Ann: Corporate Update - Wailawi Oil & Gas Project, page-2

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"Further to the previous announcement to the market on 23 September 2015, the Directors of
Enhanced Oil and Gas Recovery Limited (EOR) are pleased to advise that they have re-negotiated
the purchase price for the acquisition of Centre Energy Petroleum Limited (CEP) to reflect the
current market price for oil and gas while maintaining shareholder value going forward.
CEP holds an 85% economic/participatory interest in P.T. Benuo Taka Wailawi (Joint Venture
Company) which is the holder of an Extended and Amended Co-operation Agreement with respect
to the Wailawi Oil and Gas Project (the Project).
The Wailawi Oil and Gas Project covers some 30.74 square kilometers and is located in the southern
part of the Mahakam Delta Complex of the petroleum producing Kutai Basin, 12km southwest of
Balikpapan in East Kalimantan, Indonesia.
CEP holds the rights on behalf of the Joint Venture Company to operate the Wailawi Oil and Gas
Project pursuant to the Extended and Amended Co-operation Agreement.
EOR has entered into a Deed of Variation in respect of the Share Purchase Agreement with the
current shareholders of CEP (CEP Shareholders) in accordance with which:
 The purchase price is now AU$5,110,051, which takes into account the original purchase
price of AU$12.8 million adjusted to account for the current market circumstances,
including the current market price for oil and gas.
 The payment of the purchase price will be satisfied by the issue of shares to the CEP
Shareholders in three stages, two of which will be performance based (Earn Out Shares),
over a three year period until 30 June 2018, as follows:
o Stage One - on completion of the Share Purchase Agreement (following EOR
shareholder approval), the issue of shares at the prospectus issue price per share to
the aggregate value of AU$3,000,000
o Stage Two – Issue of shares at the prospectus issue price per share to the aggregate
value of $1,055,026 provided a minimum target return to EOR of US$748,245 is
received from the Wailawi Oil and Gas Project for the financial year ended 30 June
2017
2
o Stage Three - Issue of shares at the prospectus issue price per share to the
aggregate value of $1,055,026 provided a minimum target return to EOR of
US$748,245 is received from the Wailawi Oil and Gas Project for the financial year
ended 30 June 2018.
o If the target return for the Wailawi Oil and Gas Project is not reached for FY2017
and FY2018 but at 30 June 2019 a minimum target of US$748,245 for each financial
year has been achieved on an aggregated basis, then EOR will issue the unissued
balance of the Earn Out Shares to the CEP Shareholders.
EOR is expected to consolidate its shares to arrive at a price of $0.02 per consolidated share and a
prospectus issue price of $0.02 per consolidated share as indicated in the Transaction-based
Comparison Table below.
Method of Calculation
Total Consolidated Assets ($'000) 1,214 3,000 4,214 247%
(Stage 1 Only)
Total Equity Interest ($'000) 653 3,000 3,653 459%
- 1,900 1,900 N/A
Total Securities on Issue
Upon consolidation (new shares) 279,550,741 142,857,143 422,407,884 51%
(Before prospectus issue)
Market Capitalisation ($'000)
2,869
5,871 3,000 8,871 51%
Market Price (per share)
Current (30/11/2015) $ 0.007
Shares consolidation at 3:1 $ 0.021 $ 0.021 $ 0.021
Notes:
1. Latest audited figures are of 30 June 2015 financial reports adjusted for subsequent quarter period transactions.
2. Scenario "Before transaction" includes raising pre-listing capital of $700,000 at current market price at $0.007.
3. Completion is deemed at "Stage 1" of the acquisition by issue of $3,000,000 value in shares, excluding Earn-out
shares in later years.
4. Consolidation ratio (existing shares:new share) 3:1 to arrive at minimum listing price of $0.02 or higher.
5. "All securities" refers to all quoted and unquoted shares including converting notes.
Transaction-based Comparison Table
A B C D E
Percentage
change due to
transaction
Project/Exploration Expenditure for
next year ($'000)
Market Capitalisation Comparison
Current Quoted Shares
All securities
From latest audited
figures/Before
transaction
Actual/Projected
Increase/Decrease due
to transaction
B +/- C C/B
Particulars Before transaction Increase/Decrease
due to transaction After transaction
3
No change is proposed to the board of senior management of EOR. At the completion of the Share
Purchase Agreement, Ross Hill shall assume the role of Chairman of CEP and John Carmody shall
take on a technical advisory role with respect to the Wailawi Oil and Gas Project.
As the business of oil and gas exploration and extraction constitutes a significant change in the
nature of the business of EOR, the Company is required to re-comply with Chapters 1 and 2 of the
ASX Listing Rules as if it were applying for admission to the official list of the ASX. EOR is advancing
the completion of its prospectus and the necessary documentation to conduct a general meeting of
the Company to obtain the requisite approvals for the acquisition of CEP and its re-compliance with
Chapters 1 and 2 of the ASX Listing Rules.
Shareholders’ approval for the acquisition of CEP and EOR's re-compliance with Chapters 1 and 2 of
the ASX Listing Rules will be sought at an EGM in late February 2016. EOR is proposing to raise
between AU$3.5m and AU$4.5m via a prospectus to fund the development of the existing
producing gas wells and maintain cash flow going forward.
Proposed timetable*
Date Event
18 December 2015 Pre listing capital raising - placement
18 December 2015 Receipt of independent expert’s report
23 December 2015 Notice of meeting, explanatory memorandum and collective due diligence
finalised
24 December 2015 Draft notice issued to ASIC and ASX for review
20 January 2016 Dispatch of notice of meeting and explanatory memorandum to EOR
shareholders
12 February 2016 Finalise and lodge prospectus
23 February 2016 EOR shareholders’ meeting
11 March 2016 Close offer under the prospectus
21 March 2016 Completion of the Proposed Transaction
21 March 2016 Issue EOR shares to the applicants under the prospectus offer
25 March 2016 Satisfy Chapter 1 and 2 requirements and seek reinstatement of EOR
securities to quotation
28 March 2016 Re-admission of EOR securities to trading
*Please note that the dates set out above are indicative only and may be subject to change at the discretion of
the EOR directors.