Lansdowne Oil & Gas plc (AIM: LOGP), the North Celtic Sea focused, oil and gas company, is pleased to announce that it has raised £488,000 by way of a placing of 81,333,333 new ordinary shares of 0.1 pence each (the "Placing Shares") with existing investors (the "Placees") at a placing price of 0.6 pence per Placing Share (the "Placing Price") (the "Placing"). Brandon Hill Capital Limited ("BHC") acted as broker.
The proceeds of the Placing will be used to meet the Company's expected share of Barryroe costs and to fund the Company's ongoing working capital requirements until the end of 2020.
BHC and LC Capital Targeted Opportunities Fund, L.P. ("LCCTOF") have both also agreed to convert the outstanding amount of their 2019 loans to the Company, amounting to £155,605.48 (comprising of £150,000 principal and £5,605.48 accrued interest) each, into new ordinary shares at the Placing Price (together the "Loan Conversions").
The Placing and Notable Subscriptions
The Company has raised gross proceeds of £488,000 through the issue of the Placing Shares. The Placing Shares will represent approximately 10.2% per cent of the enlarged share capital of the Company (following the issue of the Placing Shares and the Initial Loan Shares (as defined below)).
Oliver Stansfield and Neal Griffith, both Directors of BHC, the Company's second largest shareholder, have agreed to each subscribe on a pro rata basis to their current shareholdings in the Company, being 3.01% and 3.91% respectively, representing a combined investment of £34,600 for 5,766,667 Placing Shares.
The Placing Shares will rank pari passu with the existing ordinary shares in all respects. Application has been made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence on 20 February 2020 ("Admission").
Tim Torrington, Non-Executive Chairman, intends to subscribe for 2,000,000 new ordinary shares, representing a subscription of £12,000 (the "Director Subscription"), resulting in a total gross fundraise of £500,000. Further details relating to the Director Subscription are expected to be announced shortly.
As previously announced on 25 June 2019, the Company entered into loan agreements with BHC and LCCTOF for, in aggregate, £300,000 (together, the "Shareholder Loans"). Since entering into the agreements, all funds were drawn by the Company under the Shareholder Loans.
BHC and LCCTOF have agreed to convert the amount currently outstanding under the Shareholder Loans into new ordinary shares at the Placing Price. This will result in the issue of 25,934,246 new ordinary shares to each of BHC and LCCTOF. Of these, 49,736,666 new ordinary shares (the "Initial Loan Shares") will be issued under the Company's existing authorities and 2,131,826 new ordinary shares (the "Further Loan Shares") will be subject to shareholder approval.
The Initial Loan Shares will rank pari passu with the existing ordinary shares in all respects. Application has been made for the Initial Loan Shares to be admitted to trading on AIM and dealings are expected to commence on Admission.
Conditional upon the passing of the necessary shareholder resolutions to approve the allotment and issue of the Further Loan Shares, such ordinary shares will rank pari passu with the then existing ordinary shares in all respects and application will be made for admission to trading of such ordinary shares on AIM. A further announcement will be made in due course.
In connection with the Placing and the conversion of the Shareholder Loans, the Company will also grant a total of 137,368,491 warrants, on a one warrant per Placing or Loan Share basis, to subscribe for new ordinary shares in the Company at a price of 1.2 pence per share, with an expiry of 31 December 2020. The issue of these warrants will be subject to shareholder approval and they will be exercisable from the date of such approval. In the event all of the warrants are exercised before their expiry at year end, the Company would receive a further £1.65 million in cash.
Use of Proceeds
The proceeds of the Placing are expected to be sufficient to fund the Company's share of costs on the Barryroe Licence and for on-going working capital requirements to the end of 2020.
Related Party Transactions
BHC and LC Capital & Affiliates, as substantial shareholders of the Company, are considered to be "related parties" as defined under the AIM Rules and accordingly, the Loan Conversions and grant of associated warrants constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules ("Related Party Transaction").
Similarly, given their role as Directors of BHC, the participation of Oliver Stansfield and Neal Griffith in the Placing on a pro rata basis to their existing shareholdings is considered to be a Related Party Transaction.
The Directors independent of the Placing, Loan Conversions and grant of warrants, who for this purpose are Steve Boldy, John Aldersey-Williams and Jeffrey Auld, consider, having consulted with the Company's nominated adviser, SP Angel Corporate Finance LLP, that these transactions are fair and reasonable insofar as the Company's shareholders are concerned.
The Company will call a general meeting (the "General Meeting") to be held on or around 18 March 2020 to approve the issue of the Further Loan Shares and the warrants and a further announcement will be made in relation to matter this in due course.
Total Voting Rights
Following admission of the Placing Shares and the Initial Loan Shares, the Company will have in issue 796,419,845 ordinary shares of 0.1 pence each. No ordinary shares are held in treasury. Therefore, the total number of voting rights in the Company will be 796,419,845.
The above total current voting rights number is the figure which may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA's Disclosure Guidance and Transparency Rules.
Following admission of the Placing Shares and the Initial Loan Shares:
· Brandon Hill Capital Limited and Directors of BHC will be collectively interested in 168,630,644 ordinary shares representing 21.17% of the Company's issued share capital; and
· LC Capital & Affiliates will be interested in 215,336,693 ordinary shares representing 27.04% of the Company's issued share capital.
Further to the intended Director Subscription and subject to shareholder approval at the General Meeting, following admission of the Further Loan Shares:
· BHC will be interested in 169,696,557 ordinary shares representing 21.20% of the Company's issued share capital; and
· LC Capital & Affiliates will be interested in 216,402,606 ordinary shares representing 27.03% of the Company's issued share capital.
Tim Torrington, Non-Executive Chairman of Lansdowne, commented:
"The Placing and Loan Conversions provide funding for the Company to the end of 2020. During this period the Company will continue with its ongoing farm-out campaign on Barryroe, with a number of parties currently active in the data room, and it is the Board's target to complete a farm-out deal within the next six months.
"The Company can also report that in addition to the traditional farm-out discussions, interest is also being shown in the potential to combine a Barryroe development with carbon sequestration, utilising existing infrastructure, which is an exciting concept.
"I would like to thank all our existing shareholders for their support and patience they have shown. The Board remains steadfast in its belief of the significant potential of Barryroe and is focused on unlocking the inherent value within Lansdowne. With existing 2C resources of 69MMboe (and additional exploration potential), the Company is trading at a valuation of less than US$0.08 per contingent resource barrel. Accordingly, we believe there is the scope for a significant re-rating of the Company valuation upon any positive operational developments."