Publication of Open Offer ProspectusDecember 16th, 2015

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES OR AUSTRALIA NOR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. 

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. IT IS NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT SOLELY ON THE BASIS OF INFORMATION CONTAINED IN THE PROSPECTUS TO BE PUBLISHED BY GULFSANDS PETROLEUM PLC IN CONNECTION WITH THE PROPOSED CAPITAL RAISING. 

 

Gulfsands Petroleum Plc

Publication of Open Offer Prospectus

16 December 2015

Gulfsands Petroleum Plc (“Gulfsands” or the “Company”), the AIM listed oil and gas exploration company (AIM:GPX) with activities in Syria, Morocco, Tunisia and Colombia, is pleased to announce the publication and dispatch to Qualifying Shareholders today of its Open Offer Prospectus, which is also available on the Company’s website, www.gulfsands.com. Capitalised terms in this announcement are as defined in the Prospectus unless the context otherwise requires.

Background to Open Offer

On 27 August 2015, the Company announced a Capital Raising to raise gross proceeds of £14.2 million (approximately US$22.0 million) before costs by way of an Open Offer. The Open Offer was conditional upon, among other things, the passing of certain resolutions to permit the Open Offer to proceed. On 14 September 2015, the Company held a general meeting of Shareholders to vote on the resolutions, all of which were duly passed by Shareholders.

As a result, the Company is pleased to dispatch its Prospectus to Shareholders setting out the detailed terms and conditions of the Open Offer. The Open Offer is to be made to all Qualifying Shareholders (which excludes those Shareholders resident in Australia and the US) to provide an opportunity to subscribe for an aggregate of 354,837,296 Open Offer Shares (representing a subscription of 350,733,941 new Ordinary Shares and a purchase of 4,103,355 Treasury Shares) on the basis of 3.01 Open Offer Shares for every 1 Existing Share held as at the Record Date, at an Open Offer Price of 4.0 pence per Open Offer Share. The Company proposes to issue and allot the Open Offer Shares to Qualifying Shareholders who have validly subscribed for such shares following the Open Offer Closing Date.

Waterford and Mr. Griffiths, as existing Shareholders in the Company, have each irrevocably undertaken to subscribe for their full entitlements under the Open Offer and have undertaken to underwrite the remaining Open Offer Shares whereby they will acquire any of these shares that are not subscribed for by Qualifying Shareholders under the Open Offer. The net result of this is that, in the event that no other Qualifying Shareholder elects to take up its Open Offer Entitlements, the Open Offer shall be fully subscribed by Waterford and Mr. Griffiths by way of the Underwriting.

Shareholders are encouraged to read the Open Offer Prospectus in full and should not subscribe for or purchase any Open Offer Shares solely on the basis of this announcement.

Related Party Transaction

The subscription by Waterford, as a holder of in excess of 10 per cent. of the Existing Shares, for Open Offer Shares under the Underwriting is considered a related party transaction under the AIM Rules. The independent Directors for the purposes of the Open Offer, being Mr. West, Mr. Morris, Mr. Darby and Mr. Bell, consider, having consulted with Cantor Fitzgerald as the Company’s nominated adviser, that the terms of the Underwriting are fair and reasonable insofar as the Company’s Shareholders are concerned.

Re-classification of Reserves in Syria

The technical information in the Open Offer Prospectus, referring to reserves and resources, has been prepared in accordance with the PRMS as adopted in 2007 and the PRMS Guidelines as adopted in 2011. The Company prepares its estimate of reserves and resources for each of its assets in accordance with the PRMS and the PRMS Guidelines and, unless stated otherwise, these estimates are independently audited by LR Senergy Limited.

For hydrocarbon accumulations to be classified as reserves they must be discovered, recoverable and commercial; a further consideration is the timing of their proposed development and the PRMS refers to a benchmark of five years from the date of the evaluation for the initiation of development. Furthermore, the PRMS Guidelines consider the rare situation for reserves to be re-classified as contingent resources as a consequence of an unforeseen event that is beyond the control of the operator and partners in the asset, such as unexpected political or legal change that causes the development activity to be delayed beyond a reasonable time frame (as defined in the PRMS) of five years.

Notwithstanding that the hydrocarbons discovered on the Block 26 PSC in Syria have been evaluated as reserves for several years leading up to, and after, the imposition of EU Sanctions in Syria, and that commercial production from the Block 26 area has exceeded 21MMbbls, for the purposes of the Open Offer Prospectus, the volumes of oil previously reported as 2P reserves have been re-classified by the Company as 2C contingent resources on the basis that the Company cannot give a definite timeline for the resumption of the full field development of the discovered fields within Block 26 that was suspended under the declaration of Force Majeure in 2011. This has resulted in total 2C contingent resources in Syria of 85.5MMboe, and total 2P reserves of zero as at the date of this announcement. This re-classification has been audited by LR Synergy Limited, independent reserve/resource engineers.

Whist no definite timeline can be substantiated, the Board continues to believe that the EU Sanctions will be lifted within five years and will continue to monitor all activity focused on resolving the situation in Syria and reconsider the basis for reversing this re-classification in line with any future developments.

Expected Timetable of Principal Events

Record Date for the Open Offer

Publication date and posting of Prospectus to Qualifying Shareholders

Ex-entitlement date for the Open Offer

Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders

Recommended latest time for requesting withdrawal of

5.00 p.m. on 14 December 2015

16 December 2015

8.00 a.m. on 17 December 2015

As soon as possible after 8.00 a.m. on 17 December 2015

4.30 p.m. on 29 December 2015

Read Open Offer Prospectus