Aurelian Oil & Gas. Niebieszczany-1, Poland. Unconventional gas is now attracting a lot of interest in Central Europe as governments there seek to address security of supply issues through the development of indigenous resources and international oil and gas companies look to apply their technology and experience from the North American shale plays. Significant acreage positions are being built up in coal-bed methane and shale by such companies as ExxonMobil, Chevron, ConocoPhillips, Talisman and Marathon. Tight gas plays are also benefiting from this revolution as the availability of technology and attractive fiscal terms now make them economic to develop in the region. Photo courtesy Aurelian

Warsaw, Poland and London, UK – November 12, 2012

Recommended Merger of San Leon Energy plc and Aurelian Oil & Gas plc to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006.

Summary

The Boards of San Leon and Aurelian are pleased to announce that they have reached agreement on the terms of a recommended merger pursuant to which San Leon will acquire the entire issued and to be issued share capital of Aurelian.

Aurelian Oil & Gas. Niebieszczany-1, Poland. Photo courtesy Aurelian

The Boards of San Leon and Aurelian believe that the asset portfolios of the two companies are highly complementary and that the Merger represents a compelling strategic and cultural fit which will provide significant benefits to shareholders in the Enlarged Company.

Aurelian Oil & Gas. Niebieszczany-1, Poland. Photo courtesy Aurelian

Under the terms of the Merger, Aurelian Shareholders will be entitled to receive:

1.3 New San Leon Shares for each Aurelian Share

Following the Merger becoming effective, based on the Merger Ratio of 1.3 New San Leon Shares for every Aurelian Share held:

• existing Aurelian Shareholders will hold approximately 34 per cent. of the Enlarged Company; and

• existing San Leon Shareholders will hold approximately 66 per cent. of the Enlarged Company.

Aurelian has focussed on exploration, appraisal and development activities in two core areas: 1 - Southern Permian Basin: The Rotliegendes and Zechstein plays in central and western Poland. 2 - Carpathian Basin: The Carpathian Fold Belt in southern Poland, Slovakia and central Romania. Courtesy of Aurelian

Based on San Leon's closing middle market price of 9.59 pence per San Leon Share on 9 November 2012, being the Business Day immediately prior to the date of this announcement, the Merger values each Aurelian Share at approximately 12.47 pence and the whole of the issued share capital of Aurelian at approximately £61.6 million and represents a premium of:

• 13.3 per cent. over the closing middle market price of 11.00 pence per Aurelian Share on 9 November 2012 (being the Business Day immediately prior to the date of this announcement); and

• 23.3 per cent. over the volume weighted average price of 10.11 pence per Aurelian Share in the one month period to 9 November 2012 (being the Business Day immediately prior to the date of this announcement).

Copy of Poland Concession Map July 2012. Source: Ministry of the Environment, Republic of Poland, July 2012’ Courtesy of Aurelian

The Boards of San Leon and Aurelian believe that the Enlarged Company has the potential to become a leading exploration and production company across Europe and North Africa.

Both San Leon and Aurelian hold significant acreage positions in Poland, and the Merger will make the Enlarged Group the largest foreign acreage holder in that country.

Map of concessions for “Shale gas” exploration as of 31-05-2012. Courtesy of Aurelian

The merger of the asset base and experienced management teams are expected to enable the Enlarged Group to optimise the portfolio and expedite the path to production.

San Leon Energy Geologists Photo courtesy San Leon Energy

The Boards of San Leon and Aurelian believe the Enlarged Group offers near term cash flow potential in Poland, while it will also possess high impact growth potential in a well-balanced conventional and unconventional exploration portfolio, particularly in Poland, Morocco and Albania.

San Leon, Siciny operations, Poland. Courtesy of San Leon Energy

Following implementation of the Merger, the Enlarged Company will be led by a management team comprising:

• Oisin Fanning as Executive Chairman,

• Paul Sullivan as Managing Director, and

• John Buggenhagen as Exploration Director.

