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Attis Oil and GasLtd - Proposed Disposal of Austin Field

RNS Number : 3342T
Attis Oil and Gas Ltd
17 July 2020
 

Attis Oil & Gas Ltd / Index: AIM / Epic: AOGL/ ISIN: VGG6622A1057 / Sector: Oil and Gas

 

17 July 2020

 

Attis Oil & Gas Ltd ('the Company')

 

Proposed Disposal of Austin Field, being the Company's remaining operating asset,

and Notice of General Meeting

 

Attis today announces that it has agreed the sale of its remaining wholly owned and operated asset, the Austin Field, subject to shareholder approval (the "Proposed Disposal"). 

 

The Company has been conducting an asset sale strategy, as announced on 2 January 2020.   The Company announced on 11 February that it had sold its interest in the Bivins 115 Lease in the Red Cave formation in the Texas Panhandle for a consideration of $50,000 paid in cash.  The Company acquired the Bivins 115 Lease in October 2019 for a consideration of $23,000.

 

Further, the Company announced on 12 May 2020 that it had disposed of its subsidiary company, Northcote Cleveland LLC, which held the Zink Field Assets, for a consideration of $250,000 payable in cash in installments, and the disposal of its interests in the Fort Worth Field Assets for a nominal amount and the relinquishment of the bond associated with the field for the assumption by the acquiror of the  plugging and abandonment ("P&A") and tax liabilities on the 98 wells on the field. 

 

The Board has reviewed the recent performance of the Austin Field Assets.  Taking into account the level of ongoing maintenance cost required to keep the assets in production, coupled with recent volatility in global oil and gas prices, the revenue generated from the sale of oil and gas production at the Austin Field Assets, while potentially sufficient to pay the ongoing overheads of the Company, will not produce surplus cash to re-invest in new assets or additional production wells and therefore  the Board has concluded that a sale of these assets is in the best interests of Shareholders.  This will free up cash and management time to allow the Board to pursue other opportunities to build value for Shareholders. The cash proceeds of the Disposal will be aggregated with the Company's existing cash resources as set out in the announcement of 15 June 2020.

 

The Company's wholly owned subsidiary, Mayan Energy USA, LLC, has entered into a sale and purchase agreement, with Esparza Energy Holdings LLC, for the sale of its Austin Field Assets for a consideration of $200,000 payable in monthly instalments equal to 50% of the gross revenue generated  from oil and gas  sales over a period no longer than 36 months. Any amount not paid at the end of the term is owed as a lump sum to the Company.  Mayan Energy USA, LLC will retain a security interest in the wells and the production from the wells until the consideration is paid.  Failure to maintain the leases or a shut-in the wells that jeopardizes the leases provides Mayan Energy USA, LLC with the right to void the transaction. The only condition of completing the sale is the receipt of Shareholder approval, as further detailed below, and therefore completion is expected shortly following the General Meeting.

 

As at 30 June 2019, the book value of the Austin Field Assets was $742,000 and the assets made an operating profit of $17,043 for the 6 months ended 30 June 2020.   In accordance with AIM Rule 15, the Proposed Disposal will constitute a fundamental change of business of the Company. On Completion, the Company would cease to own, control or conduct all or substantially all, of its existing trading business, activities or assets.

 

Completion of the Proposed Disposal will be subject to Shareholder approval by way of an Ordinary Resolution at a General Meeting as it is deemed a fundamental change of business under the AIM Rules for Companies. The Disposal requires the approval of more than 50% of the Ordinary Shares voted at the General Meeting.

 

Following completion of the Proposed Disposal, therefore, the Company will become an AIM Rule 15 cash shell and as such will be required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 on or before the date falling six months from completion of the Proposed Disposal failing which, the Company's Ordinary Shares would then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM would be cancelled six months from the date of suspension should the reason for the suspension not have been rectified.

 

A notice convening a General Meeting is being finalised and will be posted to shareholders shortly; a further announcement will be made once this has been done.

 

**ENDS**

 

For further information visit www.attisog.com or contact the following:

 

Paolo Amoruso

Attis Oil & Gas Ltd

+ 1 713 869 1544

Roland Cornish

Beaumont Cornish Ltd

+44 20 7628 3396

James Biddle

Beaumont Cornish Ltd

+44 20 7628 3396

Duncan Vasey

Lucy WIlliams

 

Peterhouse Capital Limited

+44 20 7220 9792

 

 


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Quick facts: Attis Oil & Gas

Price: 0.0125

Market: AIM
Market Cap: £1.35 m
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