Business
Scheme of arrangement
Scheme of arrangement.
About this update from Xtract Resources Plc
[{"type":"text","content":"\n Xtract Energy plc\n12 February 2007\n\n XTRACT ENERGY PLC\n ('Xtract')\n\n CAMBRIAN OIL & GAS PLC\n ('COIL')\n\n Scheme of Arrangement\n\n12 February 2007\n\nThe boards of Xtract and COIL are pleased to announce that they have reached\nagreement on the terms of a recommended proposal for COIL shareholders (other\nthan Xtract) to acquire shares in Xtract for shares in COIL by way of scheme of\narrangement under section 425 of the Companies Act 1985 (the 'Scheme'). The\nScheme requires approval by COlL shareholders (other than Xtract) and the\nsanction of the Court. Xtract currently holds approximately 64% of the current\nissued share capital of COIL.\n\nHighlights\n\n • Under the proposed terms of the Scheme, COIL shareholders will receive 9\n new Xtract shares for every 10 COIL shares. The closing mid market prices\n per share of Xtract and COIL on 9 February 2007 were 5.25 pence and 3.625\n pence respectively.\n\n • Based on these closing mid prices, the Scheme:\n\n • Values each COIL share at 4.725 pence; and\n\n • Values COIL at approximately £14.85 million (on an undiluted basis); and\n\n • Represents a premium to COIL shareholders of approximately 30.3%.\n\n • The directors of COIL unanimously recommend COIL shareholders to vote in\n favour of the Scheme.\n\nThe COIL board believes that COIL shareholders will benefit from:\n\n • Exposure to a more diversified asset portfolio;\n\n • Additional management expertise;\n\n • Removal of the multiple holding company discount on COIL's associated\n investments, especially its major investment in MEO Australia Limited (MEO);\n\n • A broader institutional shareholders base;\n\n • Improved access to funding, particularly in regard to COIL participating\n in any future major funding for MEO's planned drilling program, which starts\n later this year; and\n\n • Potential for increased liquidity through the exchange of their COIL\n shares for Xtract shares.\n\nThe Xtract board believes Xtract shareholders will benefit from:\n\n • Entry into the Australian Oil and Gas industry through COIL's holding in\n MEO;\n\n • COIL becoming a wholly-owned subsidiary which will allow it to\n consolidate 100% of the future cash flows from the operations of COIL;\n\n • The potential unlocking of value through the removal of the double\n holding company discount on CO...