Rose Petroleum plc

Issue of equity to raise £3m, notice of General Meeting and change to Total Voting Rights

22-September-2017

Issue of equity to raise £3m, notice of General Meeting and change to Total Voting Rights

Rose (AIM: ROSE), the AIM quoted natural resources business, is pleased to announce that the Company has conditionally raised £3m before expenses through a placing of 75,000,000 new ordinary shares of 0.1 pence each ("Placing Shares") at a price of 4 pence per share (the "Placing Price") with a range of new and existing investors (the "Placing"). Of the funds raised, £600,000 is conditional, inter alia, on the approval of shareholders at a general meeting of resolutions to provide authority to the Directors to issue and allot further new ordinary shares otherwise than on a non-pre-emptive basis, further details of which are set out below.

The net proceeds of the Placing will be used to complete the 3D seismic survey on the Company's oil and gas exploration acreage in the Paradox Basin, Utah (the "Paradox Acreage"), to commence drill permitting and to provide working capital.

The seismic survey is an essential part of unlocking the potential of the Paradox Acreage, which will identify the drill locations for the initial drill programme planned for the second half of 2018. The directors of Rose believe the state of the art 3D seismic shoot proposed is of considerably higher quality than previously shot within the Paradox basin and is planned to not only identify the potential targets within the Paradox clastics, as defined in the Ryder Scott resources report of April 2014, but is also expected to be able to show potential targets within the Leadville Limestone formation, directly below the clastics. This offers additional potential for conventional targets which have been successfully exploited directly south of the Company's acreage in the Salt Wash Field.

As a result of this fundraise, subject to the resolutions being passed at the GM (as defined below) for the second tranche of the Placing, the seismic shoot is now fully funded and should be completed by year-end 2017, with processing and interpretation, and the subsequent identification of drill targets completed in early 2018. The availability of this data is expected to open up additional channels for financing the drill programme, both at project level and/or at corporate level, and based on historic discussions with third parties, the directors of Rose are confident of further financing being available at that time.

As recently announced, Rose has extended the earn-in agreement on the Paradox Acreage to include not only hydrocarbons but also lithium, brines, salts, magnesium and water, or mineral interests. The 3D seismic data will also be able to be utilised to identify potential lithium targets which are known to exist in the Paradox basin. Although not the primary target, these minerals could provide significant further value for shareholders.

The Company will shortly make available on its website, www.rosepetroleum.com, a presentation providing further details of the Company's Paradox Acreage.

Details of the Placing and general meeting

The Placing Shares to be issued pursuant to the Placing have been conditionally placed by Turner Pope Investments Limited ("TPI"), as agent of the Company, with certain existing and new investors pursuant to a Placing Agreement.

The Company currently has limited authority to issue new ordinary shares for cash on a non-pre-emptive basis. Accordingly, the Placing is being conducted in two tranches, as follows:

1. First Placing Shares

A total of £2,400,000, representing the issue of 60,000,000 Placing Shares at the Placing Price (the "First Placing Shares"), has been raised within the Company's existing share allotment authorities (the "First Placing"). Application will be made for the First Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 28 September 2017 ("First Admission"). The issue of the First Placing Shares is conditional only upon First Admission and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission.

2. Second Placing Shares

The balance of the Placing, being £600,000 and representing the issue of 15,000,000 Placing Shares at the Placing Price (the "Second Placing Shares"), is conditional upon, inter alia, the passing of resolutions 1 and 2 (granting the Directors authority to issue and allot new ordinary shares otherwise than on a non-pre-emptive basis) to be put to shareholders of the Company at a general meeting of the Company to be held on 9 October 2017 (the "GM") (the "Second Placing"), whereby such authority will be utilised by the Directors to enable completion of the Second Placing. A circular containing a notice of the GM will be posted to shareholders later today and will be made available on the Company's website www.rosepetroleum.com.

In addition, the Second Placing is conditional, inter alia, on the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to the admission of the Second Placing Shares to trading on AIM ("Second Admission"). Application will be made for the Second Placing Shares to be admitted to trading on AIM and it is expected that Second Admission will take place on or around 10 October 2017.

The Placing as a whole would, if the necessary resolutions are approved at the GM, result in the issue of 75,000,000 new ordinary shares of 0.1p each, representing, in aggregate, approximately 67 per cent. of the Company's issued ordinary share capital as enlarged by the Placing. The First Placing is not conditional on the Second Placing completing.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of issue of the Placing Shares.

Placing Agreement and warrants

Under the terms of the Placing Agreement, TPI will receive commission from the Company conditional on First Admission and Second Admission and the Company will give customary warranties and undertakings to TPI in relation, inter alia, to its business and the performance of its duties. In addition, the Company has agreed to indemnify TPI in relation to certain liabilities that they may incur in undertaking the Placing. TPI has the right to terminate the Placing Agreement in certain circumstances prior to First Admission and Second Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. The Placing is not being underwritten.

In addition, for its services as Placing agent, TPI will be granted warrants to subscribe for 3,625,000 new ordinary shares of 0.1p each in the Company (representing approximately 3.7 per cent. of the issued ordinary share capital as enlarged by the Placing) at a price of 7.125p (the "Warrants"). The Warrants will be exercisable for three years at any time from the date of First Admission.

Total Voting Rights

With effect from First Admission, the Company's issued ordinary share capital will comprise 97,644,709 ordinary shares of 0.1 pence, with one voting right per share. The Company does not hold any shares in treasury. Therefore, the total number of ordinary shares of 0.1p and voting rights in the Company will be 97,644,709. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company pursuant to the FCA's Disclosure Guidance and Transparency Rules.

MAR

The Market Abuse Regulation (MAR) became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

Matthew Idiens, CEO of Rose Petroleum plc, commented:


"The Board is delighted to have completed this transformational fundraise to fully finance the 3D seismic programme, and thanks new and existing investors for their support, albeit at a discounted valuation. The fundraise will enable us to commence fulfilling the long-term objective of realising the potential value of the Paradox Acreage. We have been waiting a long time to commence the seismic shoot, and we believe the seismic shoot can be the catalyst to deliver significant shareholder value.

Having already started the surveying, we are now able to commence the physical shoot without delay and have mobilised the teams to begin operations. 3D seismic is an essential part of unlocking the basin and with the expertise of the team we now have in place we are confident of success.

The additional uses of the seismic data beyond the assessment of the Paradox clastics, including assessing the Leadville Limestone formation which has been successfully exploited very close to our acreage and also the assessment of the lithium potential provide further upside for shareholders than previously considered.

Whilst shareholders may be disappointed with the pricing level of the fundraise, it was crucial for the Company to clear this funding hurdle and commence what we hope will be a very exciting time for the Company.

We would like to take this opportunity to welcome our new shareholders on board and look forward to keeping all our shareholders informed of our progress as we implement our work programme outlined above over the coming months."