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Altona Energy Plc - Open Offer to Raise up to £400,000

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN THE UNITED KINGDOM) OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL. PLEASE SEE THE SECTION ENTITLED "IMPORTANT NOTE" TOWARDS THE END OF THIS ANNOUNCEMENT.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ('MAR).  Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

11 March 2020

ALTONA ENERGY PLC

(“Altona” or “the Company”)

OPEN OFFER OF UP 6,153,846 NEW ORDINARY SHARES

AT 6.5 PENCE PER SHARE TO RAISE UP TO £400,000

The Company announces an Open Offer to raise up to approximately £400,000 (before expenses) through the issue of up to 6,153,846 new ordinary shares of 0.01p per share ("Ordinary Shares") in the Company at an issue price of 6.5 pence per share (the "Open Offer"), a discount of 32% to the closing price of 9.5 pence on 10 March 2020.The Company has today posted a Circular to shareholders which will be made available on the Company's website at www.altonaenergy.com.

For further information, please visit www.altonaenergy.com or contact:

Altona Energy plc
Qinfu Zhang, Executive Director
Philip Sutherland, Non-Executive Director

+44 (0) 7795 168 157
+61 (0)402 440 339 
Alfred Henry Corporate Finance Ltd (NEX Corporate Adviser)
Jon Isaacs / Nick Michaels


+44 (0) 20 3772 0021
Leander (Financial PR)
Christian Taylor- Wilkinson

 

+44 (0) 7795 168 157

Company Information

Altona is an exploration company focused on the evaluation, development and extraction of coal assets in South Australia though the process of in-situ gasification. 

The Company was admitted to trading on AIM on 10 March 2005 and was subsequently admitted to NEX on 1 February 2019.  A copy of its admission documents dated 4 March 2005 can be accessed on its website, www.altonaenergy.com.  This website is where items can be inspected under Rule 75 of the NEX Rules for Issuers, from 1 February 2019.

Introduction to the Open Offer

We are writing to you to offer you the opportunity to be part of Altona’s next phase of its operational development in South Australia, by subscribing to a new issue of shares in the Company. The Company is looking to raise up to £400,000 to acquire a new mining licence and to pay for exploration costs and working capital for the next 12 months.

When considering the options to raise new capital, the Board unanimously agreed that its long-term, loyal shareholders should take preference over seeking funding from new sources. Therefore, the Company is making this initial, direct approach to its shareholders, preventing further dilution in an already much diluted stock.

The Company is currently short of cash and will not be able to purchase the mining licence, nor probably to continue trading on NEX Exchange Growth Market beyond June 2020, without raising funds. The Board has calculated that a minimum cash requirement of £250,000 is needed to enable it to acquire the tenement licence, appoint its mining engineers in Australia to start exploration work (of which there are more details below) and provide working capital for 6 months. However, a more suitable capital raise of £400,000 will provide sufficient funds for the Company to trade for the next 12 months and move past the initial exploration stages. However, should the Open Offer not be successful and the Company fails to raise the minimum requirement, the Board will need to consider the viability of the Company going forward and consider all options in this regard.

The events of 2018 saw a heavy toll on the share price, leaving the value of Altona at a fraction of its market capitalisation by the end of that year. Other poor decisions made during 2018, such as the 1000 to 1 share consolidation and the re-aligned business strategy to pursue an investment in pyrolysis has caused long-term damage to the market sentiment and reputation to the Company.

However, we now believe, as a Board, that we have a credible strategy in place, which will allow a steady recovery of the share price.

As announced on 21 November 2019, the Company has entered into exclusive negotiations with a third party, Ahava Energy PTY Ltd, to acquire a new mining licence in South Australia. This licence, a Petroleum Exploration Licence Application (“PELA”) will allow the Company to commence exploration into a viable In-Situ Gasification (“ISG”) project (also known as Underground Coal Gasification, or UCG). In 2015, when the Company was at the cusp of starting a similar project, it was informed that it did not own the necessary PELA over its three tenements, which put a halt to a similar project.

