Information  X 
Enter a valid email address

San Leon Energy PLC (SLE)

  Print      Mail a friend       Annual reports

Monday 12 November, 2012

San Leon Energy PLC

Recommended Merger of San Leon and Aurelian

RNS Number : 8533Q
San Leon Energy PLC
12 November 2012
 



Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction.

FOR IMMEDIATE RELEASE                                                                            12 November 2012

Recommended Merger

of

San Leon Energy plc

and

Aurelian Oil & Gas plc

 

to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

Summary

·              The Boards of San Leon and Aurelian are pleased to announce that they have reached agreement on the terms of a recommended merger pursuant to which San Leon will acquire the entire issued and to be issued share capital of Aurelian.

·              The Boards of San Leon and Aurelian believe that the asset portfolios of the two companies are highly complementary and that the Merger represents a compelling strategic and cultural fit which will provide significant benefits to shareholders in the Enlarged Company.

·              Under the terms of the Merger, Aurelian Shareholders will be entitled to receive:

1.3 New San Leon Shares for each Aurelian Share

·              Following the Merger becoming effective, based on the Merger Ratio of 1.3 New San Leon Shares for every Aurelian Share held:

existing Aurelian Shareholders will hold approximately 34 per cent. of the Enlarged Company; and

existing San Leon Shareholders will hold approximately 66 per cent. of the Enlarged Company.

·              Based on San Leon's closing middle market price of 9.59 pence per San Leon Share on 9 November 2012, being the Business Day immediately prior to the date of this announcement, the Merger values each Aurelian Share at approximately 12.47 pence and the whole of the issued share capital of Aurelian at approximately £61.6 million and represents a premium of:

13.3 per cent. over the closing middle market price of 11.00 pence per Aurelian Share on 9 November 2012 (being the Business Day immediately prior to the date of this announcement); and

23.3 per cent. over the volume weighted average price of 10.11 pence per Aurelian Share in the one month period to 9 November 2012 (being the Business Day immediately prior to the date of this announcement).

·              The Boards of San Leon and Aurelian believe that the Enlarged Company has the potential to become a leading exploration and production company across Europe and North Africa.

·              Both San Leon and Aurelian hold significant acreage positions in Poland, and the Merger will make the Enlarged Group the largest foreign acreage holder in that country.  The merger of the asset base and experienced management teams are expected to enable the Enlarged Group to optimise the portfolio and expedite the path to production.

·              The Boards of San Leon and Aurelian believe the Enlarged Group offers near term cash flow potential in Poland, while it will also possess high impact growth potential in a well-balanced conventional and unconventional exploration portfolio, particularly in Poland, Morocco and Albania.

·      Following implementation of the Merger, the Enlarged Company will be led by a management team comprising Oisin Fanning as Executive Chairman, Paul Sullivan as Managing Director and John Buggenhagen as Exploration Director. The Board of the Enlarged Company will also include John Conlin (the current Chairman of Aurelian), John Matthews (the acting Finance Director of Aurelian), Piotr Rozwadowski (a current Non-Executive Director of Aurelian), Ray King (the current Company Secretary of San Leon), Con Casey (a current Non-Executive Director of San Leon), Daniel Martin (a current Non-Executive Director of San Leon) and Dr. Jeremy Boak (a current Non-Executive Director of San Leon). Upon the Scheme becoming Effective each of Rowen Bainbridge, John Smallwood, David Prior, Dariusz Mioduski and David Walker have agreed to step down as Directors of Aurelian.

·              It is intended that the Merger will be implemented by means of a scheme of arrangement of Aurelian under Part 26 of the Companies Act.

·              The Merger is conditional on, among other things, certain approvals by Aurelian Shareholders and the sanction of the Scheme by the Court.

·              It is currently expected that the Scheme Circular will be published later this month and that, subject to the satisfaction, or where relevant waiver, of all relevant Conditions, the Scheme will become Effective and the Merger completed in early 2013.

·              The Aurelian Board intends unanimously to recommend that Aurelian Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting which are to be convened to approve the Merger, as they have irrevocably undertaken to do in respect of their own personal interests totalling 3,617,595 Aurelian Shares, representing approximately 0.73 per cent of the Aurelian Shares (as further described in Appendix III).

·              San Leon has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to effect the Merger at the General Meeting from Kulczyk Investments S.A.,Toscafund Asset Management LLP and Lord Sainsbury in respect of an aggregate total of 207,866,958 Aurelian Shares, representing approximately 42.06 per cent. of the issued ordinary share capital of Aurelian. In addition, a letter of intent has been received from Cheyne Capital Management (UK) LLP in relation to 23,598,420 Aurelian Shares representing approximately 4.77 per cent. of the issued  ordinary share capital of Aurelian confirming its current intention to use its reasonable endeavours to persuade the owner of 23,598,420 Aurelian Shares, in relation to which it holds contracts for difference, to vote in favour of the Merger.

·              In aggregate, therefore, irrevocable undertakings and letters of intent to vote in favour of the Scheme at the Court Meeting and the resolutions to effect the Merger at the General Meeting have been received in respect of a total of 235,082,973 Aurelian Shares, representing approximately 47.56 per cent. of the ordinary share capital of Aurelian in issue.  

·              The Aurelian Board has been advised by Greenhill and Oriel. The Aurelian Board, which has been so advised by Greenhill (as the independent adviser for the purposes of the Takeover Code), considers the terms of the Merger to be fair and reasonable. In providing its advice to the Aurelian Board, Greenhill has taken into account the commercial assessments of the Board.

·              The San Leon Board has been advised by Fox-Davies Capital.

Commenting on the Merger, John Conlin, Chairman of Aurelian said:

"I am delighted to have reached this agreement with the San Leon Board. We followed a rigorous process to find the right way forward to unlock the value in the Aurelian portfolio. The Aurelian Board believes the proposed merger provides Aurelian with the right combination of technical and deal-making capability and exploration upside and maintains exposure for our shareholders in the material unconventional resources play in Poland."           

Rowen Bainbridge, Chief Executive of Aurelian stated:

"The proposed merger between Aurelian and San Leon creates a leading upstream position in Poland with complementary play types, capabilities and relationships covering both conventional and un-conventional resources. The integration of Aurelian and San Leon's Permian Basin assets and the combined conventional exploration portfolio elsewhere in Europe and North Africa offer a high impact forward program over the next 12 to 18 months. I believe the value proposition in the deal for shareholders is compelling."

Commenting on the Merger, Oisin Fanning, Executive Chairman of San Leon said:

"A merger with Aurelian makes perfect sense for the shareholders of both companies. The combination of cash resources and the Polish asset base alone creates an obvious and exciting opportunity to realise substantial growth. Both management teams have built up a tremendous amount of experience and we can now employ that to pursue a best-of-portfolio near term value creation strategy.  The combined entity offers shareholders material conventional and unconventional plays in stable and highly import-dependent countries."

This summary should be read in conjunction with the full text of the following announcement including the Appendices.  The Conditions and certain further terms of the Merger are set out in Appendix I to this announcement. Appendix II contains details of the sources and bases of certain information contained in this announcement. Appendix III contains details of the irrevocable undertakings given to San Leon.  Appendix V contains the definitions of certain terms used in this announcement and Appendix VI contains a glossary of acronyms and technical terms used in this announcement.

 

A conference call for analysts and professional investors will be held at 8.30am today.  Dial in details can be obtained from College Hill - telephone +44 (0)20 7457 2020.

Enquiries:

 

San Leon Energy plc

+353 1291 6292

   020 36173913

Oisin Fanning

 

John Buggenhagen

 

Fox-Davies Capital Limited (financial adviser and joint broker to San Leon)

020 3463 5000

Susan Walker

Daniel Fox-Davies

 

Westhouse Securities Limited (nominated adviser to San Leon)

020 7601 6100

Richard Johnson

 

Antonio Bossi


College Hill (public relations adviser to San Leon)

020 7457 2020

Rupert Trefgarne

 

Alexandra Roper


Plunkett PR (public relations adviser to San Leon in Republic of Ireland)

+353 1 2844414

Sharon Plunkett


Aurelian Oil and Gas plc

 

Rowen Bainbridge, CEO

020 7629 7986

Greenhill & Co. International LLP (joint financial and Rule 3 adviser to Aurelian)

020 7198 7400

Mark Bentley

 

Anastasia Fadeeva

 

Oriel Securities Limited (joint financial adviser and broker to Aurelian)

020 7710 7600

David Arch


James Brodie


RFC Ambrian Limited (nominated adviser to Aurelian)

020 3440 6800

Richard Morrison

 

College Hill (public relations adviser to Aurelian)

020 7457 2020

Matthew Tyler

 

Catherine Wickman


Further information

This announcement is not intended to and does not constitute, or form part of, any offer to sell or subscribe for or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Merger or otherwise, nor shall there be any sale, issuance or transfer of securities of Aurelian and/or San Leon in any jurisdiction in contravention of applicable law. This announcement does not constitute a prospectus or a prospectus equivalent document.

Any vote in respect of the Merger should only be made on the basis of the information contained in the Scheme Circular, which will contain the full terms and conditions of the Merger (including details of how to vote). Aurelian Shareholders are advised to read the Scheme Circular carefully once they have been dispatched.

Please be aware that addresses, electronic addresses and certain other information provided by Aurelian Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Aurelian may be provided to San Leon during the Offer Period as required under Section 4 of Appendix 4 of the Code.

Fox-Davies Capital Limited which is authorised and regulated in the United Kingdom by the FSA, is acting for San Leon as financial adviser in relation to the Merger and is not acting for any other person in relation to such Merger. Fox-Davies Capital Limited will not be responsible to anyone other than San Leon for providing the protections afforded to clients of Fox-Davies Capital Limited or for providing advice in relation to this announcement or any other matter referred to herein.

