TIDMBEH
RNS Number : 6472O
Bayfield Energy Holdings PLC
15 October 2012
Bayfield Energy Holdings plc
("Bayfield" or the "Company", AIM: BEH)
Proposed merger with Trinity Exploration & Production
Limited
Bayfield Energy Holdings plc ("Bayfield" or the "Company")
(Ticker Symbol: BEH), an upstream oil and gas exploration and
production company with interests in Trinidad & Tobago and
South Africa, today announces proposals for a merger with Trinity
Exploration & Production Limited ("Trinity").
Summary
-- The Boards of Bayfield and Trinity are pleased to announce
that they have reached agreement on the terms of a conditional
merger of Bayfield and Trinity (the "Merger").
-- The enlarged group will be named Trinity Exploration &
Production plc ("New Trinity" or the "Enlarged Group") and be led
by Bruce Dingwall CBE as Executive Chairman and Joel "Monty"
Pemberton as Chief Executive Officer (currently Executive Chairman
and Chief Executive Officer of Trinity respectively).
-- Trinity is a leading private independent oil and gas company
with onshore and offshore assets in Trinidad, headquartered in San
Fernando, Trinidad.
-- The Merger will create the largest Trinidad-focused
independent E&P company, with 11 operated fields, gross
production of approximately 4,650 bbl/d and net production of
approximately 3,800 bbl/d based on current production rates.
-- New Trinity will have a diversified portfolio of onshore,
West and East coast production, significant near-term production
growth opportunities from low risk developments and multiple
exploration prospects with the potential to deliver meaningful
reserves/resource growth through an active drilling programme.
-- In order to accelerate delivery of the significant upside
that exists in the combined portfolios, the Enlarged Group intends
to raise additional debt and/or equity capital in conjunction with
the Merger.
-- Under the terms of the Merger, which will be effected by the
acquisition of Trinity by Bayfield, Trinity Shareholders will own
55 per cent. of New Trinity and Bayfield Shareholders will own 45
per cent. (on a fully diluted basis, assuming Bayfield acquires 100
per cent. of the Trinity Shares and prior to raising any additional
equity capital).
-- The Merger constitutes a reverse takeover of Bayfield under
the AIM Rules and is conditional, inter alia, upon Bayfield
Shareholder approval, the approval by the Takeover Panel of the
Rule 9 Waiver, and the consent of the Ministry and Petrotrin.
Accordingly, trading in the Company's shares has been suspended
pending publication of an Admission Document.
-- Bayfield has received irrevocable undertakings to vote in
favour of the Resolutions to, inter alia, approve the Merger at the
Bayfield General Meeting from Bayfield Shareholders holding, in
aggregate, 109,415,867 Bayfield Shares, representing approximately
50.54 per cent. of the issued share capital of Bayfield.
-- An Admission Document containing details of the Merger and
New Trinity will be sent to Bayfield Shareholders in due
course.
-- The Boards of Bayfield and Trinity having reached agreement
on the Merger, Bayfield has terminated discussions with all other
parties regarding a potential offer for the Company and,
consequently, the Company is no longer in an offer period.
Commenting on the Merger, Bruce Dingwall CBE, the Executive
Chairman of Trinity, said:
"New Trinity will be the leading Trinidad-focused independent
E&P company offering investors an attractive balance of
existing production, near-term production growth from low risk
development opportunities and exciting exploration prospects."
Finian O'Sullivan, Chairman of Bayfield, said:
"The proposed merger offers shareholders the benefits of
diversification and scale from an enlarged producing asset base
while retaining significant exposure to material near-term
potential."
Enquiries
Bayfield Tel: +44 (0) 20 7920
Hywel John, Chief Executive Officer 2347
FirstEnergy Capital LLP (Financial Adviser Tel: +44 (0) 20 7488
& Joint Broker to Bayfield) 0200
Hugh Sanderson
David van Erp
Seymour Pierce (NOMAD & Joint Broker Tel: +44 (0)20 7107
to Bayfield) 8000
Jonathan Wright/Stewart Dickson
Richard Redmayne/David Banks
M:Communications (PR Adviser to Bayfield) Tel: +44 (0) 20 7920
Patrick d'Ancona 2347/43
Ann-marie Wilkinson
Trinity Tel: +44 (0) 20 7404
Monty Pemberton, Chief Executive Officer 5959
Robert Gair, Corporate Development Manager
RBC Capital Markets (Financial Adviser Tel: +44 (0) 20 7653
to Trinity) 4000
Tim Chapman
Matthew Coakes
Brunswick (PR Adviser to Trinity) Tel: +44 (0) 20 7404
Patrick Handley 5959
Catriona McDermott
Introduction
The Boards of Bayfield and Trinity are pleased to announce that
they have reached agreement on the terms of a conditional merger of
Bayfield and Trinity, details of which are set out below.
