TIDMAOGL
RNS Number : 3138E
Attis Oil and Gas Ltd
05 November 2020
7.00am 5 November 2020
Attis Oil & Gas Limited
("Attis" or "the Company")
Proposed Amalgamation of Attis and Helium One Treasury Ltd
Attis Oil and Gas Limited (AIM:AOGL) is pleased to announce it
has entered into a binding Implementation Agreement with Helium One
Treasury Ltd, a wholly owned subsidiary of Helium One Global
Limited ("Helium One"). The agreement, subject to certain
conditions as set out below, sets out the commercial terms of a
proposed merger by way of an amalgamation under BVI law
("Amalgamation"). Helium One is a private company focussed on
exploration and development of the globally significant Rukwa
Helium Project in Tanzania.
The Amalgamation represents what the Attis Directors believe to
be a potentially transformational and value enhancing transaction
for Attis Shareholders, giving them the opportunity to participate
as investors in a globally unique, large-scale, high-grade, primary
helium project.
Key Points
-- Amalgamation values Attis at GBP1.76m, representing approx.
0.012p for each Attis Ordinary Share of no par value ("Attis
Shares")
-- Helium One valued at GBP6.0m, representing 2.84p for each Helium One share
-- Attis shareholder to be issued 1 Helium One share for every 236 Attis shares
-- Target admission of Helium One to AIM on or around 3 December
2020 subject to minimum fundraise of GBP5m and completion of other
matters as set out below
Investors are advised that material conditions, including
completion of the fundraise to be undertaken in conjunction with
the Admission, publishing a Schedule One Notice under the AIM Rules
and obtaining Attis Shareholder approval for the Amalgamation and
associated cancellation of the Attis Shares on AIM, remain
outstanding and therefore there can be no guarantee that the
Amalgamation will proceed as detailed here.
About Helium One
-- Helium is a vital and irreplaceable element which is used
globally by many industries and is an essential component material
in modern technologies including key growth areas in medical,
technology and aerospace sectors.
-- Helium One has identified a globally unique, large-scale,
high-grade, primary helium project in Tanzania which has strategic
global implications in resolving the supply-constrained helium
market.
-- Rukwa Project is an advanced exploration project with 21
Prospects and 4 Leads based on reprocessed seismic lines, high
resolution gravity survey, and surface seeps of up to 10.5%He.
-- Independently verified (SRK Consulting) 'Best Estimate'
Unrisked Prospective Resource of 138 Bcf (2U/P50) for the Company's
Rukwa Project.
-- Five years of Tanzanian operating experience with drilling planned for Q1/Q2 2020.
The Company currently expects cancellation of the Attis Shares
from trading on AIM pursuant to AIM Rule 41 to become effective at
7.00am on or around 3 December 2020 with Helium One's admission to
AIM that day.
Attis Chairman, Paolo Amoruso, commented: "This potential
transaction is excellent news for the shareholders of Attis. With
helium wholesale prices doubling over the last two years based on
critical under-supply, listed primary helium companies in Canada
and Australia have experienced significant share-price appreciation
over the last 6 months."
Helium One CEO, David Minchin, commented: "We are delighted to
be entering into this transaction with Attis which we hope will
lead to us being able to bring Helium One to the London market. Not
only is Helium One one of the few companies with a globally
significant resource seeking to address the current helium supply
crisis, it could also become the only company on AIM where
investors can get involved with the exciting and expanding helium
space. Helium One plans to pursue an aggressive exploration and
development plan starting with drilling in Q1/Q2 next year."
Further details of the Amalgamation and on Helium One will be
included in the Notice of General Meeting for Attis Shareholders
and in the Helium One Admission document, both expected to be
published shortly.
