Reabold, announces the conditional acquisition of an additional 16.665 per cent. interest in the onshore UK licence PEDL 183, which contains the West Newton field, from Humber Oil & Gas Ltd.

Highlights:

• Opportunistic acquisition of Humber's 16.665 per cent. interest in West Newton
• Acquisition conditional on, inter alia, Oil and Gas Authority approval
• Acquisition funded by cash consideration of £1.4 million and 350,000,000 Consideration Shares
• Economic interest in West Newton to increase to approximately 56 per cent. from approximately 39 per cent.
• Timely acquisition of Humber's interest is expected to allow the West Newton JV to progress the work programme optimally and unlock the value in the asset
• Agreed Discretionary Facility for up to £5 million to provide further financial flexibility and strength

Acquisition to increase investment in West Newton

Reabold has signed a conditional Sale and Purchase Agreement ("SPA") to acquire Humber's interest in the Licence. The consideration for the Acquisition of the additional 16.665 per cent. interest in the Licence will comprise of £1.4 million in cash (subject to adjustment) and the issue of 350,000,000 new ordinary shares of 0.1p each in the capital of Reabold.

On completion of the Acquisition, the Company's effective economic interest in the Licence will increase from approximately 39 per cent. to approximately 56 per cent. This interest will comprise a 16.665 per cent. direct interest and a 39.66 per cent. indirect interest via the Company's 59.48 per cent. shareholding in Rathlin Energy, operator of West Newton, which, in turn, holds 66.67 per cent. of the Licence. Completion of the SPA, and therefore the Acquisition, is conditional upon, inter alia, approval of the transfer of Humber's interest in PEDL 183 to Reabold by the Oil and Gas Authority.

Pursuant to the SPA, Humber has agreed to a lock up over 66.67 per cent. of the Consideration Shares for a period of three months from the date of admission to trading on AIM of the Consideration Shares and an orderly market restriction for a further period of three months once the lock-in period expires.

As announced on 11 November 2019, the West Newton field is estimated to contain a Base Case of 146.4 mmbbl of gross oil initially in-place and 211.5 bcf of gross gas initially in-place in the Kirkham Abbey formation. The Acquisition increases the Company's exposure to this potentially significant asset at an attractive transaction value. The Directors of Reabold believe the Acquisition will allow the JV to progress the work programme optimally and thereby unlock the value in the asset. 

Stephen Williams, co-CEO of Reabold, commented:
"We are delighted to have agreed to significantly increase our exposure to West Newton, which we believe could be a key driver of value for Reabold, at a highly attractive price. Our increased investment should facilitate the unlocking of the large potential value we see at West Newton and we look forward to the upcoming activity, including the drilling of the B-1 well where site construction is currently underway. Whilst current macro conditions are throwing up substantial challenges for the industry as a whole, the ability to act opportunistically to enhance shareholder value during low points in the cycle is a key aspect of the Reabold strategy.

"The decision to enter into the ELA is intended to provide an added layer of contingency to the Company's financial position. Given the current challenges to the operating environment, as well as volatile market conditions, we deemed it prudent to have additional headroom whilst we progress the activity at West Newton.

"We look forward to updating shareholders on the progress of the exciting work programmes across our portfolio."

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