3Legs Resources plc 3LEG Withdrawal of Requisition of General Meeting

  3Legs Resources plc (3LEG) - Withdrawal of Requisition of General Meeting

RNS Number : 9903O
3Legs Resources plc
18 October 2012




For Immediate Release



18 October 2012





3Legs Resources plc



Withdrawal of Requisition of General Meeting and Appointment of New Group CEO



Highlights



· Withdrawal of Requisition of General Meeting

· New CEO and enhanced technical team

· Exciting Polish Baltic Basin programme

· Intention to seek authority for share buyback



3Legs Resources plc (the  "Company" and, together  with its subsidiaries,  the 
"Group" or  "3Legs"),  an  independent  oil and  gas  group  focusing  on  the 
exploration and  development  of  unconventional oil  and  gas  resources,  is 
pleased to announce that the  notice received from Lynchwood Nominees  Limited 
requisitioning a meeting  of the  Company's shareholders  pursuant to  section 
67(2) of the Isle of Man Companies Act 2006 has been withdrawn with  immediate 
effect.



In discussions with William Jeffcock, the beneficial owner of the shares  held 
by Lynchwood Nominees, the Company  has highlighted the considerable  progress 
made in  the  Baltic  Basin  in  the last  twelve  months,  coupled  with  the 
appointment of a new CEO and the finalisation of an exciting 2012-13  drilling 
programme, all of which is described in more detail below.



Continued progress  in  the  Company's western  Baltic  Basin  concessions  in 
Poland:



· Through its exploration programme to  date, the Company has achieved  a 
significant de-risking of its western Baltic Basin concessions,  demonstrating 
both  the  presence  of  hydrocarbons  and  that  those  hydrocarbons  can  be 
successfully flowed to surface. The  Company's exploration programme for  the 
remainder of 2012 and for 2013 has been designed to establish commerciality in
one or more pay zones on its concessions.



· Following its initial public  offering, the Company drilled and  tested 
two horizontal wells  in 2011, the  Lebien LE-2H well  and the Warblino  LE-1H 
well, on its western  Baltic Basin concessions. On  19 March 2012,  following 
the results of these two wells, ConocoPhillips gave notice of the exercise  of 
its call  option to  acquire a  70% interest  in the  Company's three  western 
Baltic  Basin   concessions,   which   the   Company   believes   demonstrates 
ConocoPhillips' firm commitment to the Baltic Basin shales and their long term
potential.



· By performing detailed technical analysis  of its own data and of  data 
acquired from other operators  in the basin through  data trades, the  Company 
has been able  to refine further  its geological model  for the Baltic  Basin, 
enabling it to  high-grade its  very large  acreage position  and to  identify 
those areas of its concessions which offer the highest probability of success,
by reason  of  the thickness  of  the  target formations  and  reservoir  rock 
properties. The Company's acreage evaluation has validated its original first
mover acreage selection  in 2007,  which resulted  in 3Legs  securing what  it 
still believes to be the most prospective acreage in any of the Baltic  Basin, 
the Podlasie Depression and the Lublin Trough.



· The Company conducted further testing of the Warblino LE-1H  horizontal 
well during August and September 2012, when the well achieved an improved flow
rate of 90 mscf/d, some five times  the rate achieved when the well was  first 
tested in November  2011. Testing  equipment has  now been  mobilised to  the 
Lebien location, where further testing is due to commence on the Lebien  LE-2H 
horizontal well in the next few days. This well was first tested in  September 
2011, recording a flow rate  of 450-520 mscf/d at the  end of a 17 day  period 
before being suspended.



· Drilling commenced on the Company's fifth well in the Baltic Basin, the
Strzeszewo LE-1, on 4 October 2012, and is proceeding according to  schedule. 
This near-vertical  exploration  well represents  a  7 km  step-out  from  the 
Company's Lebien LE-2H horizontal well and its location was selected to target
thicker net  pay  in  both  the  Ordovician  and  Cambrian  sections,  in  the 
high-graded area which the  Company has identified  within its western  Baltic 
Basin concessions. The well is  on schedule to be  cored, logged and cased  by 
the end  of November  2012,  to be  followed by  a  programme of  DFIT  and/or 
hydraulic frac testing.



· The  Company  has recently  announced  a drilling  programme  for  2013 
comprising the drilling, coring and testing  of two or more vertical wells  in 
the Company's high-graded  acreage on  its western  Baltic Basin  concessions, 
with the option then to drill and test horizontal sections.



· The exploration programme outlined  above will result in a  significant 
further de-risking of  the Company's  western Baltic  Basin concessions.  The 
programme is expected to cost £13.7 million net to 3Legs for the period up  to 
the end of 2013, including an  extensive testing programme for the  Strzeszewo 
LE-1 well and for a minimum of two wells planned for 2013. Further testing of
the wells to be drilled in 2013 is likely to continue into 2014.



·  The  Board  of  Directors  (the  "Board")  firmly  believes  that  the 
exploration programme  which  the Company  has  designed in  conjunction  with 
ConocoPhillips represents the  best possible strategy  for further  de-risking 
its western Baltic Basin concessions and hence creating significant value  for 
its shareholders.