A copy of this announcement will be available on the Company's
web site. For further information visit www.attisog.com or contact
the following:
Paolo Amoruso Attis Oil & Gas Ltd +1 713 869 1544
David Minchin Helium One Global Ltd +44 20 7920 3150
Roland Cornish Beaumont Cornish Ltd +44 20 7628 3396
James Biddle Beaumont Cornish Ltd +44 20 7628 3396
Duncan Vasey Peterhouse Capital Limited +44 20 7220 9792
Lucy Williams Peterhouse Capital Limited +44 20 7220 9792
Nick Elwes Tavistock PR +44 20 7920 3150
Charlie Vivian Tavistock PR +44 20 7920 3150
Further information on Helium One
Helium One has identified a globally unique, large-scale,
high-grade, primary helium project in Tanzania with the potential
to resolve a supply-constrained market.
Helium One's assets are located within the rift basins on the
margin of the Tanzanian Craton. Through Helium One's subsidiary
companies Gogota (Tz) Limited, Stahamili (Tz) Limited and Njozi
(Tz) Limited, the Company has secured 18 Prospecting Licences
covering more than 4,512 km(2) in three distinct project areas: the
Rukwa, Balangida and Eyasi projects. These are located near surface
seeps with helium concentrations ranging up to 10.5% He by
volume.
The Rukwa Project or Rukwa, Helium One's main project, is
located within the Rukwa Rift Basin covering 3,448km(2) in
south-west Tanzania. The project is considered to be an advanced
exploration project and the company has identified 21 prospects and
4 leads based on historical drilling, reprocessed seismic lines,
high resolution gravity survey, and surface seeps analysis.
SRK Consulting have reported (see Technical Note) a 'Best
Estimate' Un-risked Prospective Resource of 138 Bcf (2U/P50) (2U
Risked Prospective Resource is estimated at 14.0 Bcf) for the
Company's Rukwa Project, meaning that the project has potentially
strategic global implications with the ability to significantly
resolve helium supply/demand issues.
Helium One's additional two projects, Eyasi and Balangida, which
cover areas of 804km(2) and 260km(2) respectively, are located in
north central Tanzania. Both have exceptional helium gas
concentrations at surface, and ideal geology for source, reservoir,
trap and seal. These projects are not as advanced in their
exploration as Rukwa; however, Helium One has commenced work
programmes, including an airborne gravity survey, to define the
prospective sub-surface structures.
All Helium One's licences are held on a 100% equity basis and
are in close proximity to the required infrastructure.
Helium One intends, subject to minimum fundraise of GBP5m to be
completed concurrent with the Transaction, to drill three
exploration wells at onshore mapped prospects within the Rukwa
Project in Q1/Q2 2021, with the on-the-ground environmental
permitting work already underway. Subsequent appraisal or
exploration drilling and seismic acquisition will follow,
contingent on the results of the initial wells.
Financial Information on Helium One
Helium One has been engaged in Tanzania over the last five years
with exploration and assessment expenditure to 30 June 2020
totalling US$7.9m.
US$ Audited Year Audited Year Audited Year
ended 30 June ended 30 June ended 30 June
2020 2019 2018
Loss before tax ($2,257,531) ($1,268,665) ($4,245,900)
--------------- --------------- ---------------
Net Assets $7,783,836 $6,449,119 $5,311,491
--------------- --------------- ---------------
Helium
Helium's combination of physical and chemical characteristics
makes it a high value, non-renewable commodity with numerous
applications in crucial fields of industry and technology. Helium
is a unique commodity with numerous high-value and high-tech
applications and listed on the critical materials list for the US
and Australia.
There is no way of manufacturing helium artificially. Helium is
made by the slow and steady radioactive decay of elements within
ancient continental crust. It is released when this crust is broken
up by powerful plate tectonic forces, as occur within the East
African Rift valley.
Helium is a colourless, odourless, non-toxic, inert (noble) gas
and is the second lightest element in the periodic table. With the
lowest boiling point of any element (-268.9degC or -452.1degF) and
as a non-reactive gas, it lends itself well to cryogenic
applications such as cooling superconducting magnets in MRIs
(magnetic resonance imaging) and NMR (nuclear magnetic resonance)
spectrometers. Helium is also used as a shielding gas in welding
and in semiconductor manufacturing where an inert atmosphere is
required. Beyond this, helium's lightness and low reactivity allow
it to be used for leak detection and purging/pressurizing rocket
propulsion systems.
