Magnolia Petroleum plc / Index: AIM /
Epic: MAGP / Sector: Oil & Gas
22 May 2018
Magnolia Petroleum
plc (‘Magnolia’ or ‘the Company’)
Proposed
cancellation of admission to trading on AIM
Magnolia Petroleum plc, the AIM quoted US focused oil and gas
exploration and production company, announces that it is proposing
to cancel the admission to trading on AIM of its Ordinary Shares
(“Cancellation”).
A circular will be posted to Shareholders today setting out the
background to and reasons for the Cancellation, the reasons why the
Directors believe that this is in the best interests of the Company
and its Shareholders as a whole and their recommendation to
Shareholders to vote in favour of the proposal. The circular will
also contain a notice convening a general meeting for 15:30 p.m. BST (09:30
a.m. local time) on 7 June
2018 to be held at the offices of Pray Walker P.C., 100 West
Fifth Street, Suite 900, Tulsa, OK
74103, USA.
Attached below are extracts from the circular which will also be
available on the Company’s website
http://www.magnoliapetroleum.com/ and which should be read in
full.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information on Magnolia Petroleum Plc visit
http://www.magnoliapetroleum.com/ or contact the following:
|
|
|
Rita Whittington |
Magnolia Petroleum Plc |
+01918449 8750 |
Jo Turner / James
Caithie |
Cairn Financial Advisers
LLP |
+44207213 0880 |
Daniel Gee |
Cornhill Capital Limited |
+44207710 9610 |
Lottie Brocklehurst |
St Brides Partners Ltd |
+44207236 1177 |
Frank Buhagiar |
St Brides Partners
Ltd |
+44207236 1177 |
Proposed
Cancellation from Trading on AIM
Notice of General
Meeting
Dear Shareholder,
1. Introduction
The Company is proposing to seek
Shareholder consent to cancel admission of its Ordinary Shares to
trading on AIM ("Cancellation"). The Directors consider the
Cancellation to be in the best interests of Shareholders having
taken into account the Company’s ability to raise further funds and
the costs of maintaining its AIM quotation.
This Circular sets out the
background to and reasons for the Cancellation, additional
information on the implications of the Cancellation for the Company
and its Shareholders and why the Board believes the Cancellation to
be in the best interests of the Company and of the Shareholders as
a whole. Having disclosed their interests in the Company and their
intentions with regard to their individual holdings, the Directors
unanimously recommend the Cancellation.
Pursuant to Rule 41 of the AIM Rules
for Companies the Company is required to obtain the consent of not
less than 75 per cent. of the votes cast by Shareholders at a
general meeting in order to request that the Company's Ordinary
Shares are cancelled from trading on AIM. A notice of a general
meeting is included at the end of this document convening a general
meeting to be held at the offices of Pray Walker, P.C. at 100 West
Fifth Street, Suite 900, Tulsa, OK
74103, USA at 15:30 p.m. BST (to be held at 09:30 a.m. local time) on 7 June 2018.
2. Reasons for the
Cancellation
The Company is an oil and gas
exploration and production company that was founded on 2 July 2008 to engage in the acquisition,
exploitation and development of oil and gas properties primarily
located onshore in the United
States. The Company was admitted to trading on AIM on
25 November 2011.
The Company’s business model
revolves around its ability to invest funds in maintaining and
expanding its portfolio of working interests in wells. In the
last few years, the Company has found it increasingly difficult to
raise sufficient funds through the AIM market to provide the
business with the scale it requires. Despite the recent rise
in oil prices, the Company’s share price remains depressed which
further adds to the difficulty of raising funds through the AIM
market. To this extent, the Directors consider that any future
investment is likely to need to come from internally generated
revenue or from other sources other than placing of new shares.
In the Company’s operations update
of 16 April 2018, it provided a
current overview of its reserves and portfolio of interests in 119
producing well. The Company further stated its intention to
continue with its debt reduction programme. With the backdrop of
rising oil prices and asset prices, the Directors are of the view
that it is an favourable time to consider the disposal of certain
interests in order to allow the Company to significantly reduce, if
not eliminate, debt whilst maintaining a portfolio of revenue
producing working interests. The effect of these future disposals
will not only reduce net debt, but also reduce the company’s
revenue generating asset base and scale of the business placing
further emphasis on the costs and benefits of maintaining the
Company’s AIM quotation. The Directors estimate that the
recurring administrative costs savings of Cancellation will be
approximately £100,000 per annum.
