August 2011.  This comprises a 33.33 per cent. working interest and 20.83 per cent. net entitlement interest in the Mustang Licence Area, an area within the southern half of the north west quarter and northern half of the south west quarter of the Block 818-L field as defined in State of Texas Oil and Gas Lease numbers 108873 and 108874. The Mustang Island 818-L field, located in Kleberg County waters of the Gulf of Mexico, is a field re-habilitation project targeting bypassed or only partially produced gas-condensate.

Early in 2011 the Hercules Offshore 205 jack-up rig was contracted to re-enter the I-1 Well on the Mustang Licence Area which was considered to be the most likely of the historic well sites to provide 14 optimum re-entry conditions. The I-1Well re-entry and side-tracking operation was completed in March 2011 leaving it ready to complete in sand horizons I-1 to I-6. Production and flow testing was carried out during June 2011. The well re-entry programme was led by Dominion as the operator. Gas and oil produced from the I-1Well is proposed to be connected to pipeline infrastructure and tied in via a subsea assembly, constructed for the purpose and then transported to the Six Pigs gas facility.

Silvermere's strategy is to acquire a portfolio of US oil and gas licence interests onshore and in shallow offshore waters, characterised by relatively low risk and low cost with the potential for near term production.

Silvermere is quoted on the AIM Market of the London Stock Exchange plc (AIM: SLME) with its offices in London.

 

END

 

 

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