Greenhill & Co. International LLP which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Aurelian and no-one else in connection with the Merger and will not be responsible to anyone other than Aurelian for providing the protections afforded to clients of Greenhill & Co. International LLP nor for providing advice in relation to the Merger or any other matter referred to herein.

Oriel Securities Limited which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Aurelian and no-one else in connection with the Merger and will not be responsible to anyone other than Aurelian for providing the protections afforded to clients of Oriel Securities Limited nor for providing advice in relation to the Merger or any other matter referred to herein.

Overseas jurisdictions

The availability of New San Leon Shares in, and the release, publication or distribution of this announcement in or into, jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes who are not resident in the United Kingdom should inform themselves about, and observe, any applicable restrictions. Aurelian Shareholders who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement has been prepared for the purposes of complying with English law, the Takeover Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Notes to US investors

Shareholders in the United States should note that the acquisition of Aurelian by San Leon relates to the shares of a "foreign private issuer" as defined under Rule 3b-4 under the US Securities Exchange Act of 1934, as amended (the "Exchange Act") and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, English law. Neither the proxy solicitation nor the tender offer rules under the Exchange Act will apply to the Scheme. Moreover, the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. Financial information included in this announcement has been or will be prepared in accordance with accounting standards applicable in the UK and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

Aurelian is organised under the laws of England and San Leon is organised under the laws of Ireland. To the extent that Aurelian's and San Leon's officers and directors are residents of countries other than the United States it may not be possible to effect service of process on Aurelian, San Leon, or their respective officers or directors in a non-US court for violations of US securities laws. It may be difficult to compel Aurelian, San Leon, their respective affiliates, and/or the respective officers or directors of each, to subject themselves to the jurisdiction and judgment of any US court.

The New San Leon Shares to be issued pursuant to the Scheme have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under the relevant securities laws of any state or territory or other jurisdiction of the United States. Accordingly, the New San Leon Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States, or to or for the account or benefit of any US Person, absent registration under the US Securities Act or an exemption therefrom. The New San Leon Shares are expected to be offered in the United States, if at all, in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. None of the securities referred to in this document have been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the United States. This document does not constitute an offer to sell, or the solicitation of any offer to buy, any New San Leon Shares in any jurisdiction in which such an offer or solicitation would be unlawful.

The New San Leon Shares to be issued pursuant to the Scheme have not been and will not be registered under the relevant securities laws of Japan and the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada or Australia. Accordingly, the New San Leon Shares are not being, and may not be, offered, sold, resold, delivered or distributed, directly or indirectly in or into Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of relevant laws of, or require registration thereof in, such jurisdiction (except pursuant to an exemption, if available, from any applicable registration requirements or otherwise in compliance with all applicable laws). No prospectus in relation to the New San Leon Shares has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of Aurelian or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) Aurelian and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of Aurelian or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of Aurelian or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of Aurelian or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) Aurelian and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of Aurelian or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by Aurelian and by any offeror and Dealing Disclosures must also be made by Aurelian, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

This announcement contains certain forward-looking statements, including statements regarding the San Leon's and Aurelian's plans, objectives and expected performance. Such statements relate to events and depend on circumstances that will occur in the future and are subject to risks, uncertainties and assumptions. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, among others the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the Energy industry; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. These forward-looking statements speak only as at the date of this document.

Qualified Persons

The technical information and opinions contained in this announcement relating to Aurelian have been reviewed by Dr John Smallwood BA (Cantab), MA, PhD (Cantab), FGS, C.Geol, Aurelian's Exploration Director who has 18 years of post-graduate experience in geoscience research, oil exploration and production. He has reviewed and consented to the inclusion herein of such technical information and opinions.

The technical information and opinions contained in this announcement relating to San Leon have been reviewed by Dr John Buggenhagen who has over 15 years experience in the oil and gas industry. Dr Buggenhagen has a Ph. D. And M.Sc. in Geophysics from the University of Wyoming and a B.Sc. in Geophysics from the University of Arizona. He is currently the Director of Exploration for San Leon and based in San Leon's Warsaw office in Poland and has reviewed and consented to the inclusion herein of such technical information and opinions.

Rule 2.10 requirement

In accordance with Rule 2.10 of the Code, San Leon confirms that as at the date of this announcement, it has in issue and admitted to trading on AIM, 1,144,004,250 ordinary shares of €0.05 each (excluding any ordinary shares held in treasury). The International Securities Identification Number ("ISIN") of the San Leon Shares is IE00B3CLK236.

Publication of this announcement

A copy of this announcement will be available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on www.sanleonenergy.com  and www.aurelianoil.com.

The contents of San Leon's website and Aurelian's website are not incorporated into and do not form part of this announcement.

 

Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction.

FOR IMMEDIATE RELEASE                                                                            12 November 2012

Recommended Merger

of

San Leon Energy plc

and

Aurelian Oil & Gas plc

 

SCHEME OF ARRANGEMENT OF Aurelian IN CONNECTION WITH ITS RECOMMENDED MERGER WITH San Leon

1.         Introduction

The Boards of Aurelian and San Leon are pleased to announce that they have reached agreement on the terms of a recommended merger.

The Boards of San Leon and Aurelian believe that the asset portfolios of the two companies are highly complementary and the Merger represents a compelling strategic and cultural fit which will provide significant benefits to shareholders in the Enlarged Company.

2.         Summary of terms

Under the terms of the Merger, Aurelian Shareholders will be entitled to receive:

 1.3 New San Leon Shares for each Aurelian Share

Based on San Leon's closing middle market price of 9.59 pence per San Leon Share on 9 November 2012, being the Business Day immediately prior to the date of this announcement, the Merger values each Aurelian Share at approximately 12.47 pence and the whole of the issued share capital of Aurelian at approximately £61.6 million and represents a premium of:

13.3 per cent. over the closing middle market price of 11.00 pence per Aurelian Share on 9 November 2012 (being the Business Day immediately prior to the date of this announcement);

23.3 per cent. over the volume weighted average price of 10.11 pence per Aurelian Share in the one month period to 9 November 2012 (being the Business Day immediately prior to the date of this announcement).

It is intended that the Merger will be implemented by means of a court-sanctioned scheme of arrangement of Aurelian under Part 26 of the Companies Act pursuant to which San Leon will acquire the entire issued and to be issued share capital of Aurelian. The Scheme requires approval by Aurelian Shareholders at the Court Meeting and the General Meeting to be held immediately after the Court Meeting. Further details of the Court-sanctioned scheme of arrangement and the requisite Aurelian Shareholder approvals are contained in paragraph 11 below.

Following the Merger becoming effective, based on the Merger Ratio of 1.3 New San Leon Shares for every Aurelian Share held:

existing Aurelian Shareholders will hold approximately 34 per cent. of the Enlarged Company; and

existing San Leon Shareholders will hold approximately 66 per cent. of the Enlarged Company.

The New San Leon Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid by reference to a record date falling after the date on which the Scheme becomes Effective and otherwise will rank pari passu in all respects with the San Leon Shares in issue at the time the New San Leon Shares are issued.

Fractions of New San Leon Shares will not be allotted to Aurelian Shareholders but the entitlements of Aurelian Shareholders will be rounded up or down (with 0.5 being rounded up) to the nearest whole number of New San Leon Shares.

3.         Background to and reasons for the Merger

The Boards of San Leon and Aurelian believe that the Enlarged Company has the potential to become a leading exploration and production company across Europe and North Africa.  The two companies have separately built extensive portfolios, particularly in Poland, and the proposed Board of the Enlarged Company believes that the Enlarged Group has the potential to deliver strong shareholder value through the exploration and development of key assets.

The Enlarged Group will unite the complementary asset portfolios under a management structure with a strong technical background and a track record of successfully commercialising its assets.

The Boards of San Leon and Aurelian believe the Enlarged Group offers near term cash flow potential in Poland, through San Leon's Nowa Sol oil targets in the Main Dolomite trend in the Southern Permian Basin, and Aurelian's Siekierki gas project on its Poznan concessions. The Boards also believe the Enlarged Group will possess high impact growth potential in a well-balanced conventional and unconventional exploration portfolio, particularly in Poland, Morocco and Albania.

Following completion of the Merger, the Enlarged Company will have one of the largest independent upstream asset positions in Poland, covering more than 7 million gross acres (4.9 million acres net to the Enlarged Group). It will also benefit from significant exploration interests in Albania, Morocco and Spain while further interests in Romania, Slovakia, Bulgaria, Germany, France, Ireland and Italy complete a diversified range of opportunities. The enlarged portfolio will comprise significant contingent and prospective exploration and appraisal assets, both conventional and unconventional.

Aurelian's portfolio, existing cash resources and utility company relationships will enhance the early production focus of San Leon in Poland's Permian Basin. Aurelian's partnership with PGNiG provides a solid basis for the commercialisation of hydrocarbon assets.

Key strengths, strategy and business plan

The Enlarged Group will benefit from a number of specific key strengths, and the management teams of San Leon and Aurelian have reached common agreement on a strategy for the Enlarged Group.

Both San Leon and Aurelian hold significant acreage positions in Poland, and the Merger will make the Enlarged Group the largest foreign acreage holder in that country.  The merger of the asset base and experienced management teams are expected to enable the Enlarged Group to optimise the portfolio and expedite the path to production.

The Enlarged Group intends to focus on low-cost early production alongside higher value impact exploration plays.

Reinforcement of the key strengths of both companies

San Leon and Aurelian have both expanded their oil and gas interests in Poland over the last five years. This transaction will merge the assets, management capabilities and professional relationships that San Leon and Aurelian have established.