Bayfield proposes to acquire 100 per cent. of Trinity's issued
and to be issued share capital. Trinity Shareholders will receive
approximately 7,478 new Ordinary Shares for each Trinity Share held
and Trinity's options and warrants will be converted to options and
warrants for Bayfield shares at the same exchange ratio. The
consideration at Completion will be satisfied by the issue,
credited as fully paid, of up to 255,623,207 Consideration
Shares.
The Merger will constitute a reverse takeover of Trinity by
Bayfield for the purposes of the AIM Rules and, accordingly,
trading in the Company's shares has been suspended pending
publication of an Admission Document (which will provide further
detailed information on the Merger and New Trinity) which will be
posted to Bayfield Shareholders in due course.
Background on Trinity
Overview
Trinity is a private independent oil & gas company with
onshore and offshore assets in Trinidad. It is led by an executive
team with significant Trinidadian and international operating
expertise and a track record of value creation for shareholders in
the international E&P industry.
Trinity was formed in 2005 when a group of founding shareholders
led by Bruce Dingwall CBE acquired Venture Production plc's
Trinidad operations. Since then, the business has grown through
organic drilling and further acquisitions.
Trinity is headquartered in San Fernando, Trinidad, where the
senior management team is based, and has significant local
ownership. Trinity employs more than 200 staff and this team has an
excellent understanding of the local operating environment and
business culture including strong government, supply chain and
other stakeholder relationships.
Operations
Trinity operates ten licenses in Trinidad, including two
licenses in the Gulf of Paria, offshore Trinidad's West coast, and
eight onshore licenses. Trinity's portfolio offers a balance of
current production (approximately 2,370 bbl/d net), low risk
development opportunities and exploration/appraisal upside.
A map detailing Trinity's licences in Trinidad may be found by
clicking here:
http://www.rns-pdf.londonstockexchange.com/rns/6472O_-2012-10-12.pdf
For the year ended 31 December 2011, Trinity made a profit
before tax of US$13.4m on turnover of US$53.9m. As at 31 December
2011, Trinity has net assets of US$55.4m.
Background to and reasons for the Merger
During May and June 2012, Bayfield sought to execute an equity
financing to strengthen its cash position and fund its ongoing
drilling commitments. Despite success in securing a measure of
institutional support, Bayfield was unable to complete the
fund-raising to the level required at the time due to the
deterioration in market conditions. Consequently, the Company
commenced a strategic review of its options which has culminated in
the Merger.
Completion of the Merger will establish New Trinity as the
largest independent Trinidad-focused oil and gas group and, in
particular, will:
-- create a diversified onshore, West coast and East coast
portfolio of 11 operated fields, gross production of approximately
4,650 bbl/d and net production of approximately 3,800 bbl/d based
on current production rates;
-- provide investors with exposure to a balanced mix of existing
production, significant near-term production growth opportunities
from low risk developments and exposure to multiple exploration
prospects with potential to deliver meaningful reserves/resource
upside;
-- enable New Trinity to generate operational and commercial synergies; and
-- position New Trinity for further growth through new bid rounds and M&A activity.
Principal terms of the Merger
Pursuant to the Transaction Agreement, the Company has
conditionally agreed to purchase Trinity Shares from certain
Trinity Shareholders (including all of the executive directors of
Trinity) holding, in aggregate, approximately 24.75 per cent. of
the current Trinity Shares in issue. The Trinity Shares held by the
remaining Trinity Shareholders are proposed to be acquired by the
Company upon Admission pursuant to conditional short form
acquisition agreements to be entered into between the Company and
such Trinity Shareholders. The Merger is conditional, inter alia,
upon Bayfield acquiring at least 90 per cent. of the Trinity Shares
in issue. As at the date of this announcement, the Company has
entered into a short form acquisition agreement with Trinity
Shareholders holding, in aggregate, 52.41 per cent. of the Trinity
Shares. Accordingly, pursuant to that short form acquisition
agreement and the Transaction Agreement, the Company has
conditionally agreed to acquire 77.16 per cent. of the Trinity
Shares in issue. It is intended that, prior to the date on which
the Admission Document is posted to Bayfield Shareholders, one or
more additional short
form agreements will be entered into between Bayfield and the
remaining Trinity Shareholders under which Bayfield will
conditionally agree to acquire those remaining Trinity Shares that
constitute the remaining 22.84 per cent. of the Trinity Shares.
