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Gulfsands Petroleum (GPX)

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Wednesday 16 December, 2015

Gulfsands Petroleum

Publication of Prospectus

RNS Number : 2787J
Gulfsands Petroleum PLC
16 December 2015






Gulfsands Petroleum Plc


Publication of Open Offer Prospectus


16 December 2015


Gulfsands Petroleum Plc ("Gulfsands" or the "Company"), the AIM listed oil and gas exploration company (AIM:GPX) with activities in Syria, Morocco, Tunisia and Colombia, is pleased to announce the publication and dispatch to Qualifying Shareholders today of its Open Offer Prospectus, which is also available on the Company's website, Capitalised terms in this announcement are as defined in the Prospectus unless the context otherwise requires.


Background to Open Offer


On 27 August 2015, the Company announced a Capital Raising to raise gross proceeds of £14.2 million (approximately US$22.0 million) before costs by way of an Open Offer. The Open Offer was conditional upon, among other things, the passing of certain resolutions to permit the Open Offer to proceed. On 14 September 2015, the Company held a general meeting of Shareholders to vote on the resolutions, all of which were duly passed by Shareholders.


As a result, the Company is pleased to dispatch its Prospectus to Shareholders setting out the detailed terms and conditions of the Open Offer. The Open Offer is to be made to all Qualifying Shareholders (which excludes those Shareholders resident in Australia and the US) to provide an opportunity to subscribe for an aggregate of 354,837,296 Open Offer Shares (representing a subscription of 350,733,941 new Ordinary Shares and a purchase of 4,103,355 Treasury Shares) on the basis of 3.01 Open Offer Shares for every 1 Existing Share held as at the Record Date, at an Open Offer Price of 4.0 pence per Open Offer Share. The Company proposes to issue and allot the Open Offer Shares to Qualifying Shareholders who have validly subscribed for such shares following the Open Offer Closing Date.


Waterford and Mr. Griffiths, as existing Shareholders in the Company, have each irrevocably undertaken to subscribe for their full entitlements under the Open Offer and have undertaken to underwrite the remaining Open Offer Shares whereby they will acquire any of these shares that are not subscribed for by Qualifying Shareholders under the Open Offer. The net result of this is that, in the event that no other Qualifying Shareholder elects to take up its Open Offer Entitlements, the Open Offer shall be fully subscribed by Waterford and Mr. Griffiths by way of the Underwriting.


Shareholders are encouraged to read the Open Offer Prospectus in full and should not subscribe for or purchase any Open Offer Shares solely on the basis of this announcement.


Related Party Transaction


The subscription by Waterford, as a holder of in excess of 10 per cent. of the Existing Shares, for Open Offer Shares under the Underwriting is considered a related party transaction under the AIM Rules. The independent Directors for the purposes of the Open Offer, being Mr. West, Mr. Morris, Mr. Darby and Mr. Bell, consider, having consulted with Cantor Fitzgerald as the Company's nominated adviser, that the terms of the Underwriting are fair and reasonable insofar as the Company's Shareholders are concerned.


Re-classification of Reserves in Syria


The technical information in the Open Offer Prospectus, referring to reserves and resources, has been prepared in accordance with the PRMS as adopted in 2007 and the PRMS Guidelines as adopted in 2011. The Company prepares its estimate of reserves and resources for each of its assets in accordance with the PRMS and the PRMS Guidelines and, unless stated otherwise, these estimates are independently audited by LR Senergy Limited.


For hydrocarbon accumulations to be classified as reserves they must be discovered, recoverable and commercial; a further consideration is the timing of their proposed development and the PRMS refers to a benchmark of five years from the date of the evaluation for the initiation of development. Furthermore, the PRMS Guidelines consider the rare situation for reserves to be re-classified as contingent resources as a consequence of an unforeseen event that is beyond the control of the operator and partners in the asset, such as unexpected political or legal change that causes the development activity to be delayed beyond a reasonable time frame (as defined in the PRMS) of five years.


Notwithstanding that the hydrocarbons discovered on the Block 26 PSC in Syria have been evaluated as reserves for several years leading up to, and after, the imposition of EU Sanctions in Syria, and that commercial production from the Block 26 area has exceeded 21MMbbls, for the purposes of the Open Offer Prospectus, the volumes of oil previously reported as 2P reserves have been re-classified by the Company as 2C contingent resources on the basis that the Company cannot give a definite timeline for the resumption of the full field development of the discovered fields within Block 26 that was suspended under the declaration of Force Majeure in 2011. This has resulted in total 2C contingent resources in Syria of 85.5MMboe, and total 2P reserves of zero as at the date of this announcement. This re-classification has been audited by LR Synergy Limited, independent reserve/resource engineers.


