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From: Nigel
ArtDate: 5th September 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.114.152
Date: 09/09/06
Time: 16:13
5th September 2006
Rheochem Plc - Acquisition of Wimbledon Oil & Gas Ltd
News Item - Conduit PR
Assets include 10 North Sea licence blocks across the UK Continental shelf- approximate area: 2,000 km2 Licences include Athena oil discovery and a further 19 hydrocarbon prospects/leads Rheochem today announces that the Company has, in conjunction with Pacific International Management (“PIM”), agreed to acquire Wimbledon Oil and Gas Limited (“WOGL”) for the consideration of £7.31 million. Post completion Rheochem’s 100% owned subsidiary Lochard Energy Ltd (‘LEL”) will own one third of the issued shares in WOGL and the remaining two thirds will be owned by PIM.
On completion Rheochem will pay to the sellers of Wimbledon the sum of £2,436,667 being £774,667 in cash and Rheochem shares to the value of £1,662,000. The number of shares to be issued will be the average of the closing mid price for Rheochem shares for the five days prior to the day prior to completion. The shares will be admitted to trading on AIM at completion. The remaining £4, 873,333 will be paid in cash by PIM.
Rheochem will manage WOGL post completion on behalf of PIM. Completion is expected to take place on or around 15th September 2006.
This is the second oilfield acquisition for Rheochem’s subsidiary LEL and the directors believe it is consistent with the Company’s strategy of participating in oil and gas projects with significant upside potential that are at or near development. Rheochem believes it can offer substantial technical input into these projects by utilising the experience built up in its oilfield services divisions over the past 17 years.
LEL also owns a 55% working interest on 12 wells within the Blackwell Lease in Texas that are expected to put on production over the next three months.
Commenting today Haydn Gardner, CEO, of Rheochem said: “Rheochem has been providing services to the oil exploration sector since 1988. With this second agreement to take direct participation within an oil & gas asset we will work with our partners, using our significant in-house expertise, to successfully realise value from development projects.”
For more information:
Haydn Gardner, CEO Rheochem +44 (0) 20 7987 7511
Laurence Read / Leesa Peters Conduit PR +44(0) 20 7429 6666
Olly Cairns Corporate Synergy Plc +44(0) 20 7448 4400
OVERVIEW OF WOGL
WOGL has an interest in ten licence blocks (two partial blocks) located across the central North Sea Basin of the UK Continental shelf covering an area of approximately 2,000 km2. These are comprised of 4 traditional blocks with a 10% interest and 6 Promote blocks with a 100% operated interest.
The licence blocks include the Athena oil discovery and a further 19 prospects and leads in a variety of hydrocarbon plays.
Athena
WOGL has a 10% interest in licence P.1293 covering this discovery. The operator and 90% owner is Ithaca Energy.
The Athena discovery is on block 14/18b and is located immediately west of the Claymore and Scapa fields and therefore close to existing infrastructure. It has been independently reviewed by Gaffney Cline Associates and considered a probable development with low to mid case gross reserves estimated around 24.4 MMbbl oil. (2.4 MMbbl to WOGL)
Drilling of the next appraisal well on Athena is expected to begin by mid September 2006 and if successful Ithaca expects to put the field on production by 3rd quarter 2008.
Triton and Poseidon
WOGL has a 10% carried interest in the licences covering the blocks 13/16b, 13/17 and 13/18 which contain the majority of the Triton and Poseidon leads.
These leads were described by Ithaca in their 12 July 2006 release to the London Stock exchange as follows:
“Triton and Poseidon are the two largest 2D seismic mapped leads in Ithaca’s portfolio and are of a highly attractive stratigraphic play type, with the large upside potential within the prospective Upper Jurassic Buzzard and Lower Cretaceous fairways. Independent consulting firm Gaffney Cline and Associates (‘GCA’), in its report for the company’s recent public offering, has ascribed gross unrisked recoverable Prospective Resources of between 50 to 500 million barrels of oil with a best estimate of 150 million barrels to Triton and gross unrisked recoverable Prospective Resources of between 50 to 400 million barrels of oil with a best estimate of 100 million barrels to Poseidon.”
Ithaca recently completed an extensive 3D seismic group shoot covering the licences it holds on blocks 13/16b, 13/17 and 13/18 to reduce the uncertainty and mitigate risks associated with these leads.
Subject to the results of the data interpretation and rig availability, Ithaca has stated that it plans to drill a well on one of the blocks containing these leads in 2007.
Other Assets
WOGL was awarded the following Promote licences in the 23rd UK Seaward Licensing rounds and has a 100% interest:
P.1289 covering block 14/11 P.1393 covering blocks 12/15, 13/11, 13/12 & 13/13 P.1396 covering block 17/7
A Promote Licence gives the company 2 years from date of issue to attract technical, environmental and financial capacity to complete an agreed work program which includes the requirement to drill a well within the following 2 years. These Promote licences will expire on 22/12/2007 if an acceptable work program is not agreed.
The Consideration
On completion Rheochem will pay to the sellers of Wimbledon the sum of £2,436,667 being £774,667 in cash and Rheochem shares to the value of £1,662,000. The number of shares to be issued will be the average of the closing mid price for Rheochem shares for the five days prior to the day prior to completion. The shares will be admitted to trading on AIM at completion. The remaining £4, 873,333 will be paid in cash by PIM.
END
Laurence Read Conduit PR Ltd 3rd Floor 76 Cannon Street London EC4N 6AE United Kingdom Direct: +44 (0) 20 7429 6605 Office: +44 (0) 20 7429 6666 Mob: +44 (0) 7979 955 923 Fax: +44 (0) 20 7429 6699 laurence@conduitpr.com
www.conduitpr.com
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