UK: EnCore to Form New Subsidiary, XEO Exploration
- Business & Finance
EnCore announces that the Company is planning for a subsidiary company, which will be assigned the Exploration Assets, to be floated on AIM.
The new company will be known as XEO Exploration plc (“XEO”). Subject to regulatory approvals and a successful institutional placing, XEO is expected to be admitted to AIM around the end of May 2011.
EnCore is in the process of transferring the Exploration Assets into XEO, subject to receiving the necessary partner and regulatory approvals. The exact percentage shareholding of EnCore in XEO will depend upon the final amount of funds raised by XEO.
Commenting on the formation of the new company, EnCore Chief Executive Alan Booth said:
“EnCore has considered a broad range of options available to it at this important time in the Company’s development. Clearly the significant discoveries at Catcher and Cladhan must take priority in terms of access to our capital. At the same time, we also firmly believe that our expanding exploration portfolio deserves appropriate funding to unearth any value that it may contain. However, we recognise that the risk profile of these assets is higher than the ongoing evaluation of the Catcher area and Cladhan. Whilst farming out the exploration portfolio was one possible route, it was recognised that the remaining equity levels would likely be in the order of one third of current levels. The farm out process would also likely place timing and control in the hands of third parties, who might perceive EnCore to have limited options with regard to exploration funding. We believe that the chosen route should allow us greater control over our own destiny, whilst enabling us to expose our current and new shareholders to higher impact and more material equity levels in those prospects in which we will seek to invest.
“Both companies will continue to benefit from the people and skills that have been so successfully deployed in building the asset base to date at EnCore, and both companies will be co-located at the current Baker Street offices. Whilst there can be no guarantee that we will be as successful again, we would like to ensure that our shareholders at least have a choice as to whether they wish to have ongoing exposure to high-impact exploration in the UK offshore in addition to their indirect interest through EnCore’s shareholding in XEO.”
Source:EnCore Oil, April 18, 2011;