The new tenement covered by the PELA is close to the Company’s historic Arckaringa tenements and covers 5,000 sq kms, twice the size of the existing tenements. The tenement is divided into two areas; a smaller northern area which overlaps the Company’s historic Exploration Licences at Westfield and Murloocoppie to the north and west, respectively, and a significantly sized southern area (over 4,000 sq km), of which 50% crucially sits outside the environmentally sensitive Great Artesian Basin, meaning issues, caused by the natural aquifer of the basin, will be substantially less.

Long-term shareholders will know that a significant amount of exploration work has been carried out over the past 15 years in the western portion of Murloocoppie and the northern portion of Westfield, where the main north-south railway line is situated. This data will be utilised within the initial desk top report to be conducted by WSP Australia (“WSP”), the Company’s mining consultant.

The more significant and potentially more rewarding southern area of the PELA, whilst never having been tested for deep coal deposits suitable for the ISG process is, however, situated between other major coal bearing tenements, providing enough evidence for WSP to warrant further investigation. Should this exploration be successful (i.e. by finding at least two coal bearing deposits between 100m and 1,400m – the depth most suitable for ISG), the Company will look to quickly move towards obtaining the necessary permits and funding to start a test production facility, within 2-3 years.

It has been suggested by WSP that the longer term plan could be for the Company to create an “Energy Precinct”, utilising wind and solar energy to reduce costs for the extraction process, leading to the supply of power (as well as chemical by-products, such as liquid ammonia, hydrogen, ethanol and other synthetic fuels) to the South Australian and broader markets.

The Board has spent 2019 removing unnecessary costs from the Company, by streamlining the board (to three members, following the removal and resignation of four directors in January 2019) and by reducing its corporate footprint by closing its offices in London and Australia (until such a time when they are needed again). We are now dedicated solely to the ISG project, but will, in time, look at other resources investments which could bring in an established revenue stream into the Company more quickly. With that in mind, we are speaking with potential new board members, both in the UK and Australia and who have experience in the mining sector. Ideally, we will appoint a new director in Australia who will have the responsibility for the day-to-day running of the ISG project, as well as a new UK director to help with the corporate governance of the Company’s stock market listing.

The Company is currently listed on the NEX Exchange Growth Market (“NEX”), which was the only logical choice available to Altona when the Company’s NOMAD resigned in November 2018 and the Company had to leave AIM.

NEX announced on 4 March 2020 that it had been acquired by Aquis Exchange Plc (AIM: AQX), the pan-European exchange services group, which utilises dynamic trading technology, investor networks and its European reach to improve liquidity and investor access in its constituent stocks. However, the Board recognises the unsuitability of this exchange for Altona’s long-term ambitions and will look to re-acquire a London Stock Exchange listing (either by re-admitting to AIM or to list on the Standard Market segment of the LSE) at some point in the future, which we believe will provide better liquidity for the shares, allowing greater freedom of share trading.

Finally, we are aware of the criticism aimed at companies who raise capital, usually at a large discount to the price, with new investors, rather than offering loyal shareholders the opportunity to participate. We are not such a Company and, as such, welcome your further support in Altona. Your Board is fully supportive of this new project, with all three Directors participating in the Open Offer, and looks forward to delivering rewards to shareholders in the future.

Use of proceeds

Assuming full take up under the Open Offer, the proceeds received by the Company will be approximately £400,000 (gross of expenses), and which will be used as follows:  The Company is required to pay AUD200,000 (approx. £105,000) for PELA 517, with an initial up-front payment of AUD100,000, followed by two further tranches to settle the balance within three months. WSP has estimated costs for the initial two phases of exploration will be in the region of AUD200,000.

The Company is currently looking for new Directors to join the Board, in the UK and Australia. It also engages with a number of advisers during its normal course of being a mining exploration company with a UK stock market listing. Fees and other costs associated with these roles will need to be met during this phase of activity as well as the usual working capital requirements for the next 12 months. 

The Board believes that a minimum capital requirement of £250,000 will allow it to acquire the tenement licence and instruct WSP to commence its exploration work. However, at this level of fund raise, the Board believes it would need to return to the market to seek further funding within the next six months.

Should the Open Offer deliver a higher level of interest from shareholders, resulting in a larger commitment of capital than the £400,000 full take-up, the Board will then decide whether to issue more shares and take a higher amount in order to fulfil shareholder demand.

