Update on ROC Oil Company Limited Merger

    RNS Number : 9879B
  Anzon Energy Limited
  26 August 2008
   

    26 August 2008

    ANZON ENERGY LIMITED 

    UPDATE ON ROC OIL COMPANY LIMITED MERGER


    The following letter will be sent to Anzon Energy Limited (AEL) shareholders regarding its proposed merger with Roc Oil Company Limited
by way of a scheme of arrangement (Scheme).

    A copy of a letter from the Independent Expert Report confirming that the proposed Scheme remains fair and reasonable and, therefore, in
the best interests of AEL Shareholders will also be sent to shareholders and is available on the AEL website www.anzonenergy.com.


    FOR FURTHER INFORMATION PLEASE CONTACT:

    Anzon Energy Limited: Mr Tony Strasser +61 2 9024 3555

    Grant Thornton UK LLP: Fiona Owen +44 20 7383 5100



    Dear AEL Shareholder

    On 16 June 2008, Anzon Energy Limited (AEL) announced that it had entered into an agreement to merge with Roc Oil Company Limited (ROC)
(Merger) by way of a scheme of arrangement (Scheme). Since that time, world equity markets and the macro environment for global oil and gas
companies have been highly volatile, with the WTI oil price falling 15% during this period.

    Your AEL directors have continued to monitor their recommendation in respect of the Merger and remain of the view that the Scheme is in
the best interests of all AEL shareholders. AEL directors continue to recommend that all shareholders vote in favour of the Scheme, in the
absence of a Superior Proposal.

    Deloitte Corporate Finance Pty Limited, the Independent Expert has also reconfirmed that, in its view, the Scheme remains fair and
reasonable and therefore in the best interests of AEL shareholders (refer to attached letter).  

    At the time of the announcement of the Merger, the implied merger ratio for AEL shareholders was approximately 1.33 ROC shares for every
AEL share held (Scheme Consideration). At that time, the value of the Scheme Consideration, based on a ROC share price of A$2.02, was
estimated to be A$2.69 (�1.30) per AEL share.

    Since the announcement of the Merger, the ROC share price has continued to decline. This decline is consistent with the performance of
other intermediate/junior oil and gas companies listed on the ASX, including Anzon Australia Limited (AZA). Over this period, the ROC share
price has declined 45%. This compares to an average decline of other intermediate / junior oil and gas companies (Based on an equal
weighting of: Australian Worldwide Exploration, Beach Petroleum, Nexus Energy, AED Oil, and Anzon Australia) of 24%.

    As at 22 August 2008, the ROC share price had fallen to A$1.11. Based on the implied merger ratio of 1.33 ROC shares for every AEL
share, the current value of the Scheme Consideration is approximately A$1.48 (�0.69) (Based on exchange rate of 0.4657). 

    The AEL directors remain fully supportive of the Merger. The reasons for this include:

    *     No change in underlying assets - In recommending the ROC offer, the AEL directors were comfortable that the post Merger ownership
structure implied by the merger ratio was consistent with the relative contributions of ROC and AEL to the assets of the merged entity.
Since the announcement of the Merger, there has been no material change to the underlying assets, liabilities or operations of either
company. As such, the relative contributions of each company to the combined assets of the merged entity have not changed and the resultant
post Merger ownership structure continues to represent an outcome that AEL directors believe is in the best interests of all AEL
shareholders.

    *     Diversification - The Merger will provide AEL shareholders with exposure to a diversified portfolio of assets while maintaining
indirect exposure to the upside from the continued development of the BMG oil and gas fields in Bass Strait.

    *     Removal of trading discount - Prior to the announcement of the Merger, AEL consistently traded at a discount to the "see through"
value of its investment in AZA. This discount can be attributed to a number of factors including single asset risk and stock market
illiquidity. The Merger is expected to rectify this issue.

    *     Improved market liquidity and potential re-rating - An investment in ROC shares will provide AEL shareholders with significantly
enhanced market liquidity, which together with the increased market capitalisation and asset diversification of the merged group, may
provide the opportunity for AEL shareholders to participate in a potential re-rating of the merged group.