The Polish portfolio of the Enlarged Group will hold contingent and prospective resources of significant scale. The San Leon management estimates the combined portfolio will have unrisked net prospective unconventional resources of 6,700 mmboe, net contingent conventional resources of approximately 66 mmboe and unrisked net prospective conventional resources of approximately 114 mmboe in the country. Shallow conventional oil provides a source of near term cash-flow potential, particularly from the main dolomite reservoir in the Permian Basin. Further details of the resources of Aurelian and San Leon are set out at Appendix IV.

The proposed Board of the Enlarged Company believes the directors and management of the Enlarged Company have a strong mix of technical and commercial skill sets supported by strong political relationships drawn from individually successful independent oil and gas companies. The Merger will allow the Enlarged Group to benefit from Aurelian's existing in-country geophysical and geological staff. The Merger is expected to result in the Enlarged Company being significantly better placed to develop its key strategic relationships with its partners.

Focussed on Europe's unconventional potential

The Enlarged Group will hold a strategically significant position across Europe's burgeoning unconventional play fairways. In Poland alone, the Enlarged Group will hold the second largest acreage position after PGNiG, and will be strategically positioned in Spain to capitalise on large assets that hold both conventional and unconventional potential.

While advancing its shale gas and tight gas projects in Poland, the Enlarged Company will also combine resources to focus on income generative low cost early production opportunities.

Efficient business model with captive services

The Enlarged Group brings together many capabilities including geophysical and geological teams, reservoir/petroleum engineering, planning/permitting, seismic acquisition and processing and drilling expertise.

The Enlarged Group plans to build on the success of San Leon's NovaSeis subsidiary, which has allowed efficient, flexible and fast seismic acquisition across Poland when third party service contractors would have cost more and restrained the ability to complete work programmes.

Efficient and modern seismic acquisition provides a competitive advantage, particularly important in on-shore Europe, where service quality can be challenging and costs can be high.

Farm-out high impact offshore assets

San Leon has built a high impact offshore asset base with the potential for exceptional returns. The Enlarged Company anticipates the farm-out of its Foum Draa and Sidi Moussa licences offshore Morocco, to Cairn Energy plc and Genel Energy plc respectively, will result in two exploration wells being drilled in 2013/2014.

San Leon's exploration team has completed a Pre Stack Depth Migration of its 2011 Albania Durresi Block 3D seismic survey, and is operating a data room to solicit interest from potential partners through November and December 2012. The management of San Leon estimates 1,000 mmboe of prospective resources and plan to partner with a company that will see a well being drilled in late 2013 / early 2014.

Furthermore, San Leon has received expressions of interest in its offshore Ireland blocks, particularly the Benbaun prospect in the North Porcupine basin where newly interpreted 3D seismic data estimates 180 mmbbls of prospective recoverable oil.

Transaction capabilities and portfolio management

The Enlarged Group will conduct a full combined portfolio review where key projects will be prioritised by their near term production potential. Disposals, further mergers or acquisitions, and farm-ins will be a core part of the forward strategy. San Leon has proven transaction skills, having undertaken three public market acquisitions and executed farm-in agreements with a number of leading industry players such as Talisman Energy Inc., Cairn Energy plc and Genel Energy plc. The Enlarged Group will consider farm-out opportunities which provide enhanced validation to the assets of the Enlarged Group as well as providing an important source of funding.

The proposed management of the Enlarged Group will implement a strategy to maximise the value of the existing asset base.  When the Scheme becomes Effective the Enlarged Group is expected to have approximately $50 million of cash and an optional £15 million equity drawdown facility available to fund its ongoing plans. The combination of cash, the equity facility and success in its multiple farm-out activities are expected to fund the planned activities set out in Table A (below)

Table A

2012 Planned Activity

San Leon Licences*         Aurelian Licences**

Country

Licence

Activity

Poland

Nowa Sol*

Complete drilling / testing of Lelchow SL-1 & Czasław SL-1 Wells

 

Gora*

Siciny-2 vertical frac and production test

 

Siekierki**

Farm-out in progress

 

Other

Continue NovaSeis 2D and 3D  seismic acquisition across combined portfolio

Albania

Durresi*

Farm-out in progress

Other

 

 

Continue farm-out of high interest licences

 

2013 Planned Activity

San Leon Licences*         Aurelian Licences**

Country

Licence

Activity

Poland

Nowa Sol*

Dependent on result of Lelchow SL-1 & Czasław SL-1 wells, continue drilling further wells

 

Gdansk West*, Braniewo* & Szczawno*

Carried horizontal well in one of the licences prior to decision to proceed to drilling a further well on each of the three licences. Test existing vertical wells

 

Siekierki**

T3 test & EPF

Farm-out completed

 

Cybinka**

Drill Cybinka-1 Well 

 

Karpaty West**

Up to 3 well program on Karpaty West

 

Other

Continue NovaSeis operated 2D and 3D seismic acquisition across combined portfolio

Romania

Brodina**

Drilling Putna-1 Well

Albania

Durresi*

Complete farm-out and drill first exploration well

Morocco

Foum Draa*

Carried high impact exploration well

 

Sidi Moussa*

Finalise well planning for 2014 carried high impact exploration well

Other

 

 

Continue farm-out of high interest licences

                         

4.         Recommendation

The Aurelian Board has been advised by Greenhill and Oriel. The Aurelian Board, which has been so advised by Greenhill (as the independent advisor for the purposes of the Takeover Code), considers the terms of the Merger to be fair and reasonable. In providing its advice, Greenhill has taken into account the commercial assessments of the Aurelian Board.

Accordingly, the Aurelian Board intends unanimously to recommend that Aurelian Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting which are to be convened to approve the Merger, as the Aurelian Directors have irrevocably undertaken to do in respect of their own personal interests in Aurelian which amount in aggregate to 3,617,595 Aurelian Shares, representing approximately 0.73 per cent. of the existing issued share capital of Aurelian (as described in Appendix III). These irrevocable undertakings do not lapse in the event of a higher competing offer being made for Aurelian.

The San Leon Board has been advised by Fox-Davies Capital. 

5.         Irrevocable undertakings and letter of intent to vote in favour of the Merger

San Leon has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to effect the Merger at the General Meeting (or, in the event that the Merger is implemented by way of Takeover Offer, to accept or procure the acceptance of such offer) from Kulczyk Investments S.A., Toscafund Asset Management LLP and Lord Sainsbury in respect of an aggregate total of 207,866,958 Aurelian Shares representing approximately 42.06 per cent. of the issued ordinary share capital of Aurelian.

The irrevocable undertakings given by each of Toscafund Asset Management LLP and Kulczyk Investments S.A.  will cease to be binding in circumstances where they have provided notice to San Leon that they intend to accept a third party proposal to acquire the entire issued share capital of Aurelian and such proposal:

(i)            represents a substantially improved proposal when compared with the Merger; and

(ii)           a period of ten days has elapsed from the announcement of such third party offer without San Leon having revised the terms of the Merger so that the value of the revised Merger exceeds the value of the proposal by such third party.

The irrevocable undertakings given by Lord Sainsbury will cease to be binding in circumstances where he has provided notice to San Leon that he intends to accept a third party proposal to acquire the entire issued share capital of Aurelian and such proposal:

(i)            represents a substantially improved proposal when compared with the Merger;

(ii)           is recommended by the board of directors of Aurelian; and

(iii)          a period of ten days has elapsed from the announcement of such third party offer without San Leon having revised the terms of the Merger so that the value of the revised Merger exceeds the value of the proposal by such third party.

In addition, a letter of intent has been received from Cheyne Capital Management (UK) LLP in relation to 23,598,420 Aurelian Shares representing approximately 4.77 per cent. of the issued ordinary share capital of Aurelian confirming its current intention to use its reasonable endeavours to persuade the owner of 23,598,420 Aurelian Shares, in relation to which it holds contract for difference, to vote in favour of the Merger.

In aggregate, therefore, irrevocable undertakings and letters of intent to vote in favour of the Scheme at the Court Meeting and the resolutions to effect the Merger at the General Meeting (or to accept or procure the acceptance of any offer in the event that the Merger is implemented by way of Takeover Offer) have been received in respect of a total of 235,082,973 Aurelian Shares, representing approximately 47.56 per cent. of the ordinary share capital of Aurelian in issue.

Further details of these irrevocable undertakings, the irrevocable undertakings referred to in paragraph 4 and the letter of intent are set out in Appendix III of this announcement.

6.         Management and employees

San Leon confirms that, following implementation of the Merger, the existing contractual and statutory employment rights, including in relation to pensions, of all Aurelian Group employees will be fully safe guarded.

Following implementation of the Merger, the Enlarged Company will be led by a management team comprising Oisin Fanning as Executive Chairman, Paul Sullivan as Managing Director and John Buggenhagen as Exploration Director. The Board of the Enlarged Company will also include John Conlin (the current Chairman of Aurelian), John Matthews (the acting Finance Director of Aurelian), Piotr Rozwadowski (a current Non-Executive Director of Aurelian), Ray King (the current Company Secretary of San Leon), Con Casey (a current Non-Executive Director of San Leon), Daniel Martin (a current Non-Executive Director of San Leon) and Dr. Jeremy Boak (a current Non-Executive Director of San Leon). Upon the Scheme becoming Effective each of Rowen Bainbridge, John Smallwood, David Prior, Dariusz Mioduski and David Walker have agreed to step down as Directors of Aurelian.

7.         Information on the San Leon Group

San Leon is a specialist oil and gas company with an extensive portfolio of assets across Europe and North Africa.  San Leon has built the largest unconventional acreage position in Europe and has balanced its portfolio by obtaining conventional exploration licences that offer near term revenue and/or the potential for high impact value creation.

San Leon achieved this position through an innovative and dynamic business strategy where it has used its technical and commercial abilities to take advantage of market opportunities.

San Leon is dedicated to building long-term reserves and creating sustainable significant shareholder value.