Further information on PELA 517 and In-Situ Gasification

The Altona Energy (the Company) Board of Directors (BOD) has been researching suitable resource development opportunities in Australia that if progressed appropriately would deliver revenues to the Company. This has included revisiting the Company’s three Minerals Exploration Licences (MELs) in the Arckaringa Basin, South Australia. In respect to these, given their location in the environmentally sensitive Great Artesian Basin (GAB) and the consequential very significant costs required to bring a coal development to the point of production, are considered by the BOD, to be beyond the capacity and resources of the company. The BOD has, as a consequence and also in consideration of the statutory holding costs, decided to relinquish the MELs.

The BOD’s research has included the reconsideration of an In-situ Gasification Project. Shareholders and others will recall the Company trying to progress such a project on one of the MELs in the Arckaringa Basin in South Australia but was unable to gain the required licence pursuant to the South Australian Petroleum and Geothermal Energy Act. The BOD is now pleased to report that the Company is in the position to acquire an area of land (a petroleum tenement) in South Australia, that subject to further investigation, holds some promise as being capable of hosting a commercially profitable In-situ (Coal) Gasification (ISG) project.

The predominant product gases from ISG are methane, hydrogen, carbon monoxide and carbon dioxide. Alternatively, the gas output can be used to produce synthetic natural gas, or hydrogen and carbon monoxide can be used as a chemical feedstock for the production of fuels (e.g. diesel), fertilizer, explosives and other products. The gas can be used for electricity generation which will be discussed later in this statement. The process of ISG enables the development of deep coal resources where open-cut or underground mining are identified as not feasible or uneconomic. This could include coal seams that are too deep, low grade, or have a thin stratum profile. The important criteria for a viable ISG mine is the scale of the coal deposit; coal must be at a depth of greater than 100 metres (up to 1400 metres); a coal seam with a thickness of more than 3 metres; Ash content of less than 60%; minimal discontinuities; coal seam isolated from valued water aquifers; and overburden that has suitable properties.

ISG is an industrial process considered to require less capital and lower operating costs than traditional mining and is a term applied to a number of different techniques that can produce a fuel or synthesis gas mixture from coal seams. Since the experimental research on ISG started in the 1930s there has been a progressive change in the technologies and improvement in operating methods to increase efficiency of operations and reduce environmental impact.

ISG converts coal into product gas while still in the coal seam (in-situ). While there are a variety of designs for ISG, essentially gas is produced and extracted through wells drilled into the unmined coal seam. Injection wells are used to supply the oxidants (air, oxygen) and steam to ignite the underground combustion process. The product gas is brought to the surface in a controlled manner through separate production wells drilled from the surface. As the coal face burns (underground) and the immediate area is depleted, volumes of oxidants injected are controlled by the operator.

The subject tenement to be acquired is covered by Petroleum Exploration Licence Application (PELA) 517 which is a very large area comprising approximately 5,000 square kilometres and extending across two blocks of land, the Main Block (the larger of the two) and a North Eastern Block. As with our MELs, PELA 517 sits within the Arckaringa Basin, a highly prospective coal province. Following the Company’s own exhaustive research and enquiries, WSP Australia Pty Ltd (WSP), a multinational engineering firm was commissioned by the Company to undertake a preliminary assessment of the tenement to determine if the findings of the company’s research was robust enough to warrant further investigation. Pleasingly, WSP subsequently reported, based on their preliminary assessment, that there was good reason to undertake a more detailed assessment of PELA 517.  

WSP reported that earlier exploration drilling by others had shown that PELA 517 had potential for large coal deposits close to the surface. Coal at depth however is a requirement for ISG. While some of the available seismic analysis available to WSP indicted the possibility of coal at depth in the North-Eastern Block, this Block has been discounted as an area of interest as the area falls within the environmentally sensitive GAB. The southern half of the Main Block is outside of the GAB and located on the eastern extremity of the Officer Basin, a largely unexplored but known hydrocarbon bearing basin. Notwithstanding this the area has been subject to extensive exploration and no direct evidence of coal has been found.

