Agreement to acquire hydrocarbon licences
VANE Minerals plc ("VANE" or the "Company")
Agreement to acquire hydrocarbon licences over 635,000 acres in Western Europe
VANE (AIM: VML) is pleased to announce that it has entered into a conditional sale and purchase agreement (the "SPA") to acquire the entire issued share capital of a company that is in the process of renewing two hydrocarbon exploration licences in Germany, covering an area of approximately 635,000 acres (the "Licences"). The SPA is conditional upon the renewal of the Licences by the licencing authorities which is anticipated to be in Q4 2013.
Matthew Idiens, CEO of VANE, commented: "We are extremely pleased to be able to report this positive development to shareholders. We have been working closely with unconventional oil and gas specialists whom we are intending to bring on to the team and hope to be able to announce progress on this soon. We believe this transaction represents a significant opportunity to enter the unconventional oil and gas arena in a highly prospective geological setting with multiple target zones."
"As with all European shale gas projects, there is an element of risk, particularly from the environmental lobby at this stage of the development of a new industry , but we feel the potential returns and timing of this opportunity represent an excellent risk reward ratio and it has the potential to add significant value to the Company."
Material acquisition terms
Under the terms of the SPA, VANE is required to make an initial non-refundable payment of €300,000 which is payable in order to secure the SPA following approval of the resolutions relating to the recent subscription which are to be considered at the General Meeting on 15 August 2013, further details of which were announced on 30 July 2013 (the "Resolutions"). In the event that the Resolutions are not passed then this payment is not required to be made and the SPA will cease to be effective.
In the event that the Resolutions are passed, a further €100,000 is to be paid following the renewal of the Licences at which point the acquisition will be completed and VANE will become the 100% owner of the entity to which the Licences have been granted. There can be no guarantee of when renewal of the Licences will be forthcoming, if at all.
The SPA provides that no liabilities will transfer to VANE at completion of the SPA save that the Licences will be subject to an overriding royalty interest (ORRI) of 2.5% of gross sales of hydrocarbons less certain costs.
Background to the licences
The Licences cover areas which the directors of VANE believe offer significant potential for unconventional oil and gas.
The first of the Licences covers an area of 369,863 acres and has significant historic data available, including two oilfields and two deep wells in the area, which have enabled the identification of four main targets: (a) shale oil in Tertiary black shales (Schöneck shales); (b) shale oil in Lower Jurassic (Posidonienschiefer) black shales; (c) shale gas in Early Permian (Autunian) black shales; and (d) tight gas in Upper Carboniferous (Stephanian) sandstones. All of these targets can be tested with a single borehole. All the shale sections have been sampled and show promising geochemical, maturity and petrological properties.
The second of the Licences, which covers an area of 266,073 acres, has less historic data as the first area, but the directors of VANE believe that it has similar target zones: (a) shale oil in Tertiary black shales (Schoeneck shales); (b) shale oil in Lower Jurassic Posidonienschiefer black shales; and (c) possibly shale gas and tight gas from Early Permian & Upper Carboniferous formations. Additional seismic data will be required to confirm the targets. Two conventional oilfields exist as separate permits in this licence area, owned by a third party. Geochemical studies have shown that the conventional oil and gas fields in the area were charged by the Lower Jurassic and, probably, the Tertiary black shales. The deeper Paleozoic shales are efficiently sealed by Upper Paleozoic and Triassic rocks.
Unaudited consolidated management accounts of the company being acquired show total assets of £549,320 at 30 June 2013, a loss of £71,063 for the year to 31 December 2012 and no revenue to date.
For further information, please contact:
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VANE Minerals plc Matthew Idiens, CEO
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+44 (0) 20 7225 4595 www.vaneminerals.com |
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Allenby Capital (Nominated Adviser and Broker) Jeremy Porter/Alex Price |
+44 (0) 20 3328 5656 |
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Bankside Consultants Simon Rothschild |
+44 (0) 20 7367 8888 |
Kristopher K. Hefton, BSc Geology, Chief Operating Officer VANE Minerals plc, who meets the criteria of a qualified person under the AIM Rules - Note for Mining and Oil & Gas Companies, has reviewed and approved the technical information contained within this announcement.
This information is provided by RNS
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