San Leon, Siciny operations, Poland. Courtesy of San Leon Energy

The Board of the Enlarged Company will also include:

• John Conlin (the current Chairman of Aurelian),

• John Matthews (the acting Finance Director of Aurelian),

• Piotr Rozwadowski (a current Non-Executive Director of Aurelian),

• Ray King (the current Company Secretary of San Leon),

• Con Casey (a current Non-Executive Director of San Leon),

• Daniel Martin (a current Non-Executive Director of San Leon) and

• Dr. Jeremy Boak (a current Non-Executive Director of San Leon).

Carpathian Basin: The Carpathian Fold Belt in southern Poland, Slovakia and central Romania. Courtesy of Aurelian

Upon the Scheme becoming Effective each of Rowen Bainbridge, John Smallwood, David Prior, Dariusz Mioduski and David Walker have agreed to step down as Directors of Aurelian.

Carpathian Basin: The Carpathian Fold Belt in southern Poland. Prospect and lead map across Karpaty East and Karpaty West. Courtesy of Aurelian

It is intended that the Merger will be implemented by means of a scheme of arrangement of Aurelian under Part 26 of the Companies Act.

San Leon is a significant player in the Polish market. Courtesy of San Leon Energy

San Leon is a significant player in the Polish market. Courtesy of San Leon Energy

The Merger is conditional on, among other things, certain approvals by Aurelian Shareholders and the sanction of the Scheme by the Court.

Paul Sullivan gained substantial banking experience over 30 years, before joining San Leon Energy as Commercial Director. He became Managing Director in 2010. Photo courtesy San Leon Energy

It is currently expected that the Scheme Circular will be published later this month and that, subject to the satisfaction, or where relevant waiver, of all relevant Conditions, the Scheme will become Effective and the Merger completed in early 2013.

Piotr Rozwadowski, Independent Non-Executive Director at Aurelian. Photo courtesy Aurelian

The Aurelian Board intends unanimously to recommend that Aurelian Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting which are to be convened to approve the Merger, as they have irrevocably undertaken to do in respect of their own personal interests totalling 3,617,595 Aurelian Shares, representing approximately 0.73 per cent of the Aurelian Shares (as further described in Appendix III).

Dariusz Mioduski, Non-executive Director at Aurelian. Photo courtesy Aurelian

San Leon has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to effect the Merger at the General Meeting from Kulczyk Investments S.A., Toscafund Asset Management LLP and Lord Sainsbury in respect of an aggregate total of 207,866,958 Aurelian Shares, representing approximately 42.06 per cent. of the issued ordinary share capital of Aurelian.

San Leon, Siciny operations, Poland. Courtesy of San Leon Energy

In addition, a letter of intent has been received from Cheyne Capital Management (UK) LLP in relation to 23,598,420 Aurelian Shares representing approximately 4.77 per cent. of the issued ordinary share capital of Aurelian confirming its current intention to use its reasonable endeavours to persuade the owner of 23,598,420 Aurelian Shares, in relation to which it holds contracts for difference, to vote in favour of the Merger.

Southern Permian Basin: The Rotliegendes and Zechstein plays in central and western Poland. Courtesy of Aurelian

In aggregate, therefore, irrevocable undertakings and letters of intent to vote in favour of the Scheme at the Court Meeting and the resolutions to effect the Merger at the General Meeting have been received in respect of a total of 235,082,973 Aurelian Shares, representing approximately 47.56 per cent. of the ordinary share capital of Aurelian in issue.

Southern Permian Basin: The Rotliegendes and Zechstein plays in central and western Poland. Courtesy of Aurelian

The Aurelian Board has been advised by Greenhill and Oriel.

The Aurelian Board, which has been so advised by Greenhill (as the independent adviser for the purposes of the Takeover Code), considers the terms of the Merger to be fair and reasonable.
In providing its advice to the Aurelian Board, Greenhill has taken into account the commercial assessments of the Board.