The immediate primary area of interest for the Company is therefore the northern part of the Main Block.  This area is still within the GAB but outside of the primary sensitive zone. Drilling reports show evidence of coal in several sections. Encouragingly, there is seismic data that may be interpreted as identifying coal seams at depths from 100 to 1300 metres. WSP have recommended the progression of an early Stage 1 desktop review of all of the available data in the PELA 517 with the objective of preparing a staged programme for a more detailed geological and hydrological investigation should sufficient coal at depth be identified in locations where there is potential for an ISG project.

Subject to funding, the BOD is desirous of commissioning this early Stage 1 review, and then to escalate the exploration effort subject to additional favourable information becoming available. Should a suitable ISG project target area be defined, a mine plan will be developed together with the identification of the appropriate ISG mining technology. A wide variety of coals are amenable to the ISG process and coal grades from lignite through to bituminous may be successfully gasified. A great many factors are taken into account in selecting appropriate locations for ISG, including surface conditions, hydrogeology, lithology, coal quantity, coal depth and quality. The project economics including the investment required and return on this investment will be progressively established. One body of work will inform the next.

ISG is currently a proven technology with companies developing projects in Australia (South Australia), UK, Hungary, Pakistan, Poland, Bulgaria, Canada, United States, Chile, China, Indonesia, India, South Africa, Botswana and Russia. There is an estimated 60 projects in development around the world. The driver for many ISG projects producing electricity in particular is energy security. South Australia has an energy deficit. With the support of the South Australian Government, the state currently hosts an ISG project which is successfully being progressed by Leigh Creek Energy Limited. This project is located in a remnant open-cut coal mine some distance to the south of PELA 517.

Our ISG project economics will benefit by the relatively close proximity of PELA 517 to the main Adelaide-Darwin railway line and highway. This is a ready export route and avoids the costs associated with constructing the extensive infrastructure necessary to transport product to market which in some projects exceeds the cost of a mining operation. The location of PELA 517 is also very likely to be suitable for the establishment of a very large scale solar farm. WSP have suggested to the Company that the BOD consider the development of an ‘energy precinct’ to include ISG, solar, and hydrogen production. ISG gas output may be combusted for electricity production on site via a combined cycle power plant - an assembly of heat engines that work in tandem from the same source of heat, converting it into mechanical energy. On land, when used to make electricity the most common type is called a combined cycle gas turbine (CCGT). This electricity could power the ISG project, and given the energy deficit in South Australia, potentially be sold to electricity wholesalers and retailers in that state and the Northern Territory, and also sold to the many mining operations in the region.

The BOD believes the Company now has a project, subject to completing the acquisition of the PELA, and further geological and hydrological investigation, with very significant potential and financial upside.

WSP - Proposed Initial Working Programme

Stage 1: up to 3 months from commencement. Cost approx AUD30,000

Desktop review of information available – confirm preliminary assessment

  • Undertake review by senior coal geologist on likelihood of coal presence in the area/s identified
  • Review the potential for extensive coal in the two areas identified in the main block using available data
  • Review seismic information available – identify any correlation with any hole data in both areas
  • Identify possible extent of coal field(s), if any
  • Prepare very preliminary report on potential cost and benefit of a geological investigation
  • Undertake all relevant hydrogeological studies to determine water risks and opportunities

Stage 2: up to 6 months from end of Stage 1. Cost up to AUD150,000 (dependent on initial findings)

  • Small seismic programme in the east of the Main Block, with extension running approx 5 km on orthogonal lines – total 40km line seismic 
  • Use seismic results to plan to drill 2-4 holes, coring at least 2 holes
  • Correlate seismic results to prepare a coal resource potential report
  • Prepare a report on the potential to develop the resource, including a forward drilling and testing work programme and budget

Stage 3: up to 1 year from end of Stage 2: Cost between AUD500,000 to AUD2 million

  • Bring together an integrated project roadmap for the development of an ISG / mining / energy precinct for PELA517
  • Exploration drilling programme, to define the target area for the ISG project
  • Pre-feasibility Study

Shareholder Conference Call – 11am on 18 March: Dial-in Details and Format

The Directors of Altona, along with a representative from WSP will host a Shareholder Conference Call on 18 March at 11am GMT to address any questions that shareholders may have on the ISG Project and investment into Altona. The call will last not longer than 1 hour.

