Regency buys back into Gatwick Gusher

22nd Feb 2016 09:58

(ShareCast News) - Regency Mines has agreed to acquire an interest in the Horse Hill oil development in the Weald Basin near Gatwick Airport for £400,000 in cash and shares.Regency has signed binding heads of agreement with unlisted Angus Energy to purchase 5% in Horse Hill Development Ltd (HHDL), the special purpose company that owns a 65% participating interest and has the operatorship of the PEDL 137 licence, which last week produced a healthy flow of oil after test drilling, as well as the adjacent licence PEDL 246.The AIM-listed company, which sold out of the same percentage of HHDL last year, will pay £223,730 cash and issue Angus with 54.2m new shares priced at 0.325p per share, worth £176,270.Regency is settling the cash component of the consideration out of its working capital resources.Additionally, Regency has agreed to grant Angus 17.9m options exercisable into Regency shares at a price of 0.39p within eighteen months of the day of grant. Following the transaction, Angus will be interested in 29.9% of the issued share capital of Regency. Angus has stated that its interest in Regency is purely as an investment and that it intends to retain its shares.In December Angus, which also has a 60% interest in the producing Brockham oil field located in Surrey and a 50% interest in the producing Lidsey oil field located in West Sussex, declared its intention to float on AIM.Regency chairman, Andrew Bell, said the company was buying back on "broadly equivalent terms" at which it had sold out of HHDL last year."With the additional information now available, the asset now meets the investment criteria stated then. The timing of progress to production can be better quantified and in our opinion the potential and scale of the rewards now far outweigh the risk."