At Aurelian we recognise that the depth, breadth and quality of our long term relationships with oil and gas companies and service providers are a key asset to our business. Our key national oil company relationships are with PGNiG in Poland and Romgaz in Romania. Courtesy of Aurelian

The San Leon Board has been advised by Fox-Davies Capital.

John Conlin, Chairman of Aurelian. Photo courtesy Aurelian

Commenting on the Merger, John Conlin, Chairman of Aurelian said:
"I am delighted to have reached this agreement with the San Leon Board. We followed a rigorous process to find the right way forward to unlock the value in the Aurelian portfolio. The Aurelian Board believes the proposed merger provides Aurelian with the right combination of technical and deal-making capability and exploration upside and maintains exposure for our shareholders in the material unconventional resources play in Poland."

Rowen Bainbridge, Chief Executive of Aurelian. Photo courtesy Aurelian

Rowen Bainbridge, Chief Executive of Aurelian stated:
"The proposed merger between Aurelian and San Leon creates a leading upstream position in Poland with complementary play types, capabilities and relationships covering both conventional and un-conventional resources. The integration of Aurelian and San Leon’s Permian Basin assets and the combined conventional exploration portfolio elsewhere in Europe and North Africa offer a high impact forward program over the next 12 to 18 months. I believe the value proposition in the deal for shareholders is compelling."

Oisin Fanning, Executive Chairman, San Leon Energy plc. Photo courtesy San Leon Energy

Commenting on the Merger, Oisin Fanning, Executive Chairman of San Leon said:
"A merger with Aurelian makes perfect sense for the shareholders of both companies. The combination of cash resources and the Polish asset base alone creates an obvious and exciting opportunity to realise substantial growth. Both management teams have built up a tremendous amount of experience and we can now employ that to pursue a best-of-portfolio near term value creation strategy. The combined entity offers shareholders material conventional and unconventional plays in stable and highly import-dependent countries."

Aurelian Oil & Gas. Niebieszczany-1, Poland. Photo courtesy Aurelian

Enquiries:

San Leon Energy plc
Oisin Fanning
+353 1291 6292
John Buggenhagen
020 36173913

Fox-Davies Capital Limited
(financial adviser and joint broker to San Leon)
Susan Walker
Daniel Fox-Davies
020 3463 5000

Westhouse Securities Limited
(nominated adviser to San Leon)
Richard Johnson
Antonio Bossi
020 7601 6100

College Hill
(public relations adviser to San Leon)
Rupert Trefgarne
Alexandra Roper
020 7457 2020

Plunkett PR
(public relations adviser to San Leon in Republic of Ireland)
Sharon Plunkett
+353 1 2844414

Aurelian Oil and Gas plc
Rowen Bainbridge, CEO
020 7629 7986

Greenhill & Co. International LLP
(joint financial and Rule 3 adviser to Aurelian)
Mark Bentley
Anastasia Fadeeva
020 7198 7400

Oriel Securities Limited
(joint financial adviser and broker to Aurelian)
David Arch
James Brodie
020 7710 7600

RFC Ambrian Limited
(nominated adviser to Aurelian)
Richard Morrison
020 3440 6800

College Hill
(public relations adviser to Aurelian)
Matthew Tyler
Catherine Wickman
020 7457 2020

2012 Planned Activity and 2013 Planned Activity. Courtesy of San Leon Energy and Aurelian

Qualified Persons


The technical information and opinions contained in this announcement relating to Aurelian have been reviewed by Dr John Smallwood BA (Cantab), MA, PhD (Cantab), FGS, C. Geol, Aurelian's Exploration Director who has 18 years of post-graduate experience in geoscience research, oil exploration and production.

Dr John Smallwood, Exploration Director, Aurelian. Photo courtesy Aurelian

He has reviewed and consented to the inclusion herein of such technical information and opinions.