The meeting will be in the form of a Q&A and it is suggested that participants keep their phones on mute, whilst listening and only turn this off, if they have a question to ask.

Conference Call PIN:   70891913

Telephone Numbers:

UK Mobile:                    83000

UK Landline:                 0843 373 0843

Australia:                      02-8999 0964

China:                          010-5387 6269

France:                         0821-618272

Germany:                     01803-127 127

Worldwide Mobile:         +44 843 373 0999

If you would like to attend the conference call, but live in a country not listed above, please contact Christian Taylor-Wilkinson via email on ctw@leanderPR.com prior to 4pm on 17 March, to receive your phone number.

Details of the Open Offer

The Company is proposing to raise up to £400,000 (before expenses) pursuant to the Open Offer.

The Directors recognise the importance of pre-emption rights to Shareholders and consequently up to 6,153,846 Open Offer Shares are being offered to each existing Shareholders by way of the Open Offer. The Open Offer provides every Qualifying Shareholders with an opportunity to participate in the Open Offer by subscribing for their respective Basic Entitlements and Excess Entitlements.

Qualifying Shareholders may subscribe for Open Offer Shares in proportion to their holding of Existing Ordinary Shares held on the Record Date. Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares as an Excess Entitlement, up to the total number of Open Offer Shares available to Qualifying Shareholders under the Open Offer. Shareholders are entitled to apply for shares in excess of their pre-emption right and any shares left unallocated on the pre-emption round will be offered to those shareholders expressing their interest in the shares remaining.

The Open Offer is conditional on the following:

Admission of the Open Offer Shares to trading on NEX becoming effective on or before 8.00 a.m. on 3 April 2020 (or such later date and/or time as the Company may decide, being no later than 17 April 2020).

In the event that the Open Offer does not become unconditional by 11.00 a.m. on 17 April 2020 the Open Offer will lapse and application monies will be returned by post to the Applicant(s) at the Applicant’s risk and without interest, to the address set out in the Application Form, within 14 days thereafter.

The Open Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission.

Basic Entitlement

Subject to the fulfilment of the conditions set out below and in Part IV of this document, Qualifying Shareholders are being given the opportunity to subscribe for Open Offer Shares under the Open Offer at the Issue Price, payable in full on application and free of all expenses, pro rata to their existing shareholdings on the following basis:

1 Open Offer Share for every 1 Existing Ordinary Share

held by Qualifying Shareholders and registered in their name at the Record Date.

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and

any fractional entitlements to Open Offer Shares will not be allocated and will be disregarded. Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Basic Entitlement.

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility.

Shareholders who are not Qualifying Shareholders may not participate in the Open Offer, unless the minimum requirement is not met and the Offer is opened up to the general market.

All Qualifying Shareholders who hold Existing Ordinary Shares on the Record Date will receive an Open Offer Entitlement and may also apply for Excess Shares pursuant to the Excess Application Facility.

If you have sold or otherwise transferred all of your Ordinary Shares after the ex-entitlement Date, you are not entitled to participate in the Open Offer.

The Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear’s Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that under the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer.

Application has been made for the Open Offer Entitlements of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements will be admitted to CREST on 13 March 2020. The Open Offer Entitlements will also be enabled for settlement in CREST on 13 March 2020 to satisfy bona fide market claims only. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part IV of this document and for Qualifying Non-CREST Shareholders on the Application Form.

To be valid, Application Forms (duly completed) and payment in full for the Open Offer Shares applied for must be received by no later than 11.00am on 31 March 2020.

Qualifying Non-CREST Shareholders will receive an Application Form which sets out their maximum entitlement to Open Offer Shares as shown by the number of Basic Entitlements allocated to them.

All Qualifying Shareholders who hold Ordinary Shares on the Record Date will receive an Open Offer Entitlement and may apply for additional Open Offer Shares pursuant to the Excess Application Facility.

The Open Offer is restricted to Qualifying Shareholders in order to enable the Company to benefit from exemptions from securities law requirements in certain jurisdictions outside the United Kingdom.

