28 July 2010 - Completion of Asset Sale to Egdon Resources plc

Press Release

For immediate release: 28 July 2010

EnCore Oil plc (‘EnCore’ or ‘the Company’)

Completion of Asset Sale to Egdon Resources

Further to the announcement on 22 March 2010, EnCore Oil plc (LSE: EO.) is please to announce the completion of the transfer of the group’s onshore UK assets together with its interest in the offshore UK Ceres gas field to Egdon Resources plc (“Egdon”; LSE: EDR), in return for a consideration of 39,200,000 ordinary shares in Egdon. The transfer of EnCore’s onshore France assets to Egdon, for which sale and purchase agreements have been signed, will complete later in the year upon gaining French regulatory consent, at which time Egdon will pay EnCore £100,000 in cash.

The 39,200,000 Egdon consideration shares have been allotted to EnCore, representing 29.998 per cent of the enlarged share capital of Egdon, and will be admitted to AIM on 29 July 2010.

Completion of the transaction has also triggered a number of other terms of the agreement, namely;

• The appointment of Alan Booth, EnCore’s Chief Executive Officer as a Non-Executive Director of Egdon, to take immediate effect and to last for a period of five years thereafter, provided that either EnCore holds 15 per cent. or more of the share capital of Egdon or is the largest shareholder of Egdon. 

• The establishment of a Technical Services Agreement under which EnCore will provide Egdon with technical, commercial and accounting services, to be charged on a day-rate basis.

• The provision by EnCore to Egdon of a loan facility of up to £1.5 million, available for a two year period from 29 July 2010, at an interest rate of 10% or LIBOR plus 5% if greater.

• The commitment by EnCore to retain its shareholding in Egdon for a minimum of 12 months from 29 July 2010 with orderly market provisions for a further 12 months.

• A non-compete agreement under which, other than by agreement, Egdon will restrict its offshore activities in the UK to operations in the immediate area of Ceres and EnCore will restrict its onshore operations in the UK and France.

Commenting on the completion, Alan Booth, EnCore’s Chief Executive Officer said:

“The transaction with Egdon has placed a tangible and transparent valuation on our onshore portfolio and I look forward to working with the Egdon Board to assist in the development of Egdon’s portfolio. As the largest shareholder, EnCore will actively support and assist in Egdon’s ambitious growth plans.”

Click here to view a pdf of the announcement 

For further information, please contact:

Notes to editors:

Assets included in the transfer are listed below:

About EnCore Oil plc

EnCore Oil plc (LSE:EO.) is an oil and gas exploration and production (E&P) company quoted on AIM.

It is not the Company’s aim to build a full cycle E&P company. The principal strategy is to create shareholder value through the successful exploration and appraisal of prospects and discoveries. The Company will seek to monetise or exchange the asset at the appropriate point in its life cycle and return value directly to shareholders wherever possible.

EnCore has an experienced and proven management team, a number of whom were responsible for the discovery of the Buzzard field in the UK North Sea, which currently produces over 10 per cent. of the UK’s total oil production.

All EnCore’s commercial and material technical evaluations are undertaken in-house by the EnCore team. This brings both continuity to the management and development of the assets and an ownership that is vital to unearth the best and most creative new ideas and opportunities.

www.encoreoil.co.uk

Wednesday, July 28, 2010