Further to the announcement on September 23, 2009, EnCore reported that Sale and Purchase Agreements have been signed with Egdon Resources plc for the sale of the group's onshore assets (onshore UK and onshore France) together with its interest in the Ceres gas field, in return for a material equity stake in Egdon.
The key points of the Sale are:
- The transfer to Egdon of EnCore's interests in nine UK and two French onshore licenses and an interest in the Ceres gas field on the UKCS
- The issue to EnCore and its subsidiaries at completion of the Sale of 39,200,000 ordinary shares in Egdon, which will equate to 29.998 percent. of Egdon's enlarged share capital on completion of its placing also announced today
- The payment by Egdon to EnCore of £100,000 upon completion of the sale of the subsidiary holding the French licenses
- The appointment of an EnCore nominee as a Non-Executive Director of Egdon, to take effect at the time of completion of the first Sale and Purchase Agreement. It is anticipated that the nominee will be Alan Booth, EnCore's Chief Executive Officer
- The establishment of a Technical Services Agreement under which EnCore will provide Egdon with technical, commercial and accounting services, to be charged on a day-rate basis
- The provision by EnCore to Egdon of a loan facility of up to £1.5 million, available for a two year period from completion of the transactions, at an interest rate of 10% or LIBOR plus 5% if greater
- The commitment by EnCore to retain its shareholding in Egdon for a minimum of 12 months from the date of admission to trading on AIM of the Egdon shares to be issued in consideration, with orderly market provisions for a further 12 months
The transfer to Egdon of EnCore's UK onshore licenses and interest in Ceres is subject to approval by Egdon shareholders at a general meeting to be held on April 6, 2010; the usual regulatory approvals from the Department of Energy and Climate Change (DECC); and approval from the joint venture partners on each license. In addition French regulatory consent will be required for the sale of the subsidiary holding Encore's French licenses.