Excess Application Facility

The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Basic Entitlements in full, to apply for Excess Entitlements to the extent that if a Qualifying Shareholder has taken up its Basic Entitlements in full and applies for and is allocated the maximum Excess Entitlements it will suffer no dilution as a result of the Open Offer. Qualifying Non-CREST Shareholders who wish to apply to acquire more than their Basic Entitlements should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess Entitlements credited to their stock account in CREST and should refer to paragraph 3(ii) of Part IV of this document for information on how to apply for Excess Entitlements pursuant to the Excess Application Facility. Applications for additional Open Offer Shares through the Excess Application Facility will be satisfied only and to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their Basic Entitlements and may be scaled back at the Company’s absolute discretion.

Once subscriptions by Qualifying Shareholders under their Basic Entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether or not to meet any applications for Excess Entitlements in full or in part and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all. Applications will be made for the Basic Entitlements and Excess Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that Open Offer Shares issued pursuant to subscriptions by Qualifying Shareholders exercising their Basic Entitlements and Excess Entitlements will be admitted to CREST at 8.00 a.m. on 3 April 2020. Such Open Offer Shares will also be enabled for settlement in CREST on 3 April 2020. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Qualifying Non-CREST Shareholders will receive an Application Form which sets out their entitlement to Open Offer Shares as shown by the number of Basic Entitlements allocated to them. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded.

Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Basic Entitlements and Excess Entitlements on 13 March 2020. Qualifying CREST Shareholders should note that although the Basic Entitlements and Excess Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of their Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued and any outstanding Basic Entitlements will lapse.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part IV of this document. For Qualifying Non-CREST Shareholders, completed Application Forms, accompanied by full payment, should be returned by post, or by hand (during normal business hours only) to, Share Registrars Ltd, The Courtyard, 17 West Street, Surrey, GU9 7DR, so as to arrive as soon as possible and in any event so as to be received no later than 11.00am on 31 March 2020. For Qualifying CREST Shareholders the relevant CREST instructions must have been settled as explained in this document by no later than 11.00am a.m. on 31 March 2020.

Action to be taken in respect of the Open Offer

If you are a Qualifying Non-CREST Shareholder you will be sent an Application Form which gives details of your Basic Entitlement (i.e. the number of Open Offer Shares available to you). If you wish to apply for Open Offer Shares under the Open Offer, you should complete the Application Form in accordance with the procedure set out at paragraph 3(i) of Part IV of this document and on the Application Form itself and post it, or return it by hand (during normal business hours only), together with payment in full in respect of the number of Open Offer Shares applied for to The Share Registrars Ltd, The Courtyard, 17 West Street, Surrey, GU9 7DR, so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 31 March 2020, having first read carefully Part IV of this document and the contents of the Application Form.

If you are a Qualifying CREST Shareholder, no Application Form will be sent to you. As a Qualifying CREST Shareholder you will receive a credit to your appropriate stock account in CREST in respect of your Basic Entitlement. You should refer to the procedure set out at paragraph 2 and paragraph 3 (ii) of Part IV of this document.

The latest time for applications to be received under the Open Offer is 11.00 a.m. on 31 March 2020. The procedure for application and payment depends on whether, at the time at which application and payment is made, if you have an Application Form in respect of your Basic Entitlement or your Basic Entitlement has been credited to your stock account in CREST. The procedures for application and payment are set out in Part IV of this document. Further details also appear on the Application Form which has been sent to Qualifying Shareholders. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Open Offer.

If you are in any doubt as to the procedure for acceptance, please contact Share Registrars Ltd on 01252 821 390. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 am5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Share Registrars cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. The helpline is open between 9.00 a.m. to 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Share Registrars cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

If you are in any doubt as to the contents of this document and/or the action you should take, you are recommended to seek your own personal financial advice from an independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) if you are in the UK or, if you are outside the UK, from an appropriately authorised independent financial adviser, without delay.

The Company already has the authority to issue 6,153,846 Ordinary Shares as part of the Open Offer and will not require any further approvals from Shareholders in order to complete the Open Offer.

Recommendation

The Directors consider that the Proposals are in the best interests of the Company and its Shareholders as a whole and encourage shareholders to take up their Excess Entitlement. The Directors have confirmed their participation in this Open Offer.