    *     AEL share price - The current value of the offer is below the current AEL share price of �0.80 (At close of trade on 22 August
2008) (A$1.72 (Based on exchange rate of 0.4657)). The AEL directors are of the view that, due to its illiquidity, the AEL share price does
not reflect a share price that could be realised by a majority of AEL shareholders should they wish to realise their investment in the
normal course of trading. AEL's average daily trading volume on AIM since the announcement of the merger has only been 9,263 shares, which
represents only 0.01% of the AEL shares on issue. 

    *     Relative price decline - As AEL's only material asset is its investment in AZA, the merger ratio was determined by reference to
the value of AZA shares. Since the announcement of the Merger, not only has the ROC share price declined but the AZA share price has also
fallen from A$1.305 to A$0.82 (At close of trade on 22 August 2008), suggesting that the market's view as to the relative values of ROC and
AZA has not changed materially. 

    AEL directors note the publication of the 2008 half year report and results by ROC on 25 August 2008. Key elements of this report
included:

    *     Record sales revenue of US$179.8 million;
    *     Strong net cashflow from operations of US$86.1 million;
    *     Record half yearly trading profit of US$101.1 million;
    *     Net loss after income tax of US$120.7 million after exploration expensed of US$65.3 million and a net derivative loss of US$126.5
million (before tax);
    *     Normalised net loss after tax of US$13.3 million after excluding significant items including the unrealised derivative loss noted
above of $119.8 million (after tax); and
    *     Net debt as at 30 June 2008 of US$109 million.

    In respect of the above results, the AEL directors note:

    *     The exploration write off is consistent with ROC's Successful Efforts accounting policy. Costs associated with the Frankland-2 and
the Dunsborough-2 appraisal wells in offshore Perth Basin have been expensed as neither discovery is considered to be commercial on a
stand-alone basis at this time.

    *     At 30 June 2008, ROC held Brent oil price derivative contracts for 2.6 million barrels at an average price of US$70.10/bbl. As a
result of a strengthening Brent crude oil price, as at 30 June 2008, the mark to market position of ROC's oil price hedge book was a
US$176.4 million liability. The movement in the mark-to-market value of ROC's derivative contracts from 31 December 2007 has resulted in a
derivative loss of US$142.4 million for the period, of which US$119.8 million is unrealised.  

    Subsequent to 30 June 2008, the Brent oil price has fallen on average across the forward curve by approximately US$22/ bbl, from US$141/
bbl to US$119/ bbl (at 22 August 2008). Had this lower price been applied to ROC's derivative position at 30 June 2008, the mark-to-market
of ROC's remaining oil price hedge book would have been US$123.7 million liability, an improvement of US$52.7 million after tax. This lower
liability would have resulted in a derivative loss of US$89.7 instead of US$142.4 million.

    As set out in Section 5.3 of the Scheme Booklet, the AEL Board will request that the Independent Expert review both the half year
results of AEL and ROC to confirm that these financial results do not change the opinion of the Independent Expert that the Scheme is fair
and reasonable and therefore in the best interests of AEL shareholders. AEL proposes to announce the outcome of this review to AIM in
advance of the Scheme Meeting.

    AEL Shareholders are encouraged to vote on the proposed Merger with ROC at the Scheme meeting, which is scheduled to be held at 10.00am
(AEST) on 3 September 2008, at Corrs Chambers Westgarth, Level 32, Governor Phillip Tower, 1 Farrer Place, Sydney NSW, 2000.  AEL
shareholders should refer to the Scheme Booklet that was previously sent to you for details on how to vote. Please note that all proxies
must be received by no later than 10:00am (AEST) on 2 September 2008.

    If you have any questions, please call the information line between 9:00am and 5.00pm (AEST) Monday to Friday on 1300 309 234 (within
Australia), or 0800 450 974 (within New Zealand), or +61 3 9415 4639 outside Australia and New Zealand.

    My fellow AEL directors and I look forward to the consummation of the merger of AEL and ROC and encourage you to join us to vote in
favour of the Scheme.

    Yours sincerely

    Michael N Arnett
    Chairman
    Anzon Energy Limited


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
MSCGIGDIRGDGGIL
Anzon Energy (LSE:AEL)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024