San Leon already manages substantial oil and gas projects in Poland, Albania, Morocco, Spain, Ireland, France, Italy and Germany.

8.         Information on the Aurelian Group

Aurelian is a European focused exploration and appraisal company engaged in evaluation, exploration, appraisal and development of onshore hydrocarbon resources and the application of proven technologies to underexplored hydrocarbon systems.

Aurelian has acquired joint venture interests in onshore licences in Poland, Slovakia, Romania and Bulgaria. Aurelian's licences lie in mature petroleum producing provinces in Central Europe. Aurelian has focussed on exploration and appraisal activities in two core areas. The first core area is in the southern Permian Basin and the second core area is in the Carpathian thrust belt. The two core areas are separate, and each has its own distinctive geology, giving diversity to the play types within the portfolio. Many of the licences have seen extensive past activity, but nonetheless they have remaining exploration potential. Much of the potential for the company is reflected in licences which have as yet had little modern exploration, but which are in existing play fairways that offer tested potential. Aurelian holds interests in 29 hydrocarbon licences and out of these 24 are located in Poland. More than 95 per cent. of the contingent resource value of Aurelian is in the Siekierki tight gas field which is found in the Poznan North and Poznan East Blocks in Poland.

Historically, many of Aurelian's licences have seen previous exploration and production activity, including seismic acquisition, exploration and appraisal drilling, and in some cases commercial production. During the Soviet era, the technologies and methods often achieved poor results in well and structural evaluation. Although many of the licences contain discoveries, significant further appraisal is needed. The technologies currently applied by Aurelian include modern 2D seismic, 3D seismic and the drilling of MFHWs.

9.         Aurelian Share Schemes

Participants in the Aurelian Share Schemes will be contacted regarding the effect of the Merger on their rights under the Aurelian Share Schemes and appropriate proposals will be made to such participants in accordance with the relevant plan rules. Further details of the terms of such proposals will be provided in due course to participants in the Aurelian Share Schemes in accordance with the Aurelian Employee Incentives Agreement (as summarised in paragraph 14 below).

10.       Termination of Relationship and Area of Mutual Interest Agreement with Kulczyk Investments S.A.

On 11 November 2012, Aurelian terminated its Relationship and Area of Mutual Interest Agreement with Kulczyk Investments S.A. Following the completion of the Merger, San Leon intends to negotiate a new arrangement with Kulczyk Investments S.A. in this regard.

11.       Structure of the Merger

It is intended that the Merger will be implemented by means of a court-sanctioned scheme of arrangement of Aurelian under Part 26 of the Companies Act (including the Reduction of Capital under section 641 of the Companies Act).

The purpose of the Scheme is to provide for San Leon to become the owner of the entire issued and to be issued share capital of Aurelian. In order to achieve this, the Scheme Shares will be cancelled and the reserve arising from such cancellation will be used to pay up in full such number of new Aurelian Shares as is equal to the number of Scheme Shares so cancelled and to issue those new Aurelian Shares to San Leon (and/or its nominee(s)). In consideration for this, the Scheme Shareholders will receive New San Leon Shares on the basis set out in paragraph 2 of this announcement. The cancellation of those Scheme Shares and the subsequent issue of the new Aurelian Shares to San Leon will result in Aurelian becoming a wholly owned subsidiary of San Leon.

The Scheme requires approval by Aurelian Shareholders by the passing of a resolution at the Court Meeting. This resolution must be approved by a majority in number of the holders of Aurelian Shares present and voting, either in person or by proxy, representing not less than three-fourths in value of the Aurelian Shares held by such holders. In addition, the implementation of the Scheme requires approval by the passing of a special resolution at the General Meeting to be held immediately after the Court Meeting.

The Scheme and the associated Reduction of Capital must also be sanctioned by the Court. All Aurelian Shareholders are entitled to attend the Court Hearing in person or through counsel to support or oppose the sanctioning of the Scheme. The Scheme and Reduction of Capital will only become Effective upon delivery to the Registrar of Companies of a copy of the Court Order and the Statement of Capital (and, if the Court so orders, upon registration by him of the Court Order and Statement of Capital).

The Scheme is also subject to certain Conditions and certain further terms referred to in Appendix I of this announcement and to be set out in the Scheme Circular. 

San Leon reserves the right to switch from implementing the Merger by means of a scheme of arrangement under Part 26 of the Companies Act to a Takeover Offer, in accordance with paragraph 8 of Appendix 7 of the Code, with the consent of the Panel. 

Once the Scheme becomes Effective, it will be binding on all Scheme Shareholders, whether or not they voted at the Court Meeting and the General Meeting and, if they did vote, whether or not they voted in favour of or against the resolutions proposed at those meetings.

12.       De-listing and re-registration

It is intended that dealings in Aurelian Shares will be suspended at the Scheme Record Time and that no transfers of Aurelian Shares will be registered after that time.

Application will be made to the London Stock Exchange for the cancellation of admission to trading of the Aurelian Shares to AIM upon or shortly after the Scheme becoming Effective. When the Scheme becomes Effective, the Scheme Shares will be cancelled. At that point the share certificates in respect of Aurelian Shares will cease to be valid and entitlements to Aurelian Shares held in CREST will be cancelled.

It is intended that Aurelian will be re-registered as a private company with effect from the Scheme becoming Effective.

13.       Settlement, listing and dealing of New San Leon Shares

Once the Scheme has become Effective, New San Leon Shares will be allotted to former Aurelian Shareholders.

It is intended that applications will be made to AIM of the London Stock Exchange for the New San Leon Shares to be admitted to trading on AIM. It is expected that admission of the New San Leon Shares to AIM will become effective, and that dealings for normal settlement in the New San Leon Shares will commence, at 8.00 a.m. on the Business Day after the date on which the Scheme becomes Effective.

The existing San Leon Shares are admitted to CREST. It is expected that all of the New San Leon Shares, when issued and fully paid, will be capable of being held and transferred by means of CREST. It is expected that the New San Leon Shares will trade under ISIN IE00B3CLK236.

Further details on listing, dealing and settlement will be included in the Scheme Circular.

14.       Offer-related arrangements

Aurelian and San Leon have entered into a mutual confidentiality agreement under which:

·                 each party undertook to keep confidential information relating to the other party and not to disclose it to third parties (other than to permitted projects) unless required by law or regulation for a period of two years from the date of the agreement;

·                 San Leon undertook not to acquire any interest in Aurelian Shares for a period of 12 months from the date of the agreement without the consent of the Aurelian Board; and

·                 the parties undertook, for a period expiring six months after negotiations between the parties have terminated, not to solicit the employees of the other party.

Aurelian and San Leon have entered into an agreement (the "Aurelian Employee Incentives Agreement") under which:

·                 holders of existing options over Aurelian Shares will rollover their options into replacement options in San Leon Shares. Each replacement option will be over 1.3 San Leon Shares for each Aurelian Share, and the aggregate exercise price for each replacement option will be equal to the aggregate exercise price relating to the existing option;

·                 holders of interests in Aurelian Shares under certain part-ownership arrangements will waive and transfer all rights under such arrangements to the trustee of Aurelian's employee benefit trust (the "Trustee"). In consideration, the Trustee will waive any obligation of the holders of these interests to make a payment in relation to the acquisition of the interests.  To the extent that such waiver gives rise to employment tax and national insurance liabilities (or the overseas equivalent), Aurelian will make (on a fully grossed up basis) an additional payment so that such liabilities are met by Aurelian on behalf of the individuals;

·                 San Leon will grant options over San Leon Shares to employees of Aurelian relating to annual and joiner share bonuses which Aurelian should have granted (but could not grant due to regulatory constraints) in respect of the 2011 and 2012 financial years;

·                 Aurelian will pay cash and share option bonuses to eligible employees of Aurelian in respect of the 2012 performance year; and

·                 the Aurelian Employee Incentives Agreement is conditional on obtaining relevant approvals (including from the Panel), prior consent from the Trustee and the Scheme not having been withdrawn or lapsing (save where there is an announcement that the Merger will be implemented by different means).

15.       Enlarged company dividend policy

It is not the intention of the Enlarged Company to make distributions by way of dividend payments for the foreseeable future following the completion of the Merger. The Boards of Aurelian and San Leon consider that it will be in the Enlarged Company's shareholders' best interests to reinvest the profits of the Enlarged Group in business growth opportunities. The Board of the Enlarged Company will regularly review and possibly adjust the dividend policy as the Enlarged Group's asset portfolio and financial position develop over the forthcoming years.

16.       Overseas shareholders

The availability of the New San Leon Shares under the terms of the Merger to persons not resident in the United Kingdom may be affected by the laws and regulations of the relevant jurisdiction. Such persons should inform themselves about and observe any applicable requirements. Further details in relation to overseas shareholders will be contained in the Scheme Circular.

This announcement does not constitute an offer or invitation to purchase any securities.

17.       Disclosure of interests in Aurelian Shares

On the date of this announcement, San Leon will make an Opening Position Disclosure  setting out details of its and the San Leon Directors' interests or short positions in, or rights to subscribe for, any relevant securities of Aurelian and San Leon.

San Leon's Opening Position Disclosure will not include details of all interests or short positions in or rights to subscribe for, any relevant securities of Aurelian or San Leon held by all other persons acting in concert with San Leon. If required, San Leon will make a further opening position disclosure as soon as possible disclosing these details.

On the date of this announcement, Aurelian will make an Opening Position Disclosure setting out details of its, the Aurelian Directors', Greenhill's and Oriel's interests or short positions in, or rights to subscribe for, any relevant securities of Aurelian and San Leon.

Aurelian's Opening Position Disclosure will not include details of all interests or short positions in or rights to subscribe for, any relevant securities of Aurelian or San Leon held by all persons acting in concert with Aurelian. If required, Aurelian will make a further Opening Position Disclosure as soon as possible disclosing these details.

