Sinochem Seeks Acquisition of Emerald Energy

The Sinochem Board of Directors and the Emerald Board of Directors are pleased to announce the terms of recommended Proposals for an all cash acquisition by Sinochem Resources UK Limited of the entire issued and to be issued share capital of Emerald. The Offeror is a newly-incorporated indirect wholly-owned Subsidiary of Sinochem Corporation formed for the purpose of making the Proposals.

  • Under the terms of the Proposals, Emerald Shareholders will be entitled to receive 750 pence in cash for each Emerald Share, valuing the entire issued and to be issued ordinary share capital of Emerald at approximately £532.1 million.

The Offer Price represents a premium of:

  • 33.81 per cent. to the Closing Price of 560.50 pence per Emerald Share on July 10, 2009, the last Business Day prior to the announcement by Emerald that it had received an approach;
  • 11.11 per cent. to the Closing Price of 675.00 pence per Emerald Share on August 11, 2009, the last Business Day prior to this Announcement; and
  • 46.64 per cent. to the average Closing Price of 511.44 pence per Emerald Share over the three-month period ended on July 9, 2009.
  • The Emerald Board of Directors, which has been so advised by Harland Capital, considers the terms of the Proposals to be fair and reasonable. In providing its advice, Harland Capital has taken into account the commercial assessments of the Emerald Board of Directors.
  • Accordingly, the Emerald Board of Directors unanimously recommends that Emerald Shareholders vote in favour of each of the Resolutions to be proposed at the Meetings.
  • The Offeror has received irrevocable undertakings to vote in favour of the Proposals at the Meetings (and, if the Offeror exercises its right to acquire the Emerald Shares by means of a takeover offer, to accept any such Offer) from:
  • all of the Emerald Directors in respect of their entire beneficial holdings of Emerald Shares amounting, in aggregate, to 20,000 Emerald Shares, representing approximately 0.03 per cent. of Emerald's existing issued share capital;
  • Waterford in respect of its entire beneficial holding of Emerald Shares amounting to 18,456,755 Emerald Shares, representing approximately 29.45 per cent. of Emerald's existing issued share capital; and
  • Soyuzneftegas in respect of its entire beneficial holding of Emerald Shares amounting to 5,060,000 Emerald Shares, representing approximately 8.08 per cent. of Emerald's existing issued share capital.

In aggregate, the Offeror has received irrevocable undertakings to vote in favour of the Proposals in respect of 23,536,755 Emerald Shares, representing approximately 37.56 per cent. of Emerald's existing issued ordinary share capital.

  • The implementation of the Proposals will be subject to the conditions and certain further terms referred to in Appendix I to this Announcement and to be set out in the Scheme Circular and the accompanying Forms of Proxy.
  • It is intended that the Emerald Shares will be acquired by way of a Court-sanctioned Scheme of Arrangement. Further details are contained in the full text of this Announcement.
  • The Scheme Circular, containing further details of the Proposals (including notices of the Meetings), together with Forms of Proxy, will be issued to Emerald Shareholders, and, for information only, to persons with information rights and to participants in the Emerald Share Schemes, within 28 days of this Announcement, unless otherwise agreed with the Panel. Resolutions to approve the Proposals will be put to Emerald Shareholders at the Meetings. Subject to the approval of the Emerald Shareholders and the satisfaction or waiver of the other conditions, it is expected that the Scheme will become effective by the end of October 2009. Upon the Scheme becoming effective, it will be binding on all Emerald Shareholders, irrespective of whether or not they attended and/or voted at the Meetings (and if they attended and voted, whether or not they voted in favour).
  • Emerald offers Sinochem the opportunity to expand its exploration and production presence in Sinochem's focus areas of the Middle East and Latin America
  • Emerald's portfolio enhances Sinochem's existing reserves and production base and offers attractive growth potential in Syria and Colombia;
  • Emerald provides access to a talented management team and employee base; and
  • The transaction marks an important further step in Sinochem's strategy to become a leading diversified, global energy company.

Commenting on the Offer, Mr. Han Gensheng, President of the Offeror and Sinochem Corporation, said, "Sinochem is delighted to have agreed to acquire Emerald, which will increase our reserves and production in new geographies, diversifying our oil and gas assets further. Emerald's Syrian and Colombian assets have attractive growth potential and, by bringing Emerald into the Sinochem group, will reinforce our position in the Middle East and South America. The acquisition strengthens our operations and represents another step in our strategy of building a global energy company."

Commenting on the Proposals, Alastair Beardsall, Executive Chairman of Emerald, said, "We welcome today's recommended offer from Sinochem, which represents fair value for Emerald Shareholders and reflects the value of our business and assets. We believe Sinochem will continue to build on our successful track record to develop the business further and bring benefits for our employees and partners."


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