Anglo African Oil & Gas : Amendment to Consideration Payment & Notice of GM

Amendment to Consideration Payment & Notice of GM

24 March 2020

Proposed amendment to consideration payment in relation to disposal of Anglo Africa Oil & Gas Congo S.A.U

Notice of General Meeting

Disposal of AAOGC

AAOG provides an update on the disposal (the 'Disposal') of an 80% interest in its wholly owned subsidiary Anglo African Oil & Gas Congo S.A.U ('AAOGC') to Zenith Energy Ltd ('Zenith').

The Company and Zenith have entered into a conditional Deed of Variation (the 'Deed of Variation') to amend the terms of the consideration payable pursuant to the Disposal (the 'Consideration'). Under the original terms of the Disposal, Zenith was to pay £1,000,000 to AAOG of which £500,000 was to be paid in cash in six equal monthly instalments and the balance of £500,000 was to be settled by the issue of shares in Zenith to AAOG (the 'Consideration Shares').

The Deed of Variation provides that the Consideration shall be amended to £800,000 which is to be paid in cash only in ten equal monthly instalments with the first payment to be paid on completion of the Disposal ('Completion'). As a result of this amendment, AAOG will no longer receive any Consideration in the form of shares in Zenith.

The Company has also terminated the loan agreement with Zenith as announced on 28 January 2020 since it anticipates having sufficient working capital prior to Completion thanks to the support it expects to receive from Forum Energy Services Limited ('Forum') as announced on 19 March 2020.

The Company has also terminated the put and call option agreements entered into with Zenith and as announced on 21 January 2020.

Completion of the Disposal remains subject to Ministerial consent to change of control in the Republic of Congo. Completion will therefore occur on the later of satisfaction of these regulatory requirements or completion of the GM.

General Meeting

This change to the amount of the Consideration and the mechanism by which it is to be settled is conditional only on the passing of a resolution to be put to shareholders at a general meeting (the 'GM'). Otherwise, the terms of the Disposal, as detailed in the circular sent to shareholders on 27 December 2019, remain the same.

Forum Energy Services Limited has given an irrevocable undertaking to vote in favour of the Resolution at the General Meeting in respect of its registered holding in the Ordinary Shares amounting in aggregate to 94, 041,011 Ordinary Shares, representing 21.87 per cent. of the Company's Ordinary Shares in issue on 23 March 2020 (being the latest practicable date prior to the publication of this RNS).

A circular calling the GM to approve the Disposal in accordance with the Deed of Variation will be posted to shareholders in due course. Further details of the GM's time and location will be released alongside the circular.

The Company is aware of the restrictions placed on travel by the UK Government as a result of the ongoing spread of the Covid-19 coronavirus. The health of the Company's shareholders, as well as its employees, is of paramount importance. Accordingly, shareholders are encouraged to abide by the Government's restrictions and not travel to attend the GM in person. The Company intends to hold the GM 'remotely' insofar as is possible and as such will in due course provide details of conferencing facilities that will enable shareholders to attend and vote at the GM without physically attending the place at which it is to be held. The Company is advised that the GM will be validly held so long as a quorum of two shareholders is present either physically or remotely.

The Board encourages shareholders to submit their Form of Proxy as early as possible, even if they intend to attend the meeting using the remote conferencing facilities The Company will continue to monitor the advice issued by the UK Government and will make further arrangements and contingencies as necessary.

Rationale

Shareholders will be well aware of the current turmoil in the public markets and the precipitous recent fall of the price of oil brought on by the ongoing Covid-19 pandemic and the trade war between Russia and Saudi Arabia. These events have caused uncertainty around the world and for companies to seek to retain and accrete cash wherever possible. Moreover, they have caused global share prices to fall and both Zenith and AAOG have felt the impact of this. At present, if the Disposal was to proceed without amendment, AAOG would own approximately 20 per cent. of the issued share capital of Zenith and would be forced to retain such shares for at least six months. Exacerbated by the current uncertainty in the markets, there is no certainty that AAOG would be able to sell such a large stake in Zenith in an acceptable timeframe or at a price equal to the issue price.

Taking account of all these factors, the board believes it is in the best interests of its shareholders to remove any uncertainty related to the value of the Consideration Shares and instead to receive a certain cash payment pursuant to the Disposal. The Deed of Variation allows for that and accordingly, the Directors consider that the entry into the Deed of Variation is in the best interest of the Company and its shareholders as a whole and unanimously recommends that its shareholders vote in favour of the resolution to be proposed at the GM.

AIM Rule 15

Shareholders are reminded that, in accordance with AIM Rule 15, the Disposal constitutes a fundamental change of business of the Company. On Completion, the Company shall cease to own, control or conduct all or substantially all, of its existing trading business, activities or assets.

Following Completion, the Company will therefore become an AIM Rule 15 cash shell and as such will be required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from Completion or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million) failing which, the Company's Ordinary Shares would then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM would be cancelled six months from the date of suspension should the reason for the suspension not have been rectified.

Enquiries:

Anglo African Oil & Gas plc	[email protected]
Sarah Cope, Non-Executive Chair
finnCap Ltd (Nominated Adviser)	Tel: [phone]
Christopher Raggett, Giles Rolls, Teddy Whiley (Corporate Finance)
Camille Gochez (ECM)