18.       Expected timetable

Further details of the Scheme will be contained in the Scheme Circular which will be sent to Aurelian Shareholders as soon as practicable and in any event within 28 days of this announcement unless otherwise agreed with the Panel.

Further details on the timetable for implementation of the Scheme will be set out in the Scheme Circular, which will also include the notices of the Court Meeting and the General Meeting and specify the necessary actions to be taken by Aurelian Shareholders. It is currently expected that the Scheme Circular will be posted prior to the end of November 2012 and that the Court Meeting and General Meeting will be held prior to the end of the year.

Subject to satisfaction or waiver of the relevant Conditions as set out in Appendix I to this announcement, the Scheme is currently expected to become Effective in early 2013.

19.       Documents available on website

Copies of the following documents will shortly be available at www.sanleonenergy.com until the Scheme has become Effective or has lapsed or been withdrawn:

·                 the irrevocable undertakings referred to in paragraph 4 above and summarised in Appendix III of this announcement;

·                 the irrevocable undertakings and letter of intent referred to in paragraph 5 above and summarised in Appendix III of this announcement;

·                 the Mutual Confidentiality Agreement; and

·                 the Aurelian Employee Incentives Agreement.

20.       General

The Merger will be made subject to the Conditions and on the terms contained in Appendix I to this announcement and on the further terms and Conditions to be set out in the Scheme Circular. The Scheme will be governed by English law and subject to the applicable rules and regulations of the London Stock Exchange, the Panel and the FSA.

The Conditions and certain further terms of the Merger are set out in Appendix I to this announcement. Appendix II contains details of the sources and bases of certain information contained in this announcement. Appendix III contains further details of the irrevocable undertakings to vote in favour of the Merger given to San Leon. Appendix V contains the definitions of certain terms used in this announcement and Appendix VI contains a glossary of acronyms and technical terms used in this announcement.

A conference call for analysts and professional investors will be held at 8.30am today.  Dial in details can be obtained from College Hill - telephone +44 (0)20 7457 2020.

Enquiries:

 

San Leon Energy plc

+353 1291 6292

020 36173913

Oisin Fanning

 

John Buggenhagen

 

Fox-Davies Capital Limited (financial adviser and joint broker to San Leon)

020 3463 5000

Susan Walker

 

Daniel Fox-Davies


Westhouse Securities Limited (nominated adviser to San Leon)

020 7601 6100

Richard Johnson


Antonio Bossi


College Hill (public relations adviser to San Leon)

020 7457 2020

Rupert Trefgarne

 

Alexandra Roper


Plunkett PR (public relations adviser to San Leon in Republic of Ireland)

+353 1 2844414

Sharon Plunkett


Aurelian Oil and Gas plc


Rowen Bainbridge, CEO

020 7629 7986

Greenhill & Co LLP (joint financial and Rule 3 adviser to Aurelian)

020 7198 7400

Mark Bentley

 

Anastasia Fadeeva

 

Oriel Securities Limited (joint financial adviser and broker to Aurelian)

020 7710 7600

David Arch


James Brodie


RFC Ambrian Limited (nominated advisor to Aurelian)

020 3440 6800

Richard Morrison

 

College Hill (public relations adviser to Aurelian)

020 7457 2020

Matthew Tyler

Catherine Wickman


Further information

This announcement is not intended to and does not constitute, or form part of, any offer to sell or subscribe for or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Merger or otherwise, nor shall there be any sale, issuance or transfer of securities of Aurelian and/or San Leon in any jurisdiction in contravention of applicable law. This announcement does not constitute a prospectus or a prospectus equivalent document.

Any vote in respect of the Merger should only be made on the basis of the information contained in the Scheme Circular, which will contain the full terms and conditions of the Merger (including details of how to vote). Aurelian Shareholders are advised to read the Scheme Circular carefully once they have been dispatched.

Please be aware that addresses, electronic addresses and certain other information provided by Aurelian Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Aurelian may be provided to San Leon during the Offer Period as required under Section 4 of Appendix 4 of the Code.

Fox-Davies Capital Limited which is authorised and regulated in the United Kingdom by the FSA, is acting for San Leon as financial adviser in relation to the Merger and is not acting for any other person in relation to such Merger. Fox-Davies Capital Limited will not be responsible to anyone other than San Leon for providing the protections afforded to clients of Fox-Davies Capital Limited or for providing advice in relation to this announcement or any other matter referred to herein.

Greenhill & Co. International LLP which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Aurelian and no-one else in connection with the Merger and will not be responsible to anyone other than Aurelian for providing the protections afforded to clients of Greenhill & Co. International LLP nor for providing advice in relation to the Merger or any other matter referred to herein.

Oriel Securities Limited which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Aurelian and no-one else in connection with the Merger and will not be responsible to anyone other than Aurelian for providing the protections afforded to clients of Oriel Securities Limited nor for providing advice in relation to the Merger or any other matter referred to herein.

Overseas jurisdictions

The availability of New San Leon Shares in, and the release, publication or distribution of this announcement in or into, jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes who are not resident in the United Kingdom should inform themselves about, and observe any applicable restrictions. Aurelian Shareholders who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement has been prepared for the purposes of complying with English law, the Takeover Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Notes to US investors

Shareholders in the United States should note that the acquisition of Aurelian by San Leon relates to the shares of a "foreign private issuer" as defined under Rule 3b-4 under the US Securities Exchange Act of 1934, as amended (the "Exchange Act") and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, English law. Neither the proxy solicitation nor the tender offer rules under the Exchange Act will apply to the Scheme. Moreover, the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. Financial information included in this announcement has been or will be prepared in accordance with accounting standards applicable in the UK and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

Aurelian is organised under the laws of England and San Leon is organised under the laws of Ireland. To the extent that Aurelian's and San Leon's officers and directors are residents of countries other than the United States it may not be possible to effect service of process on Aurelian, San Leon, or their respective officers or directors in a non-US court for violations of US securities laws. It may be difficult to compel Aurelian, San Leon, their respective affiliates, and/or the respective officers or directors of each, to subject themselves to the jurisdiction and judgment of any US court.

The New San Leon Shares to be issued pursuant to the Scheme have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under the relevant securities laws of any state or territory or other jurisdiction of the United States. Accordingly, the New San Leon Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States, or to or for the account or benefit of any US Person, absent registration under the US Securities Act or an exemption therefrom. The New San Leon Shares are expected to be offered in the United States, if at all, in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. None of the securities referred to in this document have been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the United States. This document does not constitute an offer to sell, or the solicitation of any offer to buy, any New San Leon Shares in any jurisdiction in which such an offer or solicitation would be unlawful.

The New San Leon Shares to be issued pursuant to the Scheme have not been and will not be registered under the relevant securities laws of Japan and the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada or Australia. Accordingly, the New San Leon Shares are not being, and may not be, offered, sold, resold, delivered or distributed, directly or indirectly in or into Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of relevant laws of, or require registration thereof in, such jurisdiction (except pursuant to an exemption, if available, from any applicable registration requirements or otherwise in compliance with all applicable laws). No prospectus in relation to the New San Leon Shares has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of Aurelian or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) Aurelian and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of Aurelian or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of Aurelian or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of Aurelian or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) Aurelian and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of Aurelian or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by Aurelian and by any offeror and Dealing Disclosures must also be made by Aurelian, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Please be aware that addresses, electronic addresses and certain other information provided by Aurelian Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Aurelian may be provided to San Leon during the Offer Period as required under Section 4 of Appendix 4 of the Code.

This announcement contains certain forward-looking statements, including statements regarding San Leon's and Aurelian's plans, objectives and expected performance. Such statements relate to events and depend on circumstances that will occur in the future and are subject to risks, uncertainties and assumptions. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, among others the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the energy industry; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. These forward-looking statements speak only as at the date of this document.

Qualified Persons

The technical information and opinions contained in this announcement relating to Aurelian have been reviewed by Dr John Smallwood BA (Cantab), MA, PhD (Cantab), FGS, C.Geol, Aurelian's Exploration Director who has 18 years of post-graduate experience in geoscience research, oil exploration and production. He has reviewed and consented to the inclusion herein of such technical information and opinions.

The technical information and opinions contained in this announcement relating to San Leon have been reviewed by Dr John Buggenhagen who has over 15 years experience in the oil and gas industry. Dr Buggenhagen has a Ph. D. And M.Sc. in Geophysics from the University of Wyoming and a B.Sc. in Geophysics from the University of Arizona. He is currently the Director of Exploration for San Leon and based in San Leon's Warsaw office in Poland and has reviewed and consented to the inclusion herein of such technical information and opinions.

Rule 2.10 requirement

In accordance with Rule 2.10 of the Code, San Leon confirms that as at the date of this announcement, it has in issue and admitted to trading on AIM, 1,144,004,250 ordinary shares of €0.05 each (excluding any ordinary shares held in treasury). The International Securities Identification Number ("ISIN") of the San Leon Shares is IE00B3CLK236.

Publication of this announcement

A copy of this announcement will be available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on www.sanleonenergy.com and www.aurelianoil.com.

The contents of San Leon's website and Aurelian's website are not incorporated into and do not form part of this announcement.



 

 

 

Appendix I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE MERGER

 

Part 1 Conditions of the Merger

1.         The Scheme will be conditional on:

(a)           its approval by a majority in number of the holders of Aurelian Shares present, entitled to vote and voting at the Court Meeting, or at any adjournment thereof, either in person or by proxy, representing not less than three-quarters in value of the Aurelian Shares held by such holders;

(b)           the special resolution required to approve and implement the Scheme (including, without limitation, to amend Aurelian's articles of association) being duly passed by the requisite majority of the Aurelian Shareholders at the General Meeting, or at any adjournment thereof;

(c)           the sanction of the Scheme and confirmation of the reduction of capital involved therein by the Court (in both cases with or without modifications, on terms reasonably acceptable to Aurelian and San Leon);

(d)           office copies of the Court Order (and the Statement of Capital) being delivered for registration to the Registrar of Companies and, if the Court so orders, the registration of the Court Order and Statement of Capital by him; and

(e)           the Scheme becoming unconditional and becoming Effective by no later than the Long-Stop Date.