Whist no definite timeline can be substantiated, the Board continues to believe that the EU Sanctions will be lifted within five years and will continue to monitor all activity focused on resolving the situation in Syria and reconsider the basis for reversing this re-classification in line with any future developments.


Expected Timetable of Principal Events


Record Date for the Open Offer


5.00 p.m. on 14 December 2015

Publication date and posting of Prospectus to Qualifying Shareholders


16 December 2015

Ex-entitlement date for the Open Offer


8.00 a.m. on 17 December 2015

Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders


As soon as possible after 8.00 a.m. on 17 December 2015

Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST


4.30 p.m. on 29 December 2015

Latest time for depositing Open Offer Entitlements into CREST


3.00 p.m. on 30 December 2015

Latest time and date for splitting of Application Forms


3.00 p.m. on 31 December 2015

Latest time and date for receipt of completed Application Forms, and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)


11.00 a.m. on 5 January 2016

Admission effective and trading expected to commence in the Open Offer Shares


8.00 a.m. on 7 January 2016

CREST members' accounts credited in respect of Open Offer Shares in uncertificated form


As soon as possible after 8.00 a.m. on 7 January 2016

Share certificates in respect of Open Offer Shares expected to be dispatched by no later than


13 January 2016

Open Offer Long Stop Date


31 January 2016



For further information please contact:


Gulfsands Petroleum Plc

Alastair Beardsall, Chairman


+44 (0)20 7024 2130

Cantor Fitzgerald Europe

Sarah Wharry

David Porter


+44 (0)20 7894 7000




This announcement is not a prospectus and Qualifying Shareholders should not acquire any Open Offer Shares referred to in this announcement except on the basis of the information contained in the Prospectus.


Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this announcement. The distribution of this announcement, the Prospectus and any other documentation into jurisdictions other than the UK may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws or regulations of any such jurisdiction. In particular, such documents should not be distributed, forwarded to or transmitted, directly or indirectly, in whole or in part, in, into or from the United States or Australia or any other jurisdiction where to do so may constitute a violation of the securities laws or regulations of any such jurisdiction.


No action has been taken by the Company or any other person that would permit an offer of the Open Offer Shares or possession or distribution of this announcement, the Prospectus or any other documentation or publicity material or the Application Forms in any jurisdiction where action for that purpose is required, other than in the UK.


The Open Offer Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and, accordingly, may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within the United States except in reliance on an exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.


There will be no public offer of the Open Offer Shares in the United States. The Open Offer Shares are being offered and sold outside the US in reliance on Regulation S under the US Securities Act. The Open Offer Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Open Offer Shares or the accuracy or adequacy of the Application Form or this announcement. Any representation to the contrary is a criminal offence in the US.


The Open Offer Shares have not been and will not be registered under the relevant laws of any state, province or territory of any Restricted Jurisdiction and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within any Restricted Jurisdiction except pursuant to an applicable exemption from registration requirements. There will be no public offer of Open Offer Shares in Australia.


This announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in any jurisdiction and should not be relied upon in connection with any decision to subscribe for or acquire any of the Open Offer Shares. In particular, this announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States.


This announcement has been issued by, and is the sole responsibility of, the Company. No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by the Company or Cantor Fitzgerald. The issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this announcement or that the information contained in it is correct at any subsequent date.


Cantor Fitzgerald, which is authorised and regulated in the UK by the FCA, is acting for the Company and no one else in connection with the Capital Raising and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Capital Raising and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Capital Raising or any matters referred to in this announcement.


Apart from the responsibilities and liabilities, if any, which may be imposed on Cantor Fitzgerald by the FSMA or the regulatory regime established thereunder, Cantor Fitzgerald accepts no responsibility whatsoever for the contents of this announcement, and makes no representation or warranty, express or implied, for the contents of this announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Open Offer Shares or the Capital Raising, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect whether as to the past or future. Cantor Fitzgerald accordingly disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.


No statement in this announcement is intended to be a profit forecast or estimate and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.


This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law or by the AIM Rules, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this announcement.


This announcement should not be considered a recommendation by the Company, Cantor Fitzgerald or any of their respective directors, officers, employees, advisers or any of their respective affiliates, parent undertakings, subsidiary undertakings or subsidiaries of their parent undertakings in relation to any purchase of or subscription for the Open Offer Shares. Price and volumes of, and income from, securities may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. You are advised to read this announcement and, once available, the Prospectus and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Group's future performance and the industry in which it operates. Persons needing advice should consult an independent financial adviser.


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