Predator Oil & Gas Holdings plc looks to raise approximately £2 million from two executive directors’ share option exercises and a conditional two-tranche placing.
SHARE OPTION SCHEME
On 12 May, the company reported that managing director Paul Griffiths exercised 11,183,605 share options and executive chairman Lonny Baumgardner 7,928,444, in accordance with Predator’s unapproved share option scheme of two dates, raising a total £1,596,986.
A total of 3,401,077 options were exercised from the scheme dated 9 November 2022 to subscribe for 15,000,000 new ordinary shares each at 10p.
All options are being exercised for the 23 November 2022 scheme, to subscribe for 15,710,972 new ordinary shares, at 8p per share.
A total of 19,112,049 new ordinary shares will be issued to Mr Griffiths and Mr Baumgardner before being transferred to “various investors” for the price of £0.057 per share, because Predator is unable to issue sufficient shares to fund the programme itself without publishing an FCA approved prospectus.
The transfer to Novum Securities Ltd, which acts as a joint broker to Predator, of 19,112,049 option exercise shares will be at a price of £0.057 for a total £1,089,387 before expenses.
The exercise price of £0.057 is lower than the placing price of £0.08 and £0.10, creating a shortfall.
To deal with this, Predator’s independent non-executive board members approved that the existing directors’ loans dated 1 December 2022 from Mr Griffiths and 2 December 2022 Mr Baumgardner, totalling £507,599, are capitalised and offset against the shortfall from the transfer of their option exercise shares to investors.
TWO-TRANCHE PLACING
Predator also conditionally placed 2,500,000 of new ordinary shares at a placing price of £0.057 to raise £142,500 before expenses.
The first tranche placing utilises the company’s existing headroom shares.
Subject to admission to trading of the option exercise shares and first tranche shares, Predator intends to place 3,822,410 additional new ordinary shares each at a placing price of £0.057 to raise £217,877 before expenses.
Predator said that the second tranche shares must be issued separately to the first tranche shares as they utilise an increase in the company’s headroom.
Following admission of all shares from the option exercise, first and second tranche placing, the company will have 425,403,414 ordinary shares of no par value in issue, each with one vote and none of which are held in treasury.
USES
The company will use all net proceeds to fund the further development of the drilling and testing programme in Morocco before a final investment decision.
DIRECTORS’ COMPENSATION
Predator added that the independent non-executive board members agreed that Mr Griffiths and Mr Baumgardner would be compensated for prematurely exercising their share option incentives and selling those option exercise shares to investors and for capitalising the loans to their disadvantage.
The compensation includes 7,855,486 new share options exercisable at £0.08 pence per share and 3,328,119 share options exercisable at £0.10 pence per share to be issued to Mr Griffiths with no vesting conditions.
In addition, 7,855,486 new share options exercisable at £0.08 pence per share and 72,958 share options exercisable at £0.10 pence per share will be issued to Mr Baumgardner with no vesting conditions.
The share options are in accordance with the company’s current share incentive scheme.
To compensate for the capitalisation of the loans, Mr Griffiths will receive from the company £323,785 in cash upon either a flow rate of 1 million cfg/day being achieved from any well within the area of the Guercif petroleum agreement; or a flow rate of 100 bopd from any well in Trinidad for which the company is a participant.
Mr Baumgardner will receive from Predator £183,813 cash on the same terms as Mr Griffiths.