Emerald Energy Plc
FOR IMMEDIATE RELEASE 20 October 2006
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA
Emerald Energy Plc (“Emerald” or the “Company”)
Notice of Extraordinary General Meeting
SNG Acquisition Shares
Posting of Interim Results for period ended 30 June 2006
Introduction
Emerald today announces that it is convening an Extraordinary General Meeting to consider a resolution that will replace the Directors’ current authority to allot shares. The reasons for the EGM are explained below.
Background
The growth, achieved by the Group over the past three years, has been funded by a combination of cash flows generated from its operations and funds raised by issuing new Ordinary Shares. The Directors’ ability to issue new Ordinary Shares is governed by the authority granted to them by the Shareholders to allot new Ordinary Shares and the provisions of the Prospectus Rules.
In August 2003, the Company was granted an authority by its shareholders to issue up to 20,000,000 Ordinary Shares. This authority is valid until 15 August 2008. The Directors have not to date sought to extend or renew this authority.
To date, this authority has been reduced by, (i) 5,090,000 Ordinary Shares that were issued in November 2005 to certain institutional investors for cash to partially fund the Company’s investment in Block 26, Syria; and (ii) 6,795,000 Ordinary Shares, over which options have been granted under the Employee Share Scheme.
In addition, the Company will be required to allot 3,500,000 Ordinary Shares to Soyuzneftegas Limited by 17 May 2007, in accordance with the terms of the SNG Acquisition Agreement, dated 14 November 2005. This leaves the Directors with an authority to allot up to 4,615,000 Ordinary Shares.
Since August 2003, options to subscribe for 1,675,000 Ordinary Shares have been exercised or cancelled. As at the date of this announcement, the Company has outstanding options to subscribe for 5,120,000 Ordinary Shares, of which options to subscribe for 2,667,500 Ordinary Shares are vested.
A company listed on the Official List is required by the Prospectus Rules to issue a prospectus if, inter alia, it issues more than ten per cent of its issued share capital in any twelve month period. From 18 November 2006, being the first anniversary of the issue for cash of 5,090,000 Ordinary Shares to institutional investors in November 2005, the Company will be in a position to issue ten per cent of its current issued share capital comprising 5,609,299 Ordinary Shares, without first having to publish a prospectus.
However, taking account of the issue of the SNG Acquisition Shares, the Company will not be able, without first publishing a prospectus, to issue more than 2,109,299 Ordinary Shares between 18 November 2006 and the issue of the SNG Acquisition Shares or more than 2,459,299 Ordinary Shares in the twelve month period following the issue of the SNG Acquisition Shares.
Reasons for the Proposed Resolution
The Directors believe that the Company’s ability to fund new growth opportunities depends on the Directors being able, without delay, to allot Ordinary Shares to either raise funds or as vendor consideration.
In order to provide the Company with this flexibility, the Directors have decided to convene the EGM and publish a prospectus, within the meaning of section 85(2) of FSMA.
The proposed Resolution, if passed, will give the Directors an authority to issue the SNG Acquisition Shares and a further 5,953,300 Ordinary Shares, representing ten per cent of the issued share capital of the Company after allotment of the SNG Acquisition Shares.
The Prospectus, published today, allows the Directors to utilise the authority granted by the Resolution in full, by enabling the Company to apply for all of the Ordinary Shares the Directors are authorised to allot to be admitted to the Official List.
The Directors believe that it is in the best interests of the Company to enable the Directors to allot Ordinary Shares without delay, within a ten per cent limit of the issued share capital, if the circumstances require. In the event of a larger issue of Ordinary Shares, the Company will seek the approval of the Shareholders. The Directors therefore believe that the proposed Resolution is in the best interests of the Company and the Shareholders as a whole.
Extraordinary General Meeting
An Extraordinary General Meeting of the Company is to be held at the Foreign Press Association, 11 Carlton House Terrace, London SW1Y 5AJ at 11 a.m. on 17 November 2006 to consider and, if thought fit, pass the following special resolution:
To authorise the Directors, in substitution of all other authorities, to:
(a) allot 3,500,000 Ordinary Shares pursuant to the SNG Acquisition Agreement; and
(b) offer, allot or deal with up to 5,959,300 Ordinary Shares, representing ten per cent of the enlarged issued share capital of the Company.
If the Resolution is passed, the Directors will have a composite authority to allot up to 16.86 per cent of the issued Ordinary Shares as at the date of this announcement.
The Directors intend to allot the 3,500,000 Ordinary Shares pursuant to the SNG Acquisition Agreement by 17 May 2007. The Directors have no present intention of exercising the remaining authority, which will lapse fifteen months after the Resolution is passed or at the Company’s annual general meeting to be held in 2007.
Further Information
Further information relating to the content of this announcement is contained in a Prospectus dated 20 October 2006 which will shortly be posted to Shareholders and will be made available on the Company's web site (www.emeraldenergy.com) on the Investor Relations page under Investor Publications.
The definitions used in this announcement are as set out in the Company's Prospectus dated 20 October 2006.
Posting of Interim Results to Shareholders
The Company also announces that the interim results for the period ended 30 June 2006 are included as part of the Prospectus dated 20 October 2006 which will shortly be posted to Shareholders.
Enquiries:
Emerald Energy plc: Helen Manning
020 7925 2440
Evolution Securities Limited: Chris Sim / Gina Gibson
020 7071 4300
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