The majority of helium is sourced as a by-product of hydrocarbon
production at concentrations typically ranging from 0.05% - 0.35%
He. However inelastic by-product supply cannot meet growing world
demand and with US Federal Helium reserve, a strategic stockpile
established in 1925, ceasing sales to industrial customers last
year, production at 5.6Bcf fall has fallen behind global demand of
6.3Bcf. With limited supply and rising helium prices, the Directors
believe that new primary helium projects are required to balance
the market.
The Transaction
Attis has entered into a binding Implementation Agreement ("the
Agreement"), subject to certain conditions as set out below, with
Helium One Treasury Ltd, a wholly owned subsidiary of Helium One,
which sets out the commercial terms of a proposed merger by way of
an amalgamation under BVI law ("Amalgamation"). Paolo Amoruso,
currently Attis' Chairman, will step down as an executive and board
member effective the date of Helium One's Admission.
Under the terms of the Agreement, on completion of the
Amalgamation all existing Attis Shares will be cancelled and Attis
Shareholders will be issued with 1 Helium One Ordinary Share
(Shares) at 2.84p per Share for every 236 Attis Shares held at the
record date (to be determined in due course) which values Attis at
approximately GBP1.764 million, representing approximately 0.012p
for each Attis Share.
It is intended that an application will be made for the Helium
One Ordinary Shares to be admitted to trading on AIM in due course
("Admission"). Admission is subject to a number of conditions,
including a minimum raise of GBP5m to support exploration
activities and working capital.
The Amalgamation is conditional on, amongst other things, the
approval by Attis Shareholders of the Amalgamation and the proposed
cancellation on AIM at a General Meeting of Attis. A Notice of
General Meeting will be posted to Attis Shareholders along with the
Helium one AIM Admission Document in due course.
Technical Note
The prospective resource referred to above has been estimated
using probabilistic analysis; these estimates have been prepared in
accordance with generally accepted petroleum engineering and
evaluation principles set forth in the 2018 and 2011 (Guideline)
Editions of the Petroleum Resource Management System of the Society
of Petroleum Engineers (PRMS, 2011 and 2018). New terminology as
per PRMS 2018 in describing low (1U equivalent to P90), best (2U
equivalent to P50) and high estimates (3U equivalent P10) are used
to denote as-yet undiscovered volumes.
The prospective resource referred to above is calculated on both
a gross and net attributable basis.
Technical Glossary
1U (low) With respect to resource categorization, this is
considered to be a conservative estimate of the quantity that will
actually be recovered from the accumulation by a project. If
probabilistic methods are used, there should be at least a 90 per
cent. probability (P90) that the quantities actually recovered will
equal or exceed the low estimate.
2U (best) With respect to resource categorization, this is
considered to be a best estimate of the quantity that will actually
be recovered from an accumulation by a project. If probabilistic
methods are used, there should be at least a 50 per cent.
probability (P50) that the quantities actually recovered will equal
or exceed the best estimate.
3U (high) With respect to resource categorization, this is
considered to be an optimistic estimate of the quantity that will
actually be recovered from an accumulation by a project. If
probabilistic methods are used, there should be at least a 10 per
cent. probability (P10) that the quantities actually recovered will
equal or exceed the high estimate.
2D Two-dimensional
Bcf billions of cubic feet
He Helium
MMcf millions of cubic feet
MMcf/d millions of cubic feet per day
Lead An anomaly, such as a geologic structure or a seismic
amplitude anomaly, that potentially hosts an economic accumulation.
Leads are less well defined than a prospect, and typically require
more geophysical data acquisition to be elevated to prospect
status.
Prospect A prospect is commonly an anomaly, such as a geologic
structure or a seismic amplitude anomaly, that potentially hosts an
economic accumulation
Rift basin Region in which the Earth's crust is pulling apart
and creating normal faults and down-dropped areas or
subsidence.
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