OPEN OFFER STATISTICS

Issue Price per New Ordinary Share                                                               6.5 pence*

Open Offer Basic Entitlement                                            1 Open Offer Shares for every

1 Ordinary Shares on the

Record Date

Number of Ordinary Shares in issue as at the date of this Document                 1,602,434

Number of Ordinary Shares in issue as at the Record Date                               1,602,434

Number of Open Offer Shares to be issued pursuant to the Open                      6,153,846

Offer to raise £400,000

Maximum Enlarged Ordinary Share Capital on Admission                                 7,756,280

Gross proceeds of the Open Offer                                                            up to £400,000

Estimated cash proceeds of the Open Offer receivable by the Company (net            up to £380,000

of expenses and assuming full allocation)

Percentage of the Enlarged Ordinary Share Capital of the Company that the        384 per cent.

Open Offer Shares will represent

ISIN – Open Offer Basic Entitlements                                                    GB00BKV4RQ57

ISIN – Open Offer Excess Entitlements                                                 GB00BKV4RR64

Notes

  • *Share Price on 10 March is 9.5 pence, representing a discount of 32%                    
  • Statistics are prepared on the basis that no Ordinary Shares will be issued following the date of this document and before the completion of the Open Offer

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

2020

Record Date and time for entitlements under the Open Offer                 6.00pm on 10 March

Announcement of the Open Offer                                                        4.30pm on 11 March

Publication of this document and Application Forms to Qualifying                           12 March

Shareholders

Ordinary Shares marked ‘ex’ entitlement by the NEX Exchange            8.00am on 11 March

Basic Entitlements and Excess Entitlements credited to CREST accounts of           13 March

Qualifying CREST Shareholders

Shareholder Meeting and Q&A, via conference call to speak with Directors         11am on 18 March

Recommended latest time and date for requesting withdrawal of
Basic Entitlements and Excess Entitlements from CREST

Latest time and date for depositing Basic Entitlements and
Excess Entitlements into CREST
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)

Latest time and date for receipt of completed Application Forms from Qualifying Shareholders and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)
4.30pm on 23 March


3.00pm on 24 March

3.00pm on 25 March


11.00am on 31 March 

Expected date of Admission and commencement of dealings of Open        8.00am on 3 April

Offer Shares

Expected date for CREST accounts to be credited with Open Offer Shares 8.00am on 3 April

Share certificates in relation to Open Offer Shares (where applicable)                  By 10 April

dispatched by

Save for the date of publication of this document, each of the times and dates above are subject to change. Any such change, including any consequential change in the Open Offer Statistics above, will be notified to Shareholders by an announcement on a Regulatory Information Service. All times are London times and each of the times is subject to change.

DEFINITIONS

The following words and expressions shall have the following meanings in the document, unless the context otherwise requires:

“Act”                                         the UK Companies Act 2006, as amended;

“Admission”                              admission of the Open Offer Shares (to the extent subscribed for pursuant to the Open Offer) to trading on NEX becoming effective in accordance with the NEX Rules;

“Applicant”                                a Qualifying Shareholder or a person entitled by virtue of a bona fide market claim who lodges an Application Form under the Open Offer;

“Application Form”                   the application form to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer;

“Articles”                                  the articles of association of the Company for the time being;

“Basic Entitlement(s)”               the entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer as described in Part IV of this document;

“Board” or “Directors”              the current directors of the Company, whose names are set out on page 7 of this document;

“Business Day”                         any day which is not a Saturday, Sunday or a public holiday in the UK;

“certificated” or “in certificated

Form”                                        not in uncertificated form (that is, not in CREST);

“Company” or “Altona”             Altona Energy Plc, a company registered in England and Wales with registered number 05350512;

“CREST”                                   the computerised settlement system to facilitate the transfer of title of shares in uncertificated form operated by Euroclear UK & Ireland Limited;

“CREST Manual”                       the compendium of documents entitled CREST Manual issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, CREST Rules, CCSS Operations Manual and the CREST Glossary of Terms;

“CREST Member”                      a person who has been admitted to Euroclear as a member (as defined in the CREST Order);

 “CREST Participant”                a person who is, in relation to CREST, a participant (as defined in the CREST Order);