2.         The Merger is also conditional on the following conditions having been satisfied or, where applicable, waived and accordingly the necessary actions to make the Scheme Effective will not be taken unless such conditions have been so satisfied or waived:

(a)           the London Stock Exchange having acknowledged to San Leon or its agent (and such acknowledgement not having been withdrawn) that the New San Leon Shares will be admitted to trading on AIM;

(b)           no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body, authority, court, trade agency, association, institution, environmental body or any other person or body in any jurisdiction (each a "Relevant Authority") having decided to take, instituted, implemented or threatened any action, proceedings, suit, investigation, enquiry or reference, or made, proposed or enacted any statute, regulation, order or decision or taken any other steps and there not continuing to be outstanding any statute, regulation, order or decision, which would or might:

(i)         make the Merger or the acquisition of any Aurelian Shares, or control of Aurelian by San Leon void, illegal or unenforceable or otherwise materially restrict, restrain, prohibit, delay or interfere with the implementation thereof, or impose material additional conditions or obligations with respect thereto, or require material amendment thereof or otherwise challenge or interfere therewith;

(ii)        require or prevent the divestiture by any member of the Aurelian Group or any company of which 20 per cent. or more of the voting capital is held by any member of the Aurelian Group or any partnership, joint venture, firm or company in which any member of the Aurelian Group may be interested (the "wider Aurelian Group") or by any member of the San Leon Group or any associated undertaking or any company of which 20 per cent. or more of the voting capital is held by the San Leon Group or any partnership, joint venture, firm or company in which any member of the San Leon Group may be interested (the "wider San Leon Group") of all or a material portion of their respective businesses, assets or property or impose any material limitation on the ability of any of them to conduct their respective businesses or own any of their material assets or property;

(iii)        impose any limitation on or result in a delay in the ability of any member of the wider Aurelian Group or the wider San Leon Group to acquire or to hold or to exercise effectively any rights of ownership of shares or loans or securities convertible into shares in any member of the wider Aurelian Group or of the wider San Leon Group held or owned by it or to exercise management control over any member of the wider Aurelian Group or of the wider San Leon Group to an extent which is material in the context of the Aurelian Group taken as a whole or, as the case may be, the San Leon Group taken as a whole;

(iv)        require any member of the wider San Leon Group or the wider Aurelian Group to acquire or offer to acquire any shares or other securities in any member of the wider Aurelian Group where such acquisition would be material in the context of the Aurelian Group taken as a whole; or

(v)         otherwise materially and adversely affect the assets, business, profits or prospects of any member of the wider San Leon Group or of any member of the wider Aurelian Group;

and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference having expired, lapsed or been terminated;

(c)           all necessary notifications and filings having been made, all applicable waiting periods (including any extensions thereof) under any applicable legislation or regulations of any jurisdiction having expired, lapsed or been terminated, in each case in respect of the Merger and the acquisition of any Aurelian Shares, or of control of Aurelian, by San Leon, and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals ("Authorisations") necessary or appropriate in any jurisdiction for, or in respect of, the Merger and the proposed acquisition of any Aurelian Shares, or of control of Aurelian, by San Leon and to carry on the business of any member of the wider San Leon Group or of the wider Aurelian Group having been obtained, in terms and in a form satisfactory to San Leon, from all appropriate Relevant Authorities and from any persons or bodies with whom any member of the wider San Leon Group or the wider Aurelian Group has entered into contractual arrangements and all such Authorisations remaining in full force and effect at the time at which the Merger becomes Effective and San Leon having no knowledge of an intention or proposal to revoke, suspend or modify or not to renew any of the same and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

(d)           except as publicly announced by Aurelian prior to the date hereof (by the delivery of an announcement to a Regulatory Information Service), there being no provision of any arrangement, agreement, licence, permit or other instrument to which any member of the wider Aurelian Group is a party or by or to which any such member or any of their assets is or may be bound, entitled or be subject to and which, in consequence of the Merger, the acquisition or proposed acquisition of any Aurelian Shares, or control of Aurelian, by San Leon or issuance or proposed issuance of New San Leon Shares to Scheme Shareholders or otherwise, would or might, to an extent which is material in the context of the Aurelian Group taken as a whole, result in:

(i)         any monies borrowed by, or other indebtedness actual or contingent of, any such member of the wider Aurelian Group being or becoming repayable or being capable of being declared immediately or prior to its or their stated maturity or the ability of any such member to borrow monies or incur any indebtedness being inhibited or becoming capable of being withdrawn;

(ii)        the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the wider Aurelian Group or any such security (whenever arising or having arisen) being enforced or becoming enforceable;

(iii)        any such arrangement, agreement, licence or instrument of any member of the wider Aurelian Group being terminated or adversely modified or any action being taken of an adverse nature or any obligation or liability arising thereunder;

(iv)        any assets of any member of the wider Aurelian Group being disposed of or charged, or right arising under which any such asset could be required to be disposed of or charged, other than in the ordinary course of business;

(v)         the interest or business of any member of the wider Aurelian Group in or with any firm or body or person, or any agreements or arrangements relating to such interest or business, being terminated or adversely modified or affected;

(vi)        any member of the wider Aurelian Group ceasing to be able to carry on business under any name under which it presently does so;

(vii)       the creation of liabilities (actual or contingent) by any member of the wider Aurelian Group; or

(viii)      the financial or trading position of any member of the wider Aurelian Group being prejudiced or adversely affected;

(e)           except as publicly announced by Aurelian prior to the date hereof (by the delivery of an announcement to a Regulatory Information Service), no member of the wider Aurelian Group having, since 31 December 2011:

(i)         issued, agreed to issue or proposed the issue of additional shares or securities of any class, or securities convertible into, or exchangeable for or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities (save as between Aurelian and wholly-owned subsidiaries of Aurelian and save for options granted, and for any Aurelian Shares allotted upon exercise of options granted under the Aurelian Share Schemes before the date hereof), or redeemed, purchased or reduced any part of its share capital;

(ii)        sold or transferred or agreed to sell or transfer any Treasury Shares;

(iii)        recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution other than to Aurelian or a wholly-owned subsidiary of Aurelian;

(iv)        agreed, authorised, proposed or announced its intention to propose any merger or demerger or acquisition or disposal of assets or shares which are material in the context of the Aurelian Group taken as a whole (other than in the ordinary course of trading) or to any material change in its share or loan capital;

(v)         issued, authorised or proposed the issue of any debentures or incurred any indebtedness or contingent liability which is material in the context of the Aurelian Group taken as a whole;

(vi)        acquired or disposed of or transferred, mortgaged or encumbered any asset or any right, title or interest in any asset (other than in the ordinary course of trading) in a manner which is material in the context of the Aurelian Group taken as a whole;

(vii)       entered into or varied or announced its intention to enter into or vary any contract, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is of a long-term or unusual nature or involves or could involve an obligation of a nature or magnitude, and in either case which is material in the context of the Aurelian Group taken as a whole;

(viii)      entered into or proposed or announced its intention to enter into any reconstruction, amalgamation, transaction or arrangement (otherwise than in the ordinary course of business) which is material in the context of the Aurelian Group taken as a whole;

(ix)       taken any action nor having had any steps taken or legal proceedings started or threatened against it for its winding-up, dissolution, striking-off or for it to enter into any arrangement or composition for the benefit of its creditors, or for the appointment of a receiver, administrator, trustee or similar officer if it or any of its assets (or any analogous proceedings or appointment in any overseas jurisdiction);

(x)        been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(xi)       entered into or varied or made any offer to enter into or vary the terms of any service agreement or arrangement with any of the directors of Aurelian;

(xii)       waived, compromised or settled any claim which is material in the context of the wider Aurelian Group taken as a whole; or

(xiii)      entered into or made an offer (which remains open for acceptance) to enter into any agreement, arrangement or commitment or passed any resolution with respect to any of the transactions or events referred to in this paragraph (e);

(f)            since 31 December 2011, except as publicly announced by Aurelian prior to the date hereof (by the delivery of an announcement to a Regulatory Information Service):

(i)         there having been no adverse change in the business, assets, financial or trading position or profits or prospects of any member of the wider Aurelian Group which in any such case is material in the context of the Aurelian Group taken as a whole;

(ii)        no litigation, arbitration proceedings, prosecution or other legal proceedings having been instituted, announced or threatened by or against or remaining outstanding against any member of the wider Aurelian Group and no enquiry or investigation by or complaint or reference to any Relevant Authority against or in respect of any member of the wider Aurelian Group having been threatened, announced or instituted or remaining outstanding which in any such case could have a material affect on that member of the Aurelian Group; and

(iii)        no contingent or other liability having arisen or been incurred which might reasonably be expected to adversely affect any member of the Aurelian Group in a manner which is material in the context of the wider Aurelian Group;

(g)           San Leon not having discovered that, save as publicly announced by Aurelian prior to the date hereof (by the delivery of an announcement to a Regulatory Information Service):

(i)         the financial, business or other information concerning the wider Aurelian Group which has been disclosed at any time by or on behalf of any member of the wider Aurelian Group whether publicly (by the delivery of an announcement to a Regulatory Information Service) or to San Leon or its professional advisers, either contains a material misrepresentation of fact or omits to state a fact necessary to make the information contained therein not materially misleading; or

(ii)        any member of the wider Aurelian Group is subject to any liability, contingent or otherwise, which is not disclosed in the annual report and accounts of Aurelian for the financial year ended 31 December 2011 or in the interim report of Aurelian for the six months to 30 June 2012 and which is material in the context of the Aurelian Group taken as a whole;

(iii)        any past or present member of the wider Aurelian Group has not complied with all applicable legislation or regulations of any jurisdiction or any notice or requirement of any Relevant Authority with regard to the storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health which non-compliance would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the wider Aurelian Group;

(iv)        there has been a disposal, spillage, emission, discharge or leak of waste or hazardous substance or any substance likely to impair the environment or harm human health on, or from, any land or other asset now or previously owned, occupied or made use of by any past or present member of the wider Aurelian Group, or in which any such member may now or previously have had an interest, which would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the wider Aurelian Group;

(v)         there is or is likely to be any obligation or liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the wider Aurelian Group or in which any such member may now or previously have had an interest under any environmental legislation or regulation or notice, circular or order of any Relevant Authority in any jurisdiction; or

(vi)        circumstances exist whereby a person or class of persons would be likely to have any claim or claims in respect of any product or process of manufacture, or materials used therein, now or previously manufactured, sold or carried out by any past or present member of the wider Aurelian Group which claim or claims would be likely to affect adversely any member of the wider Aurelian Group.