The Directors have conducted a
review of the benefits and costs of maintaining the Company’s
quotation on AIM and, after careful consideration of the matters
laid out above, the Board considers the costs of maintaining the
Company’s AIM quotation to exceed the benefits and opportunities of
the Company remaining quoted on AIM. Accordingly, the Board has
convened the General Meeting as it believes the Cancellation to be
in the best interests of Shareholders and the Company as a
whole.
The Company will consider putting in
place a matched bargain facility as a mechanism to assist
shareholders buy and sell ordinary shares should Cancellation
become effective.
3. Effects of Cancellation
Should the Cancellation take place,
Shareholders are reminded, inter alia, that there will no
longer be a formal market mechanism for Shareholders to trade in
the Ordinary Shares and no price will be publicly quoted for the
Ordinary Shares. In the absence of another trading mechanism
being put in place, there will be no liquidity and marketability of
the Ordinary Shares and the value of such Ordinary Shares may be
consequently adversely affected. It will be very difficult for
Shareholders to realise value from their Ordinary Shares. The
Ordinary Shares will remain transferable through CREST.
Further, the AIM Rules will no
longer apply to the Company and levels of corporate governance and
transparency will no longer be dictated by those rules.
Shareholders will no longer be afforded the protections given by
the AIM Rules, such as the requirement to be notified of certain
events, including substantial transactions, financing transactions,
related party transactions and fundamental changes in the Company's
business, including certain acquisitions and disposals.
In addition, the Company will no
longer be required to retain a nominated adviser or broker.
Shareholders should note that that
Takeover Code will continue to apply to the Company following the
Cancellation
4. Process for Cancellation
In accordance with Rule 41 of the
AIM Rules, the Company has notified the London Stock Exchange plc
of its proposed Cancellation from trading on AIM.
Under the AIM Rules, it is a
requirement that the Cancellation is approved by the requisite
majority of Shareholders voting at a general meeting (being not
less than 75 per cent. of the votes cast). Accordingly, a
resolution set out in the Notice of General Meeting seeks
Shareholders’ approval for the Cancellation. Subject to the
resolution approving the Cancellation being passed at the General
Meeting, it is anticipated that trading in the Ordinary Shares on
AIM will cease at close of business on 21
June 2018 with the Cancellation taking effect at
07:00 a.m. on 22 June 2018.
Upon the Cancellation becoming
effective, Cairn Financial Advisers LLP will cease to be nominated
adviser to the Company and the Company will no longer be required
to comply with the rules and corporate governance requirements to
which companies admitted to trading on AIM are subject, including
the AIM Rules.
5. General Meeting
You will find set out at the end of
this document a notice convening the General Meeting to be held at
the offices of Pray Walker, P.C. at 100 West Fifth Street, Suite
900, Tulsa, OK 74103, USA at 15:30 p.m.
BST (to be held at 09:30 a.m.
local time) on 7 June 2018 to
consider the resolution seeking approval for the Cancellation.
6. Action to be
taken
Holders of Existing Ordinary Shares
will find enclosed with this document a Form of Proxy for use by
them at the General Meeting.
Whether or not you are able to
attend the General Meeting, you are requested to complete the
enclosed Form of Proxy and return it to Neville Registrars Limited,
Neville House, 18 Laurel Lane,
Halesowen, West Midlands B63 3DA
as soon as possible and, in any event, so as to arrive by
15:30 p.m. on 5 June 2018. The completion and return of a Form
of Proxy will not prevent you from attending the General Meeting
and voting in person if you subsequently wish to do so.
Shareholders are reminded that, if
their Ordinary Shares are held in the name of a nominee, only that
nominee or its duly appointed proxy can be counted in the quorum at
the General Meeting.
If you are in any
doubt as to what action you should take, you are recommended to
seek your own personal financial advice from your broker, bank
manager, solicitor, accountant or other independent financial
adviser authorised under the Financial Services and Markets Act
2000 (as amended) if you are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser,
immediately.
