Ophir and Dominion have reached agreement on the terms of a recommended offer (the "Offer") to be made by Ophir to acquire the entire issued and to be issued share capital of Dominion.
- Recommended offer of 0.0244 New Ophir Shares for each Dominion Share.
- The Offer values the entire issued and to be issued share capital of Dominion and the Dominion Convertible Notes at £118.2 million ($186.3 million). The Offer values each Dominion Share at 5.9 pence per share based on the closing price of 242.2 pence per Ophir Share on October 12, 2011 (being the last business day prior to the date of this Announcement).
- The Offer represents a premium of approximately 64.2 percent. to the closing price of 3.6 pence per Dominion Share on 12 October 2011 (being the last business day prior to the date of this Announcement).
- The acquisition reinforces Ophir's position in its core East Africa play where it has led exploration activity resulting in three consecutive deepwater discoveries. Specifically, the Offer would:
- create the largest independent net deepwater acreage portfolio in the emerging and highly prospective hydrocarbon province of East Africa, consolidating Ophir's current portfolio of Blocks 1, 3, 4 (40 percent.) and East Pande (70 percent.) in Tanzania with the addition of Block 7 (80 percent.), offshore Tanzania and provide Ophir with entry to offshore Kenya through Block L-9 (60 percent.) and Block L-15 (100 percent.);
- enhance Ophir's operated portfolio in the region with the addition of three operated blocks, to complement Ophir's operated East Pande Block and joint activities with BG in Blocks 1, 3 and 4 in Tanzania;
- expand Ophir's active exploration program scheduled for the next 18 months with the potential to drill one or two additional wells on its operated acreage; and
- utilize potential operational, commercial and geological synergies to access full asset value.
- Ophir will remain well funded following this transaction, with the capability to accelerate exploration and appraisal programs across the enlarged portfolio.
- It is currently anticipated that the Offer will be implemented by means of a scheme of arrangement under the Companies Act of Bermuda.
- Ophir has also entered into agreements to acquire from Convertible Note Holders holding 86 percent. of Dominion's outstanding convertible notes for a cash consideration of $32.8 million, conditional upon completion of the Offer. Ophir is in discussions with one other Convertible Note Holder in respect of the purchase of the remaining convertible notes. In addition, Ophir has received irrevocable undertakings from certain Convertible Note Holders in respect of their direct and indirect interests in Dominion Shares to vote in favor of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of 421,553,527 Dominion Shares representing, in aggregate, approximately 26.5 percent of the Dominion Shares in issue.
- The Dominion Directors, who have been so advised by BofA Merrill Lynch and RBC Capital Markets, consider the terms of the Offer to be fair and reasonable. In providing their advice to the Dominion Directors, BofA Merrill Lynch and RBC Capital Markets have taken into account the commercial assessments of the Dominion Directors. Accordingly, the Dominion Directors intend unanimously to recommend that Dominion Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, as certain Dominion Directors and certain members of Dominion's senior management have irrevocably undertaken to do in respect of their own beneficial holdings of Dominion Shares representing, in aggregate, approximately 1.2 percent of the Dominion Shares in issue.
- The Offer is conditional, among other things, on the passing of resolutions by Dominion Shareholders and the sanction of the Court, the application for the New Ophir Shares to be admitted to the Official List being approved, the London Stock Exchange acknowledging that the New Ophir shares will be admitted to trading and the Dominion Directors not withdrawing, modifying or qualifying their unanimous recommendation of the Offer.
Commenting on the Offer, Roger Cagle, the Chairman of Dominion, said, "The proposed combination of assets provides Dominion's shareholders with an opportunity to be invested in the pre-eminent deepwater explorer in East Africa, one of the world's most exciting exploration plays. The exposure to Ophir's existing discoveries in Tanzania would de-risk the combined portfolio while maintaining significant upside exposure for both companies' shareholders. The Board of Dominion therefore believes that the Offer provides greater certainty of value to our shareholders than remaining independent against the background of challenging market conditions, the funding needs faced by Dominion and the inherent risks associated with frontier oil and gas exploration."
Commenting on the Offer, Nick Cooper, Chief Executive Officer of Ophir, said, "Ophir has been at the forefront of exploration efforts in deepwater Tanzania and has developed a detailed technical understanding of this emerging East Africa offshore play. The addition of Dominion's assets to our portfolio positions Ophir as the largest independent net deepwater acreage holder in East Africa with a portfolio of seven offshore blocks at high equity levels in highly prospective acreage offshore Tanzania and Kenya. There are significant potential geological, operational and commercial synergies in bringing these portfolios together and we are confident that the combined group will maximize value for shareholders from the exciting position we will command.
"East Africa is experiencing an upsurge in industry attention, partly as a result of Ophir's previous deepwater discoveries, with the involvement of many large oil and gas companies who are scheduled to drill high-impact exploration wells adjacent to the Ophir interests in the near-term.
"Ophir is strongly funded to deliver a sustained drilling program across its East African portfolio and will seek to accelerate its exploration activities across the region to include the newly acquired blocks."