Conditions 2(b) to (g) inclusive must be fulfilled, be determined by San Leon to be or remain satisfied or (if capable of waiver) be waived by San Leon by 11.59 p.m. on the date immediately preceding the Court Hearing, failing which the Scheme shall lapse. 

To the extent permitted by law and subject to the requirements of the Panel, San Leon reserves the right to waive all or any of Conditions 2(b) to (g), in whole or in part. San Leon shall be under no obligation to waive or treat as fulfilled any of Conditions 2(b) to (g), by a date earlier than the Long-Stop Date notwithstanding that the other Conditions of the Merger may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

Save with the consent of the Panel, the Scheme will not proceed if either the European Commission either initiates proceedings under Article 6(1)(c) of Council Regulation (EEC) 4064/89 (the "Regulation") or makes a referral to a competent authority of the United Kingdom under Article 9(1) of the Regulation and there is then a reference to the Competition Commission or there is a reference to the Competition Commission before the date of the Court Meeting. In such event neither Aurelian, San Leon nor any Aurelian Shareholder will be bound by any term of the Scheme.

 

Part 2 Certain further terms of the Merger

1.         If San Leon is required by the Panel to make an offer for Aurelian Shares under the provisions of Rule 9 of the Code, San Leon may make such alterations to any of the above conditions as are necessary to comply with the provisions of that Rule.

2.         The Scheme and the Merger and any dispute or claim arising out of, or in connection with, them (whether contractual or non-contractual in nature) will be governed by English law and will be subject to the jurisdiction of the Courts of England.

3.         Save to the extent cancelled pursuant to the Scheme, the Aurelian Shares will be acquired under the Merger fully paid and free from all liens, charges and encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights attaching thereto, including the right to receive and retain all dividends and other distributions declared, paid or made after the date hereof.

4.         The availability of the New San Leon Shares to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

5.         The New San Leon Shares to be issued under the Scheme will be issued credited as fully paid and will rank in full for all dividends and other distributions, if any, declared, made or paid after the date hereof and otherwise shall rank pari passu with the issued ordinary shares in San Leon.

6.         Fractions of New San Leon Shares will not be allotted or issued to Scheme Shareholders but the entitlements of Scheme Shareholders will be rounded up or down (with 0.5 being rounded up) to the nearest whole number of San Leon Shares.

7.         San Leon reserves the right to switch from implementing the Merger by means of a scheme of arrangement under Part 26 of the Companies Act to a Takeover Offer, in accordance with paragraph 8 of Appendix 7 of the Code, with the consent of the Panel.  



 

Appendix II

sources and bases

 

1.   The value placed by the Merger on the issued share capital of Aurelian is based upon there being 494,253,584 Aurelian Shares in issue on 9 November 2012, being the Business Day prior to the date of this announcement.

2.   Unless otherwise stated, the market prices of the San Leon Shares and the Aurelian Shares have been derived from the AIM appendix to the Daily Official List and are the closing middle market quotations on that date.

3.   The approximate percentages that existing Aurelian Shareholders and existing San Leon Shareholders are expected to hold in the Enlarged Company have been calculated based on:

a.   there being 494,253,584 Aurelian Shares in issue;

b.   Aurelian Shareholders receiving, in aggregate, 642,529,659 New San Leon Shares based on the exchange ratio of 1.3 New San Leon Shares for each Aurelian Share held;

c.   the issued share capital of San Leon comprising of:

i. 1,144,004,250 San Leon Shares in issue;

ii. a further 10,462,299 San Leon Shares currently expected to be issued in order to satisfy future requests by holders of certain exchangeable shares which were issued in connection with San Leon's recent acquisition of Realm Energy International Corporation and which are exchangeable for San Leon Shares; and

iii.  a further 85,425,654 San Leon Shares, currently expected to be issued in connection with San Leon's recent acquisition of certain Polish assets from Hutton Energy in June 2012; and

d.               no new shares being issued in respect of existing options over San Leon Shares or Aurelian Shares.

4.   Unless otherwise stated, the resources information on Aurelian is extracted (without material adjustment) from the Competent Person's Report dated May 2012 (the "RPS CPR") available on Aurelian's website. The P50 prospective resources numbers taken from this report assume success in all intervals, segments and prospects.



 

5.   Unless otherwise stated, the resources information on San Leon is based upon internal review and is estimated based upon the inventory for both conventional and unconventional prospects.  The estimates assume 100% success and that all prospects will be drilled.  Estimates are based on only those prospects or leads that San Leon is actively evaluating.

Appendix III

IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT

Aurelian Directors

All of the Aurelian Directors who have personal interests in Aurelian Shares have given irrevocable undertakings to vote or procure the vote in favour of the Merger (or, if implemented by way of Takeover Offer, accept or procure the acceptance of such offer) as follows:

Name

Number of Aurelian Shares

% of issued share capital of Aurelian

John Conlin

100,000

0.02

Rowen Bainbridge

439,647

0.09

John Matthews

25,000

0.01

David Prior

2,931,345

0.59

David Walker

121,603

0.02

In addition the Aurelian Directors have agreed that the undertaking to vote in favour of the Scheme at the Court Meeting and the resolutions at the General Meeting will extend to Aurelian Shares issued to them before the meetings on the exercise of certain options.

The undertakings given by the Aurelian Directors only cease to be binding if San Leon announces, with the consent of the Panel, that it does not intend to proceed with the Merger and no new, revised or replacement offer is announced by San Leon in accordance with Rule 2.7 of the Code at the same time or in circumstances where a condition to the Scheme is invoked or it fails to become effective by the Long-Stop Date and no new, revised or replacement offer or Scheme has been announced in its place within 5 Business Days of such date.

San Leon has not received irrevocable undertakings from: (1) Radwan Investments GmbH, a wholly owned subsidiary of Radwan Privatstiftung, an Austrian private foundation whose class of beneficiaries includes the infant children of Dariusz Mioduski (a current Director of Aurelian), which holds an interest in 4,914,193 Aurelian Shares representing 0.99 per cent. of the total number of Aurelian Shares in issue; or (2) Manoj Madnani, an alternate Director of Aurelian, who holds an interest in 145,924 Aurelian Shares representing 0.03 per cent. of the Aurelian Shares in issue.

 



 

 

Institutional Irrevocable Undertakings

Certain Aurelian Shareholders have given irrevocable undertakings to vote or procure the vote in favour of the Merger (or, if implemented by way of Takeover Offer, accept or procure the acceptance of such offer) as follows:

Name

Number of Aurelian Shares

% of issued share capital of Aurelian

Toscafund Asset Management LLP

117,830,871

23.84

Kulczyk Investments S.A.

68,055,728

13.77

Lord Sainsbury

21,980,359

4.45

The irrevocable undertakings given by each of Toscafund Asset Management LLP and Kulczyk Investments S.A. will cease to be binding in circumstances where they have provided notice to San Leon that they intend to accept a third party proposal to acquire the entire issued share capital of Aurelian and such proposal:

(i)            represents a substantially improved proposal when compared with the Merger; and

(ii)           a period of ten days has elapsed from the announcement of such third party offer without San Leon having revised the terms of the Merger so that the value of the revised Merger exceeds the value of the proposal by such third party.

The irrevocable undertaking given by Lord Sainsbury will cease to be binding in circumstances where he has provided notice to San Leon that he intends to accept a third party proposal to acquire the entire issued share capital of Aurelian and such proposal:

(i)            represents a substantially improved proposal when compared with the Merger;

(ii)           is recommended by the board of directors of Aurelian; and

(iii)          a period of ten days has elapsed from the announcement of such third party offer without San Leon having revised the terms of the Merger so that the value of the revised Merger exceeds the value of the proposal by such third party.

Letter of Intent

A letter of intent has been received from Cheyne Capital Management (UK) LLP in relation to the Aurelian Shares set out below.

Name

Number of Aurelian Shares

% of issued share capital of Aurelian

Cheyne Capital Management (UK) LLP

23,598,420

4.77



The letter of intent states Cheyne Capital Management (UK) LLP's current intention to use its reasonable endeavours to persuade the owner of the 23,598,420 Aurelian Shares, in relation to which it holds contracts for difference, to vote in favour of the Merger.



