Highlights
• Proposed acquisition of Milesian for initial consideration of 8,921,118 shares in Lansdowne, representing 30 per cent. of the Enlarged Issued Share Capital.
• Milesian’s principal assets are Licensing Options 05/2 and 05/1 in the Celtic Sea, offshore Ireland. Two large structures, Amergin and Eremon, have been identified and mapped by Milesian and are considered prospective for oil in Jurassic reservoir targets.
• Combining Milesian’s and Lansdowne’s respective Celtic Sea assets will broaden the portfolio, create greater critical mass furthering the objective of building a cost effective multi-well exploration programme.
• Loan facility of £1 million to be made available on completion of the Acquisition.
• Ramco Energy’s shareholding in Lansdowne will be diluted down to below 50 per cent., currently 61 per cent.
• Emmet Brown, Richard Pollock and Thomas Anderson, all current directors of Milesian, will be appointed to the Lansdowne Board upon completion of the Acquisition.
• The proposed Acquisition is conditional on Lansdowne shareholders approval at a General Meeting to be held on 17 December 2007 - Lansdowne’s largest shareholder, Ramco Hibernia Limited (61 per cent.), has undertaken to vote in favour of the proposed acquisition.
Steve Boldy, CEO of Lansdowne, commented:
“We know Milesian and its assets well and they are an excellent fit with the Lansdowne assets and our strategy. This acquisition will create an enhanced entity which will better enable us to move forward our combined portfolio of prospects. I look forward to working with Emmet Brown in developing our exciting enlarged acreage to its full potential and delivering value to our shareholders.”
Introduction
The Company announces the proposed acquisition of Milesian for an initial consideration to be satisfied by the issue of 8,921,118 new Ordinary Shares, representing 30.0 per cent. of the Enlarged Issued Share Capital. Further deferred consideration of up to 8,110,099 new Ordinary Shares may be payable dependent upon the results of a 2D seismic programme over Milesian’s Celtic Sea acreage. The Acquisition is conditional upon, inter alia, Admission of the new Ordinary Shares to the AIM Market and the passing of all the resolutions at a General Meeting of the Company convened for 17 December 2007.
Information on Milesian
Milesian’s principal assets are Licensing Options 05/2 and 05/1 in the Celtic Sea (the “Licensing Options”). These were awarded in 2005 by the Department of Communications Marine and Natural Resources in Ireland and Milesian has carried out regional geological studies and detailed mapping of existing seismic data, resulting in the identification of a number of prospects and leads.
Both of the Licensing Options have been extended until the end of 2007. Under the terms of the Licensing Options, the holder has the first right, exercisable at any time during the period of the option, to an Exploration Licence over all or part of the area covered by the option. Milesian intends to apply for one or more ‘Standard Exploration Licences’ prior to the year-end.
The acreage covered by the Licensing Options is contiguous with some of Lansdowne’s Celtic Sea acreage. Within Licensing Option 05/2, Milesian has identified and mapped two large structures, Amergin and Eremon, which are considered prospective for oil in Jurassic reservoir targets.
Amergin prospect
The Amergin prospect lies in water depth of c. 350ft, some 40km south of the Irish coast and approximately 60 km west of the Kinsale Head gas field.
The Amergin prospect is a tilted fault block mapped on 2D seismic data. Trial reprocessing of key existing 1986 seismic data has demonstrated the scope for some improvement in data quality and the planned forward programme is to acquire additional new 2D seismic data to improve structural definition of the Amergin and Eremon structures. A 2D seismic programme of c. 485km was planned for 2007, but boat availability issues in the fair weather acquisition season resulted in this being postponed. The planned start date is now in the spring of 2008.
The primary reservoir objective is the basal Upper Jurassic sandstone sequence proven productive in well 49/9-2 (Helvick discovery), where this sequence flowed on test at a rate of 6,467 bopd of excellent quality 44-degree API oil.
Milesian has estimated P50 potentially recoverable prospective resources of 90 MMBbls for the basal Upper Jurassic reservoir.
Eremon lead
The Eremon lead lies in water depth of c.350ft, some 40km south of the Irish Coast and approximately 70km west of the Kinsale Head gas field.
Secondary reservoir targets exist in deeper Jurassic horizons and in shallower Cretaceous Wealden sands.
The Eremon structure is a NE-SW trending horst block feature with probable dip closure demonstrated to the NE and SW. Milesian considers Eremon to be the only identified closed horst feature at Jurassic level, along the northern margin of the North Celtic Sea Basin. Eremon is classified as an exploration lead and one of the objectives of the additional seismic data programme planned for 2008 is to confirm closure and upgrade this structure to prospect status.
Financial information on Milesian
Milesian made a loss of €167,042 for the seven month period ended 31 October 2007 and a loss of €798,849 for the year ended 31 March 2007 (year ended 31 March 2006: €25,485 loss). The loss in the year ended 31 March 2007 consisted mainly of a pre-production expenditure write-off, against a project outside of Ireland, of €692,030.
As at 31 October 2007, Milesian’s net assets were €500,579 and as at 31 March 2007, its net liabilities were €39,155 (year ended 31 March 2006: net assets of €759,695).
Proposed Directors
It is proposed that Emmet Brown, Richard Pollock and Thomas Anderson will join the Board on completion of the Acquisition. Emmet Brown is currently Managing Director of Milesian and will join the Board as Director of Business Development. Thomas Anderson and Richard Pollock, currently Non-Executive Directors of Milesian, will join the Board as Non-Executive Directors. Further details are set out below under the heading “Additional information”.
Background to and reasons for the Acquisition
Both Lansdowne and Milesian are upstream oil and gas companies holding acreage in the Celtic Sea, offshore southern Ireland.
However, whilst Lansdowne has focused upon targets in the Lower Cretaceous Greensand and Wealden reservoirs, the horizons that produce in the Kinsale, Ballycotton and Seven Heads Gas Fields in the Celtic Sea, Milesian has focused upon Jurassic targets, similar to those that tested oil in the Helvick 49/9-2 discovery.
The Directors and Proposed Directors believe that combining their respective Celtic Sea assets enhances the spread of the combined entity’s prospects, with Milesian’s substantial Jurassic oil prospects complementing Lansdowne’s Cretaceous, predominantly gas, prospects. The Directors and Proposed Directors further believe that the combined portfolio of assets will have greater critical mass and should improve the chances of the combined entity concluding successful farm-outs and building a cost-effective multi-well exploration programme in the Celtic Sea.