“CREST Payment”                    shall have the meaning given in the CREST Manual issued by Euroclear;

“CREST Sponsor(s)”                 a CREST Participant admitted to CREST as a CREST sponsor;

“CREST Sponsored member(s)”      a CREST Member admitted to CREST as a sponsored member (which includes all CREST Personal Members);

“CREST Regulations”                the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended;

“Enlarged Ordinary Share Capital” the Ordinary Shares of the Company in issue upon Admission following completion of Open Offer (assuming full take-up of the Open Offer);

“EU”                                          the European Union;

“Excess Application Facility”    the arrangement pursuant to which Qualifying Shareholders may apply for any number of Open Offer Shares in excess of their Open Offer Entitlement provided that they have agreed to take up their Open Offer Entitlement in full

“Existing Ordinary Shares”       The existing Ordinary Shares of the Company as at close of business on the Record Date;

“Financial Conduct Authority” or     the United Kingdom Financial Conduct Authority; “FCA”

“FSMA”                                     the Financial Services and Markets Act 2000, as amended;

“HMRC”                                     Her Majesty’s Revenue & Customs;

“IFRS”                                       International Financial Reporting Standards as adopted by the European Union;

“ISIN”                                        international security identification number;

 “Issue Price”                            6.5 pence per New Ordinary Share;

“NEX Rules”                              the NEX Rules for Companies and the NEX Rules for NEX Corporate Advisers;

“NEX Rules for Companies”     the rules which set out the obligations and responsibilities in relation to companies whose shares are admitted to trading on NEX as published by the NEX Exchange from time to time;

“Official List”                             the list maintained by the UKLA in accordance with section 74(1) of FSMA for the purposes of Part VI of FSMA;

“Open Offer”                             the offer to Qualifying Shareholders to subscribe for Open Offer Shares at the Issue Price, as described in this document;

“Open Offer Entitlements”        the entitlement of Qualifying Shareholders to subscribe for the Open Offer Shares at the Issue Price allocated to Qualifying Shareholders at the Record Date pursuant to the Open Offer;

“Open Offer Shares”                  up to 6,153,846 new Ordinary Shares which are being offered to Qualifying Shareholders pursuant to the Open Offer;

“Ordinary Shares”                     ordinary shares of 0.01p each in the issued share capital of the Company from time to time;

“Overseas Shareholders”          Shareholders resident in, or citizens of, jurisdictions outside the United Kingdom;

“Qualifying CREST Shareholders”   Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in uncertificated form;

“Qualifying Non-CREST            Qualifying Shareholders whose Existing Ordinary Shares on the register

Shareholders”                           of members of the Company on the Record Date are held in certificated form;

“Qualifying Shareholders”        holders of Existing Ordinary Shares on the Record Date (other than Shareholders resident in or citizens of any Restricted Jurisdiction);

“Receiving Agent”                     Share Registrars Ltd

“Record Date”                           close of business on 10 March 2020;

“Regulation S”                           Regulation S of the Securities Act;

“Restricted Jurisdiction”           any U.S. person (as defined in Regulation S) or any address in the U.S., Canada, Australia, the Republic of South Africa, New Zealand, Japan or any other country outside of the United Kingdom where a distribution may lead to a breach of any applicable legal or regulatory requirements;

“Securities Act”                         the U.S. Securities Act of 1933, as amended;

“Shareholders”                          the persons who are registered as holders of Ordinary Shares;

“Sterling” or “£”                        the legal currency of the UK;

“TIDM”                                      tradable instrument display mnemonic;

“UK” or “United Kingdom”        the United Kingdom of Great Britain and Northern Ireland;

“UKLA”                                      the United Kingdom Listing Authority, being the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA;

“Uncertificated” or “in Uncertificated Form”

“U.S.” or “US”
USE”

a share or other security recorded on the relevant register of the relevant company concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;

the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia; Unmatched Stock Event

“VAT”                                        Value Added Tax;

All references in this Document to “£” or “pence” are to the lawful currency of the UK.

All references in this Document to “$” or “cents” are to the lawful currency of the United States of America.

All references to legislation in this Document are to English legislation unless the contrary is indicated.

-Ends-