The Transaction Agreement and the short form acquisition
agreements referred to above are conditional, inter alia, upon the
following matters:
-- Bayfield Shareholder approval of the Merger;
-- Bayfield acquiring not less than 90 per cent. of the Trinity Shares;
-- certain approvals being received from Petrotrin and the Ministry;
-- the approval by the Takeover Panel of the Rule 9 Waiver; and
-- Admission.
Irrevocable undertakings have been received from Finian
O'Sullivan, Andrey Pannikov, Alta Limited, Brian Thurley and
Jonathan Cooke to vote and to procure that their associates vote in
favour of the Merger at the Bayfield General Meeting in respect of
their aggregate holdings of 109,415,867 Ordinary Shares,
representing approximately 50.54 per cent. of the current issued
ordinary share capital of the Company.
Directors and Proposed Directors
Upon Admission, the board of directors of New Trinity will
comprise six directors. Five directors are identified below, with
an additional Independent Non-Executive Director to be appointed
prior to Admission.
Name Proposed Role Current Role
----------------------- ----------------------- -------------------------------
Bruce Dingwall Executive Chairman Executive Chairman of Trinity
CBE
----------------------- ----------------------- -------------------------------
Joel "Monty" Pemberton Executive Director Executive Director of Trinity
----------------------- ----------------------- -------------------------------
Finian O'Sullivan Non-Executive Director Executive Chairman of Bayfield
----------------------- ----------------------- -------------------------------
Jon Murphy Non-Executive Director Non-Executive Director of
Trinity
----------------------- ----------------------- -------------------------------
Anthony Brash Non-Executive Director Non-Executive Director of
Trinity
----------------------- ----------------------- -------------------------------
Details of the Board of New Trinity are set out below.
Bruce Dingwall CBE
Bruce has over 30 years' experience in the oil and gas industry.
Bruce began his career with Exxon as a geophysicist in the North
Sea before moving to Lasmo where he held numerous senior management
roles in their South East Asian operations. In 1997, Bruce founded,
and was Chief Executive Officer of, Venture Production which grew
to production of 55,000 boepd and was sold to Centrica in 2009 for
US$2.5 billion. A Trinidadian national, Bruce founded Trinity in
2004 with the acquisition of Venture Production's Trinidad assets.
Bruce is a geologist having studied at Aberdeen University.
Joel "Monty" Pemberton
Monty joined Trinity in 2005 as Chief Financial Officer and
became Chief Executive Officer in 2009. Under Monty's leadership
Trinity has significantly grown its business, through attracting
external capital and undergoing a period of rapid organic and
M&A- led growth. Monty began his career with Ernst &
Young's audit team where he qualified as a Chartered Certified
Accountant and worked in both Trinidad and the UK with a focus on
energy clients. Monty then moved back to Trinidad working in the
Energy finance division of RBTT Merchant Bank prior to joining
Trinity. Monty is a Fellow Chartered Certified Accountant from the
Association of Certified Chartered Accountants.
Finian O'Sullivan
Finian holds an honours degree in Geology from University
College Galway. Finian has pursued an international career in the
oil industry spanning 32 years with Chevron, Geophysical Systems,
Olympic Oil and Gas and Burren Energy. Finian founded Burren Energy
in 1994 and developed its business in Turkmenistan and West Africa
leading to Burren's flotation on the London Stock Exchange with a
market capitalisation of GBP175 million in 2003. As Chief
Executive, Finian expanded Burren's activities with successful
exploration and steady growth in production. In 2008, Burren Energy
was sold to Eni for GBP1.7 billion.
Jon Murphy
Jon joined Trinity's Board at the time of acquisition from
Venture Production in 2004 and brings with him over 30 years of
experience in mid-cap E&P companies. Jon's career includes
several years with Lasmo where he held various positions in
geology, planning and new business, based in the UK and Asia. In
1999, Jon joined Venture Production as COO and played a key role in
its growth to become one of the leading oil and gas companies in
the North Sea. Jon holds a BSc. Geology from the University of
London and is also a Non-Executive Director of Hurricane
Exploration.
Anthony Brash
Anthony has been involved in the oil and gas industry for over
25 years and is Managing Director of the Well Services Group. Well
Services Group is the owner of the largest drilling rig fleet in
Trinidad and offers a wide range of other oilfield services as well
as being a material onshore oil producer. Anthony has directly
negotiated and managed service contracts with BP, EOG, Repsol and
Petrotrin. Anthony holds a BA in Management and a MBA in General
Business from St. Edward's University in Austin, Texas.