7. Recommendation
The Directors consider the
Cancellation to be in the best interests of the Company and
Shareholders as a whole. Accordingly, the Directors unanimously
recommend that Shareholders vote in favour of the resolution to be
proposed at the General Meeting as they intend to do in respect of
their aggregate interests.
DEFINITIONS
The following definitions apply
throughout this document (including the Notice of General Meeting)
and the form of proxy unless the context requires otherwise:
“Act” |
the Companies Act 2006 (as
amended) |
“AIM Rules” |
the AIM Rules for Companies and the
AIM Rules for Nominated Advisers, as issued by the London Stock
Exchange from time to time |
“AIM” |
the market of that name operated by
the London Stock Exchange |
“Cairn” |
Cairn Financial Advisers LLP, the
Company’s Nominated adviser as at the date of this document |
“Cancellation” |
cancellation from trading of the
Company’s Ordinary Shares from trading on the AIM market of the
London Stock Exchange |
“certificated” or “in
certificated form” |
a share or security which is not in
uncertificated form (that is, not in CREST) |
“CREST” |
a relevant system (as defined in the
CREST Regulations) in respect of which Euroclear is the Operator
(as defined in the CREST Regulations) |
“CREST Regulations” |
the Uncertificated Securities
Regulations 2001 (SI 2001/3755), as amended from time to time |
“Directors” or “Board” |
the existing directors of the
Company whose names are set out on page 4 of this document |
“Euroclear” |
Euroclear UK & Ireland
Limited |
“Ordinary Shares” |
the 34,906,992 Ordinary Shares in
issue at the date of this document |
“General Meeting” |
a general meeting of the Company to
be held at 15:30 p.m. BST (09:30 a.m. local time) on 7 June 2018 at
the offices of Pray Walker P.C., 100 West Fifth Street, Suite 900,
Tulsa, OK 74103, USA or any adjournment thereof, notice of which is
set out in the Notice of General Meeting |
“Group” |
the Company and its subsidiary
undertakings |
“Magnolia” or “the
Company” |
Magnolia Petroleum plc |
“Notice of General
Meeting” |
the notice convening the General
Meeting which is set out at the end of this document |
“Ordinary Shares” |
ordinary shares of 0.1 pence each in
the share capital of the Company |
“Resolution” |
the resolution to be proposed at the
General Meeting, details of which are set out in the Notice of
General Meeting |
“Shareholder” |
a holder of Ordinary Shares from
time to time |
“United Kingdom” |
the United Kingdom of Great Britain
and Northern Ireland. |
“United States” or
“US” |
United States of America and its
territories |
EXPECTED TIMETABLE
OF PRINCIPAL EVENTS
|
2018 |
Notice given to London
Stock Exchange notifying it of the proposed Cancellation |
22
May |
Publication of this
document |
23
May |
Latest time and date
for receipt of Form of Proxy |
15:30
p.m. on 5 June |
General
Meeting (to be held at the offices of Pray Walker P.C., 100 West
Fifth Street, Suite 900, Tulsa, OK 74103, USA – BST-6) |
15:30
p.m. on 7 June |
Announcements of
result of the General Meeting |
7
June |
Expected last day of
dealings in Ordinary Shares on AIM |
21
June |
Expected time and date
that the admission to trading of the Ordinary Shares on AIM will be
cancelled |
With
effect from 07:00 a.m. on 22 June |
Notes:
- References to times in this document are to London time (unless otherwise stated).
- The General Meeting is being held in the United States and will take place at
09:30 a.m. local time (BST -6)
- The times are subject to change by the Company, in which case
details of the new times and dates will be notified to the London
Stock Exchange and the Company will make an appropriate
announcement through a Regulatory Information Service.
EQUITY
STATISTICS
|
|
Issued Share Capital
of the Company as at the date of this document |
34,906,992 |
|
|
ISIN code for the Ordinary
Shares |
GB00B63QSF76 |
|
|
SEDOL for the Ordinary Shares |
B63QSF7 |
|
|
TIDM Code |
MAGP |