 

 

Appendix IV

 

ESTIMATED RESOURCES

 

Estimated Contingent and Prospective Resources

 

Net

Unrisked

 

 

 mmboe

Poland

Conventional

            180

 

Unconventional

 

          6,700

 

Morocco 

Conventional

1,066

  

Unconventional

        11,667

 

 

 

Albania

 

Ireland

 

Romania

 

Slovakia

Conventional

 

Conventional

 

Conventional

 

Conventional

1,000

 

1,333

 

7

 

6

 

San Leon prospective resources are based upon internal review and are estimated based upon the inventory for both conventional and unconventional prospects. The estimates assume 100% success and that all prospects will be drilled.  Estimates are based on only those prospects/leads that the company is actively evaluating.

 

Aurelian net unrisked resources are extracted from the RPS CPR  taking stochastic totals using P50 contingent and prospective resources assuming at success in all intervals, segments and prospects.

 



 

Appendix V

DEFINITIONS

The following definitions apply throughout this document unless the context requires otherwise:

"AIM"

the AIM market operated by the London Stock Exchange

"AIM Rules"

the rules applicable to AIM as published by the London Stock Exchange from time to time

"Aurelian"

Aurelian Oil & Gas plc, a public limited company incorporated in England with registration number 01685863 and having its registered office at 4 Grosvenor Place, London SW1X 7HJ, England

"Aurelian Directors" or "Aurelian Board"

the board of directors of Aurelian and "Aurelian Director" means any one of them

"Aurelian Group"

Aurelian and its subsidiary undertakings

"Aurelian Shareholders"

holders of Aurelian Shares

"Aurelian Shares"

ordinary shares of 5p each in the capital of Aurelian

"Aurelian Share Schemes"

the Aurelian Unapproved Company Share Option Scheme and the Aurelian Part Ownership arrangements

"Aurelian Employee Incentives Agreement"

the employee incentives agreement entered into between Aurelian and San Leon on 11 November 2012

"Australia"

the Commonwealth of Australia, its states, territories and possessions

"Business Day"

any day (not being a Saturday or Sunday or public holiday) on which banks are open for general banking business in the City of London

"Canada"

Canada, its provinces and territories and all areas subject to its jurisdiction and any political sub-division thereof

"Code"

the City Code on Takeovers and Mergers

"Companies Act"

the Companies Act 2006

"Conditions"

the conditions to the implementation of the Scheme which are set out in Part 1 of Appendix I to this announcement and to be set out in the Scheme Circular

"Court"

Her Majesty's High Court of Justice in England and Wales

"Court Hearing"

the hearing of the Court to sanction the Scheme

"Court Meeting"

the meeting of Aurelian Shareholders to be convened by an order of the Court under the Companies Act, notice of which will be set out in the Scheme Circular, to consider and if thought fit approve the Scheme (with or without amendment) including any adjournment thereof

"Court Order"

the order of the Court sanctioning the Scheme under Part 26 of the Companies Act and confirming the Reduction of Capital and confirming the Reduction of Capital under the Companies Act

"CREST"

the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755)) in respect of which Euroclear UK & Ireland Ltd is the operator

"Daily Official List"

the daily official list of the London Stock Exchange

"Dealing Disclosure"

an announcement pursuant to Rule 8 of the Code containing details of dealings in interests in relevant securities of a party to an offer

"Effective"

the Scheme having become effective pursuant to its terms

"Effective Date"

the date on which the Merger becomes effective

"Enlarged Company"

San Leon following the Effective Date

"Enlarged Group"

the San Leon Group following the Effective Date

"Fox-Davies Capital"

Fox-Davies Capital Limited of 1 Tudor Street, London EC4Y 0AH

"FSA"

means the Financial Services Authority of the United Kingdom

"General Meeting"

the general meeting of Aurelian Shareholders to be convened in connection with the Merger, notice of which will be set out in the Scheme Circular, to consider and if thought fit approve various matters in connection with the implementation of the Scheme, including any adjournment thereof

"Greenhill"

Greenhill & Co. International LLP of Lansdowne House, 57 Berkeley Square, London W1J 6ER

"London Stock Exchange"

London Stock Exchange plc

"Long-Stop Date"

30 June 2013 or such later date (if any) as San Leon and Aurelian may agree and (if required) the Court and the Panel may allow

"Merger"

the proposed acquisition by San Leon of the entire issued and to be issued share capital of Aurelian to be implemented by means of the Scheme

"Merger Ratio"

the ratio of 1.3 New San Leon Shares to every Aurelian Share

"Mutual Confidentiality Agreement"

the mutual confidentiality agreement summarised in paragraph 14 of this announcement

"New San Leon Shares"

the new San Leon Shares, to be allotted in connection with the Scheme

"Offer Period"

the offer period (as defined by the Code) relating to Aurelian which commenced on 1 February 2012

"Opening Position Disclosure"

an announcement pursuant to Rule 8 of the Code containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to an offer

"Oriel"

Oriel Securities Limited of 150 Cheapside, London EC2V 6ET

"Panel" or "Takeover Panel"

the Panel on Takeovers and Mergers

"Reduction of Capital"

the proposed reduction of Aurelian's share capital pursuant to section 641 of the Companies Act provided for in the Scheme by the cancellation of the Scheme Shares

"Registrar of Companies"

the Registrar of Companies in England and Wales

"Regulatory Information Service"

a Regulatory Information Service that is approved by the Financial Services Authority

"Relationship and Area of Mutual Interest Agreement"

the agreement between Aurelian and Kulczyk Investments S.A. entered into on 22 November 2011 providing for co-operation in the upstream sector in Poland, including in relation to opportunities in the oilfield services sector

"RPS CPR"

the competent person's report prepared for Aurelian by RPS Energy Consultants Limited and dated May 2012

"San Leon"

San Leon Energy plc, a public limited company incorporated in the Republic of Ireland with registration number 237825 and having its registered office at First Floor, Wilton Park House,  Wilton Place, Dublin 2,  Republic of Ireland

"San Leon Board"

The board of directors of San Leon

"San Leon Group"

San Leon and its subsidiary undertakings

"San Leon Shares"

ordinary shares of €0.05 each in the capital of San Leon

"Scheme" or "Scheme of Arrangement"

the Scheme of Arrangement proposed to be made under Part 26 of the Companies Act between Aurelian and the holders of the Scheme Shares to be set out in the Scheme Circular, with or subject to any modification, addition or condition approved or imposed by the Court

"Scheme Circular"

the document to be sent to Aurelian Shareholders setting out, amongst other things, the Scheme and notices convening the Court Meeting and the General Meeting

"Scheme Record Time"

6.00pm on the Business Day immediately preceding the date of the Court Hearing

"Scheme Shareholders"

holders of Scheme Shares and a "Scheme Shareholder" shall mean any one of those Scheme Shareholders

"Scheme Shares"

the Aurelian Shares:

(i)         in issue at the date of the Scheme Circular and which remain in issue at the Scheme Record Time;

(ii)         (if any) issued after the date of the Scheme Circular but before the Voting Record Time and which remain in issue at the Scheme Record Time; and

(iii)        (if any) issued at or after the Voting Record Time but at or before the Scheme Record Time on terms that the holder thereof shall be bound by the Scheme or in respect of which the original or any subsequent holders thereof are, or have agreed in writing to be, bound by the Scheme and, in each case, which remain in issue at the Scheme Record Time

excluding, in any case, any Aurelian Shares held by or on behalf of San Leon or the San Leon Group at the Scheme Record Time

"Statement of Capital"

the statement of capital approved by the Court showing the information required by the section 649 of the Companies Act with respect to Aurelian's share capital as altered by the Reduction of Capital

"subsidiary" and "subsidiary undertaking"

have the meanings given to such terms in the Companies Act

"Takeover Offer"

has the meaning given to it in Part 28 of the Companies Act

"Treasury Shares"

shares held as treasury shares as defined in section 724(5) of the Companies Act

"UK" or "United Kingdom"

the United Kingdom of Great Britain and Northern Ireland

"United States" or "US"

the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia, and all other areas subject to its jurisdiction

"Voting Record Time"

the time and date specified in the Scheme Circular by reference to which entitlement to vote at the Court Meeting will be determined, expected to be 6.00pm on the day which is two days before the date of the Court Meeting or if the Court Meeting is adjourned, 6.00pm on the day which is two days before such adjourned meeting

 



 

 

 

 

Appendix V

GLOSSARY OF ACRONYMS AND TECHNICAL TERMS

 

The following acronyms and terms are used in this announcement and an explanation of their meaning is set out below.

Acronyms

 

"MFHW"

Multiple fracture horizontal wells

"PGNiG"

PGNiG S.A. (Polish Oil & Gas Company)

Other technical terms

 

"2D seismic"

two dimensional seismic data covering length and depth of a given geographic surface

 

"3D Seismic"

three dimensional seismic data covering length, breadth and depth of given geographic surface

"contingent resources"

those quantities of hydrocarbons which are estimated, on a given date, to be potentially recoverable from known accumulations, but which are not currently considered to be commercially recoverable. Contingent resources may be of a significant size, but still have constraints to development. These constraints, preventing the booking of reserves, may relate to lack of gas marketing arrangements or to technical, environmental or political barriers

"farm-in"

the acquisition by a party of one or more interests in a production licence, from one or more existing licencees

"farm-out"

the sale of an interest or interest in a production licence by an existing licencee to a third party

"hydrocarbon"

organic compounds comprising carbon and hydrogen, including oil, condensate, gas and gas condensate

"mmbbls"

million barrels of oil

"mmboe"

million barrels of oil equivalent

"play"

an area in which hydrocarbon accumulations or prospects of a given type occur

"prospect"

targeted area in which hydrocarbons are predicted to exist in economic volumes

"prospective resources"

those quantities of hydrocarbons which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations

"seismic"

information derived from a geophysical method which involves generating shock waves by the release of energy at or near the surface and recording the nature of waves returning from the various subsurface rock interfaces

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MERBKBDPABDKFDD

a d v e r t i s e m e n t