The Takeover Code
End of offer period
The Boards of Bayfield and Trinity having reached agreement on
the Merger, Bayfield has terminated discussions with all other
parties regarding a potential offer for the Company and,
consequently, the Company is no longer in an offer period.
Proposed Rule 9 Waiver
The Takeover Code governs, inter alia, transactions which may
result in a change of control of a publiccompany to which the
Takeover Code applies. Under Rule 9, any person who acquires an
interest (as defined in the Takeover Code) in shares which, taken
together with shares in which he is already interested or in which
persons acting in concert with him are interested, carry 30 per
cent. or more of the voting rights of a company which is subject to
the Takeover Code, is required to make a general offer to all the
remaining shareholders to acquire their shares.
Similarly, when any person, together with persons acting in
concert with him, is interested in shares which, in aggregate,
carry more than 30 per cent. of the voting rights of such company,
but does not hold shares carrying 50 per cent. or more of such
voting rights, a general offer will normally be required if any
further interest in shares is acquired by any such person.
An offer under Rule 9 must be in cash and must be at the highest
price paid by the person required to make the offer, or any person
acting in concert with him, for any interest in shares of the
company in question during the 12 months prior to the announcement
of the offer.
Persons acting in concert comprise persons who, pursuant to an
agreement or understanding (whether formal or informal), co-operate
to obtain or consolidate control of a company or to frustrate the
successful outcome of an offer for a company. A person and each of
its affiliated persons will be deemed to be acting in concert all
with each other.
Since it is expected that all the Trinity Shareholders will
comprise a concert party for the purposes of the Takeover Code, the
Company will request the Takeover Panel to waive the obligation to
make a general offer that would otherwise be required as a result
of the Merger, subject to the approval of independent shareholders
of Bayfield on a poll. The Admission Document will contain further
information on the Rule 9 Waiver.
The following definitions apply in this announcement, unless the
context otherwise requires:
"Admission" admission of the Enlarged Share
Capital to trading on AIM becoming
effective in accordance with the
AIM Rules;
"Admission Document" admission document relating to the
Enlarged Group to be prepared in
accordance with the AIM Rules by
the Company and posted to Bayfield
Shareholders in due course;
"AIM" the AIM market operated by the London
Stock Exchange;
"AIM Rules" rules for companies whose securities
are admitted to trading on AIM published
by the London Stock Exchange;
"bbl/d" barrels of oil per day;
"Bayfield General Meeting" general meeting of the Company to
be convened in due course at which
the Resolutions will be proposed
to, inter alia, approve the Merger;
"Bayfield Shareholders" holders of Ordinary Shares;
"Company" or "Bayfield" Bayfield Energy Holdings plc, a
company registered in England and
Wales with company number 07535869;
"Completion" completion of the Merger in accordance
with the terms of the Transaction
Agreement and short form acquisition
agreements to be entered into by
certain Trinity Shareholders and
the Company;
"Consideration Shares" new Ordinary Shares to be issued
to the Trinity Shareholders upon
Completion;
"Enlarged Group" or "New the Company and its subsidiaries
Trinity" (including Trinity) following the
Merger;
"Enlarged Share Capital" Existing Ordinary Shares and the
Consideration Shares;
"Existing Ordinary Shares" the existing 216,479,442 issued
Ordinary Shares;
"London Stock Exchange" London Stock Exchange plc;
"Ministry" Republic of Trinidad and Tobago
Ministry of Energy and Energy Affairs;
"Merger" the Company's proposed conditional
acquisition of Trinity;
"Ordinary Shares" ordinary shares of US$0.10 each
in the capital of the Company;
"Petrotrin" Petroleum Company of Trinidad and
Tobago Limited, a state owned oil
company in Trinidad and Tobago;
"Resolutions" resolutions to be proposed at the
Bayfield General Meeting;
"Rule 9 Waiver" waiver of the obligations of the
Trinity Shareholders to make an
offer for Bayfield under Rule 9
of the Takeover Code, to be sought
from the Takeover Panel;
"Takeover Code" procedures by which takeovers occur
as prescribed by the Takeover Panel;
"Takeover Panel" The Panel on Takeovers and Mergers;
"Transaction Agreement" share purchase agreement between
the Company and certain Trinity
Shareholders relating to the Merger;
"Trinidad" Trinidad, one of the islands making
up Trinidad and Tobago;
"Trinity" Trinity Exploration & Production
Limited, a company registered in
England and Wales with company number
SC396945;
"Trinity Shareholders" holders of Trinity Shares;
"Trinity Shares" issued ordinary shares of US$1.00
each in the capital of Trinity;
and
"UK" United Kingdom.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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