Reabold Resources offers to acquire 13.12% additional shares in Corallian Energy Limited

LONDON: Reabold Resources has conditionally offered to acquire additional Corallian Energy Limited shares from existing Corallian shareholders, in exchange for Reabold shares, at a ratio of 474 Reabold shares for 1 Corallian share, potentially increasing Reabold’s shareholding in Corallian to a maximum of 49.99%.

Assuming a full take up of the Offer, Reabold would acquire up to an additional 13.12% of Corallian’s issued share capital from existing shareholders, in addition to its existing 36.87% equity position.

By potentially increasing its position in Corallian, Reabold would be increasing its economic interest in the 100% Corallian-owned Victory Gas Discovery, West of Shetland, in which Reabold management sees significant value.

As previously announced, the Victory Gas Discovery was evaluated to have 157 bcf of 2C contingent resource with an associated NPV of £146 million. Victory is considered by Corallian to be a simple, low-risk gas development which has been fully appraised and requires no additional pre-development drilling.

Victory is located near existing infrastructure, in particular, the Total operated Greater Laggan Area (GLA), with the development of Victory expected to be via a single-well sub-sea tieback.

The licence P2596 (Block 207/1a), which contains Victory, was originally offered to Texaco in 1972 who drilled a discovery well in 1977 that flowed at circa 9 mmscf/d from 200 feet (circa 60.6 metres) of net gas pay in the Lower Cretaceous sandstones, proving reservoir commerciality.

Corallian shareholders may elect to tender up to their entire holding and in excess of their relevant pro rata percentage. However, should aggregate acceptances received be higher than the 13.12% maximum, Corallian shareholders tendering in excess of their pro rata entitlements would be scaled back so as to ensure that all Corallian shareholders have the opportunity to accept their pro rata entitlement to the Offer and so that Reabold’s shareholding in Corallian does not exceed 49.99% of Corallian’s issued share capital.

Accordingly, Reabold would issue a maximum of 468,994,086 Reabold shares assuming a full take up by Corallian shareholders as part of this Offer.

The Offer is conditional upon the satisfaction of certain conditions including, but not limited to, receipt of any necessary regulatory approvals and the passing of a resolution by the shareholders of Corallian. If the conditions are not satisfied by 28 May 2021 (or such later date and time as agreed between Reabold and Corallian), the Offer shall automatically lapse.

There is no minimum acceptance condition under the Offer and therefore Reabold may end up acquiring less than an additional 13.12% of Corallian under the Offer if there is not a full take up of the Offer.

The Offer will remain open for acceptances by Corallian shareholders until 6 May 2021.

Stephen Williams, Co-CEO of Reabold, commented: “We see Victory as not only adding significant value to Reabold, but also as one of the lowest risk development projects offered in the 32nd Round and one of the best remaining undeveloped assets in the UK Continental Shelf. The Victory development is likely to be relatively simple as it can utilise nearby existing infrastructure, in particular that of the Greater Laggan Area operated by Total, and as such offers a fast-tracked timeline to production.”

Reabold Resources plc is an investing company investing in the exploration and production (E&P) sector. The Company’s investing policy is to acquire direct and indirect interests in exploration and producing projects and assets in the natural resources sector, and consideration is currently given to investment opportunities anywhere in the world.

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