Mayan Energy announce acquisition of 12 further wells on producing Texan oil field and a successful raise of £850,000 via an oversubscribed placing.
Mayan (AIM: MYN), the AIM listed oil and gas company, is pleased to announce that it has entered into a conditional Sale and Purchase Agreement to acquire interests in 12 well bores, including seven additional vertical wells at the Stockdale Field in Wilson County, and three horizontal and two vertical Austin Chalk wells in Wilson and Gonzalez Counties, Texas (the “Acquisition”) for a total consideration of US$605,000 (the “Consideration”). Completion is conditional on the completion of full due diligence and Mayan and the Vendor entering into a Joint Operating Agreement (“JOA”). The Acquisition is in line with Mayan's objective to increase net production to 300 – 500 bopd by securing select under-exploited US onshore assets at attractive prices and enhancing production by applying the Company's in-house expertise and advanced technologies and techniques. The Company will update investors when the Acquisition has closed.
In addition, the Company also announces that it has raised £850,000 gross via a Placing with a limited number of high net worth investors (the "Placing") of 141,666,666 new ordinary shares of no par value each (the "Placing Shares") at a price of 0.6p per share (the "Placing Price") with a warrant for every 2 shares subscribed exercisable at 0.9p (the “Placing Warrants”). The Placing Price represents a discount of 11.8% to the last closing price on 22 June 2018. The net proceeds of the Placing will be used to fund the Consideration, new work-overs at Stockdale and Austin Chalk, and general working capital. The Placing was arranged by Mayan and Novum Securities Limited (“Novum”) who have been appointed as broker to replace Cornhill Securities following this Placing. In addition to the Placing, Mayan has also agreed to issue US$175,000 of new ordinary shares at a price of 0.7p per share in settlement of outstanding creditors ('Settlement Shares').
Acquisition of seven vertical Stockdale wells and five Austin Chalk wells
7 Stockdale Wells (Working Interest 60%/ Net Revenue Interest 45%)
Update on Forest Hill Field work programme
Eddie Gonzalez, Managing Director, said: "Whilst the SPA remains conditional on the agreement of the JOA and completion of due diligence, Mayan is confident of closing the Acquisition given its knowledge of the formations and work done to date on the Transaction. With the potential addition of these 12 new wells plus ongoing work programmes at Forest Hill and now at Zink Ranch we are well positioned to push daily production towards our target range of 300 to 500 net bopd. Our technical team has successfully demonstrated the capability to achieve excellent results by exploiting existing well bores using cutting-edge and proprietary tools and techniques. Thanks to today's agreement, our team now has many more opportunities to replicate this success. I expect Stockdale and the nearby Gonzalez County wells to form the backbone of our production, augmented by important contributions from Forest Hill and Zink Ranch.
“Importantly following my appointment, Mayan today is a streamlined organisation with low overheads. Together with our growing production base, we are able to deploy the majority of our new capital into the ground to add yet more production and in turn drive Mayan's profitability and future growth. We now have an inventory of wells with which to take the next major step forward in terms of building the scale an oil and gas company requires to be successful over the long term. With work progressing across our asset base, the summer and the fall of 2018 will not be short of high impact news flow.”
Sale and Purchase Agreement (“SPA”)
Mayan has conditionally entered into the SPA with Smart Bit LLC, a limited liability company incorporated in the US state of Wyoming. The terms of the SPA, which is subject to completion of full due diligence and entering into a Joint Operating Agreement (“JOA”), are as follows:
Mayan has raised gross proceeds of £850,000 through the placing of 141,666,666 Ordinary Shares at the Placing Price. The Placing is conditional on Admission and application will be made for the Placing Shares, which will rank pari passu with the existing Ordinary Shares, to be admitted to trading on AIM (the "Admission").
Mayan has issued 70,833,333 Placing Warrants to subscribers in the placing exercisable at 0.9p per ordinary share for a period of two years from the date of issue.
Mayan has issued 9,916,666 broker warrants exercisable at the placing price of 0.6p per ordinary share for a period of two years from the date of issue.
Issue of Equity to Creditors
Issue of 18,782,869 Ordinary shares to creditors to settle amounts owed and certain advisors at the Placing Price (the "Settlement Shares").
Total Voting Rights ("TVR")
In total 160,449,535 Ordinary shares will be issued at the Placing Price, and it is expected that Admission will become effective and dealings in the Placing and Settlement Shares will commence on or around July 6th 2018.
Following the issue of the 141,666,666 Ordinary Shares and the 18,782,869 Settlement Shares, the Company's issued share capital will consist of 1,383,385,465 Ordinary Shares with voting rights. No Ordinary Shares are held in treasury at the date of this announcement and therefore following the Admission, the total number of Ordinary Shares in the Company with voting rights will be 1,383,385,465.
The above total voting rights figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the Company.
Special note concerning the Market Abuse Regulation
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to Mayan and its securities.