The technical information and opinions contained in this announcement relating to San Leon have been reviewed by Dr John Buggenhagen who has over 15 years experience in the oil and gas industry.
Dr Buggenhagen has a Ph. D. And M.Sc. in Geophysics from the University of Wyoming and a B.Sc. in Geophysics from the University of Arizona.

Dr John Buggenhagen, Director of Exploration, San Leon Energy, based in San Leon's Warsaw office in Poland. Photo courtesy San Leon Energy

He is currently the Director of Exploration for San Leon and based in San Leon's Warsaw office in Poland and has reviewed and consented to the inclusion herein of such technical information and opinions.


Dublin office
San Leon Energy plc
3300 Lake Drive
Citywest Business Campus, Dublin 24
Ireland
Tel: +35 31 291 6292
Email: dublin@sanleonenergy.com  

London office
San Leon Energy plc
43 Grosvenor Street,
Mayfair, London W1K 3HL
United Kingdom
Tel: +44 20 3617 3913
Email: london@sanleonenergy.com  

Warsaw office
San Leon Energy plc
Mokotowska 1
00-640 Warsaw
Poland
Tel: +48 22 378 9700
Email: warsaw@sanleonenergy.com  


SOURCE:

San Leon Energy plc

http://www.sanleonenergy.com/home.aspx  

Aurelian Oil & Gas plc

http://www.aurelianoil.com/english.aspx  

Rekomendacja dla fuzji spółek San Leon Energy i Aurelian Oil & Gas

Zarządy spółek akcyjnych San Leon Energy i Aurelian Oil & Gas poinformowały o zamiarze przeprowadzenia fuzji obu spółek.

Obie spółki są notowane są na londyńskiej giełdzie papierów wartościowych i obie posiadają znaczące aktywa w zakresie poszukiwań węglowodorów w Polsce, w tym gazu łupkowego i konwencjonalnego oraz ropy naftowej.

Aurelian Oil & Gas. Niebieszczany-1, Poland. Photo courtesy Aurelian

Zgodnie z zawartą umową San Leon Energy ma przejąć całość udziałów w Aurelian Oil & Gas w zamian za wyemitowane akcje własne.
Za każdą akcję spółki Aurelian Oil & Gas jej akcjonariusze otrzymają 1,3 akcji San Leon Energy.

Po finalizacji przejęcia, obecni akcjonariusze San Leon Energy posiadać będą 66 proc. akcji powiększonej spółki, zaś pozostałe przejdą w ręce obecnych akcjonariuszy Aurelian Oil & Gas.

Przejęcie spółki Aurelian Oil & Gas przez spółkę San Leon Energy sprawi, że powstała w ten sposób spółka stanie się największym zagranicznym koncesjonariuszem poszukiwań węglowodorów w Polsce.

Aurelian Oil & Gas. Niebieszczany-1, Poland. On site. Photo courtesy Aurelian

"Połączenie obu spółek sprawi, że powstanie spółka posiadająca potencjał zarówno w zakresie konwencjonalnych, jak i niekonwencjonalnych zasobów węglowodorów w Polsce" - powiedział Rowan Bainbridge, prezes Aurelian Oil & Gas, który w chwili finalizacji przejęcia ustąpi z zajmowanego stanowiska.
Dodał również, że w ciągu najbliższych 12-18 miesięcy przeprowadzony zostanie znaczący program inwestycyjny na polskich aktywach spółki.

Spółki liczą, że uzyskanie niezbędnych zgód (m.in. akcjonariuszy obu spółek) i finalizacja transakcji będzie możliwa na początku 2013 roku.

Aurelian Oil & Gas. 2D seismic acquition on Karpaty East, Poland. Photo courtesy Aurelian

Aurelian Oil & Gas posiada w Polsce 16 koncesji poszukiwawczych w Wielkopolsce i Bieszczadach (z czego trzy bezpośrednio, a pozostałe poprzez spółki zależne).

San Leon Energy posiada udziały w 17 koncesjach poszukiwawczych na terenie całego kraju, z czego siedem zarejestrowanych jest na jej spółki zależne.



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