Venture Production Makes Offer for Wham Energy

The Boards of Venture and WHAM have reached an agreement on the terms of a recommended cash and shares offer by Venture for the entire issued and to be issued share capital of WHAM.

Highlights

  • WHAM Shareholders will receive 19.7 pence in cash and 0.0338 New Venture Shares for each WHAM Share held, valuing:

- Each WHAM Share at 44.7 pence based on the average Closing Price of Venture Shares for the five business days immediately prior to the date of this announcement; and

- WHAM's existing issued share capital at approximately 14.2 million;

  • The Basic Consideration represents a premium of approximately 65.6 per cent. to the Closing Price of 27 pence per WHAM Share on the last business day immediately prior to the date of this announcement;
  • The Offer contains a Deferred Consideration Alternative that is linked to the future success of WHAM's currently identified exploration prospects and under which WHAM Shareholders may elect to receive 39.7 pence per WHAM Share (consisting of 19.7 pence in cash and 0.0270 New Venture Shares based on the average Closing Price of Venture Shares for the five business days immediately prior to the date of this announcement) and one Deferred Consideration Note for each WHAM Share held;
  • The WHAM Directors consider the terms of the Offer to be fair and reasonable and intend unanimously to recommend that WHAM Shareholders vote in favor of the Scheme Resolutions; and
  • Venture has received, in aggregate, irrevocable undertakings, including from all the WHAM Directors, or non-binding letters of intent to vote in favor of the Scheme Resolutions in respect of 20,436,667 WHAM Shares, representing approximately 64.4 per cent. of the existing issued share capital of WHAM.

The Offer will be implemented by way of a scheme of arrangement under section 425 of the Companies Act and in order to approve the terms of the Offer, WHAM Shareholders will need to vote in favor of the Scheme Resolutions to be proposed at two Shareholders' meetings (the Court Meeting and the Extraordinary General Meeting) to be convened and held in October 2007. It is anticipated that a Scheme Document containing the notice of the two Shareholders' meetings will be sent to WHAM Shareholders on or around 25 September 2007 following a hearing of the Court application to convene the Court Meeting. Venture has, however, reserved the right to implement the Offer by way of a Conventional Offer.

Commenting on the Offer, Michael Pavia, Chairman of WHAM, said:

"The Board of WHAM believes that the offer from Venture represents the best way for WHAM Shareholders to receive significant uplift in the value of their investment in WHAM in the immediate future. Furthermore, both the Venture shares offered as part of the consideration and the option of the Deferred Consideration Alternative provide WHAM Shareholders with continuing participation in the potential of WHAM's existing asset portfolio, which will benefit from Venture's considerable resources."

Commenting on the Offer, Mike Wagstaff, Chief Executive of Venture, said:

"Natural gas in the southern North Sea, where WHAM's assets are located, is an important part of Venture's business. While exploration is not Venture's core area of activity, our exploration is focused on relatively low risk prospects that are close to existing infrastructure thereby accelerating development in the event of success. We believe that the combination of WHAM's exploration prospects with Venture's capital, together with its drilling and development expertise will enable these prospects to be drilled more quickly and with more certainty."

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