World-class co-venturer in ConocoPhillips



· The Board believes  that ConocoPhillips' participation underscores  the 
attractiveness  of   the   Company's   western   Baltic   Basin   concessions. 
ConocoPhillips has  extensive  shale  oil  and  gas  experience  in  the  US, 
including in the Eagle Ford, Barnett and Bakken shale plays; and 3Legs,  while 
it has been acting as operator, has benefited significantly from its access to
ConocoPhillips'  expertise,   resources  and   personnel,  complementing   the 
Company's own industry experience and  local knowledge. Following the  notice 
of exercise of  its call option  in March 2012,  ConocoPhillips took over  the 
operatorship of 3Legs'  western Baltic  Basin concessions  in September  2012, 
thus ensuring that  the concessions continue  to benefit from  ConocoPhillips' 
world-class operational capabilities.



Strengthened management and technical team



· The Board  announces that Peter  Clutterbuck has informed  them of  his 
intention to resign his position as a  Director and CEO of 3Legs, in order  to 
pursue other business interests.



· The  Board  is delighted  to  announce  that Kamlesh  Parmar  has  been 
appointed as  Group CEO.  Mr. Parmar  has  been with  the Company  since  its 
activities commenced in  2007 and has  previously held the  position of  Group 
Commercial Director and Poland Country Manager. He has overseen all aspects of
the Company's  operations in  Poland since  inception, and  in particular  has 
managed the successful relationship with ConocoPhillips.



· Mr. Parmar has achieved recognition both for the Company's achievements
in Poland and for  his own contribution  to the development  of the shale  gas 
industry in Poland, being awarded "Professional of the Year" title at Poland's
inaugural Shale Gas Awards gala in 2011.  Mr. Parmar is also one of the  four 
members of the  Management Board  of OPPPW, the  Polish upstream  oil and  gas 
industry association.



· The Company  is pleased to  announce the appointment  of John Blair  as 
Exploration Manager  with  immediate  effect. Mr.  Blair  was  most  recently 
employed by Knowledge Reservoir LLC, a technical consultancy based in  Denver, 
where he was responsible for both the firm's unconventional resource  practice 
and its acquisition  and divestiture practice  worldwide. While at  Knowledge 
Reservoir LLC, Mr. Blair led multi-disciplinary teams that assessed more  than 
100 unconventional resource plays around the world. He has also launched  and 
run several successful E&P ventures of his own.



· The  Company will  look to  further strengthen  its Board  through  the 
appointment of an additional Non-Executive Director.



·  The  above  appointments  demonstrate  the  Company's  continued  firm 
commitment to its shale  exploration activities in Poland  as well as  further 
strengthening the Company's management  and technical capabilities. The  Board 
believes that its  technical capabilities, coupled  with the Company's  strong 
local knowledge, are essential for the ongoing collaborative relationship with
ConocoPhillips and for both protecting and enhancing shareholder value in  the 
Baltic Basin.



Future actions to deliver shareholder value



· The Company's exploration  programme for 2012-13  has been designed  to 
establish commerciality in  one or more  pay zones on  its concessions.  This 
programme has been finalised  with ConocoPhillips and  the Company expects  to 
commit to its implementation in the coming days.



· As  at 30  June 2012,  the Company  had cash  reserves of  £45.4m.  The 
Company projects that it will have cash reserves of approximately £26  million 
as at 31 December  2013, based on  its planned 2012-13  work programme on  its 
western Baltic Basin concessions. The Company's expenditure has been and will
continue to  be  managed carefully,  focusing  on  what is  essential  to  the 
continued exploration  of its  acreage position  and to  maintaining its  high 
calibre technical team.



· While the Company's  focus remains firmly on  its western Baltic  Basin 
concessions, the Board  wishes to  retain the flexibility  to investigate  new 
opportunities which have the potential to add value to the Company's  existing 
portfolio. In  these  circumstances,  the  Board  would  consult  with  major 
shareholders  before  committing  any  of  the  Company's  cash  reserves   to 
significant new opportunities.



· 3Legs  shares  currently  trade at  a  discount  to the  value  of  the 
Company's cash reserves. The Board believes this significantly undervalues the
Company and accordingly will  seek authority from  shareholders to enable  the 
repurchase of its shares. 





Kamlesh Parmar, CEO of 3Legs, said:



"I am delighted to be stepping  up to the new role as  CEO of 3Legs at a  time 
when the Company has a busy  and exciting forward work programme through  2012 
and 2013.



Poland's Baltic Basin continues to  offer huge potential and 3Legs'  interests 
are in the sweet spot of that  region. We remain committed to maximising  the 
commercial opportunities presented by these assets.



Our experienced management and technical team, working in conjunction with our
world-class co-venturer  ConocoPhillips,  is best  placed  to deliver  on  our 
goals.



We strongly  believe the  equity markets  are significantly  undervaluing  the 
Company's potential and, while this continues, we will take advantage of  this 
to the benefit of our shareholders by seeking authority to buy back shares."







For further information contact:



3Legs Resources plc    Tel: +44 1624 811 611
Kamlesh Parmar, CEO
Alexander Fraser, CFO
Jefferies Hoare Govett Tel: +44 207 029 8000
Simon Hardy
Jamie Buckland
College Hill           Tel: +44 207 457 2020
Matthew Tyler
Catherine Wickman
Nick Elwes





                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


MSCFFWSUAFESEDS -0- Oct/18/2012 09:37 GMT
 
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