Description of Xplorer’s business

Xplorer was incorporated and registered in England and Wales on 12 March 2012 with registered number 7987393 as a public company limited by shares under the Companies Act 2006. It is domiciled in the United Kingdom and is subject to the City Code.

Xplorer was formed for the purpose of acquiring a company, business or asset that has operations in the oil and gas exploration and production sector that it will then look to develop and expand. The Acquisition is required to establish Xplorer’s presence in the oil and gas sector and will form the basis of Xplorer’s growth in that sector. It is not intended that Xplorer simply acquire minority stakes in oil and gas entities but that it acquires and operates oil and gas businesses.

Xplorer (including subsequently acquired or incorporated subsidiaries) will form a trading business, rather than an investment entity. The Company intends that the Acquisition be of an operating oil and gas exploration and production business that can act as the cornerstone for building a substantial operational group within the same sector. Xplorer intends to grow this operational oil and gas exploration and production business both organically and by acquisition. The Company aims to achieve its objective through the identification and acquisition of interests in companies, businesses or assets where the existing owners are attracted to the Xplorer proposition, namely the opportunity to sell for cash or hold an ownership interest in a company whose equity securities are listed on the London Stock Exchange, with cash, access to capital markets and the “know-how” to unlock the value of their acquired natural resource assets.

The Company intends to focus on acquiring producing or near-term producing assets or assets where value is trapped by virtue of a lack of capital, technical expertise or management focus. The Directors believe such trapped value may often occur in family controlled businesses and small companies or where the business or assets are considered to be non-core by a larger natural resources company.

In terms of geography, the Company intends to focus primarily on Asia, the Middle East and Latin America where the Directors collectively have prior knowledge and experience. However the Company will not exclude other geographic regions where an opportunity presents an appropriate investment proposition.

The Directors

The Directors believe the Board comprises a knowledgeable and experienced group of professionals with relevant experience for sourcing, evaluating, structuring and executing the Acquisition. The Company will not be externally managed and the Board will have full responsibility for its activities.

The details of the Directors are listed below:

John Guy William Davenport Davies, Non-Executive Director,

John has over 30 years experience in investment banking with Rowe and Pitman (1979-1981), Brown Brothers Harriman & Co (1981-1985) and Lehman Brothers where he became Co-Head of Institutional Equity Sales Europe (1985-1994). He was then appointed as a Managing Director of Bear Stearns International (1994-1996), before taking the role of Managing Director at Instinet (1996-1997), the electronic agency broker then owned by Reuters. In 1997 he joined Credit Lyonnais in London where he was Global Head of European Equity Sales. In 2001 he began his current specialist focus on hedge fund advisory and marketing, co-founding Altius Partners in partnership with Geneva based Mirabaud Group in 2001 and DNA Advisors in 2004. In 2006 he founded Davenport Capital Limited. He is currently a director of Davenport Capital. John holds an M.A. (Hons.) in Law from Emmanuel College, University of Cambridge.

John’s responsibilities will include overseeing the proper functioning of the Board, liaison with the financial adviser and broker to the Company, co-ordinating the Prospective Investors, liaising with the Shareholders on a continuing basis and overseeing the integration of the Acquisition or Acquisitions including the induction and development of new directors. He will also oversee that the regulatory requirements of all statutory bodies are met regarding all the Company’s financial and regulatory affairs.

Christopher John McAuliffe, Non-Executive Director,

Chris is an experienced industrials and resources banker with significant relationships across Asia. Until February 2008, Chris was Managing Director and co-head of Asia Pacific Industrials Group for Citigroup (HK). Prior to which he worked for 13 years with CSFB (including BZW) including 5 years as Managing Director and Head of Asia Industrials Group at CSFB (Singapore). Chris has originated and advised on a large number of key mergers & acquisition, debt, equity capital markets and private equity transactions in Asia, including many deals in the natural resources sector, notably:

  • Advising First Resources Limited, an Indonesian palm oil producer on their S$295m IPO on the Singapore Stock Exchange in 2007;
  • Advising GMR Group, an Indian conglomerate, on their 2009 acquisition of Indonesian coal mining assets for US$100m;
  • Advising Indika Energy Tbk, an Indonesian energy group with interests in coal mining, oil services and power generation on their US$300m IPO on the Jakarta Stock Exchange;
  • Advising China Coal Energy Company Limited, one of China’s largest coal mining companies, on their US1bn IPO on the Hong Kong Stock Exchange in 2006; and
  • Advising on the 2007 principal investment of US$150m into DP Cleantech (formerly Dragon Power), a leading Chinese biomass energy group.

Chris is a member and Vice Chairman of the Supervisory Board of Asian Bamboo AG, China’s largest bamboo producer, which listed on the Frankfurt Stock Exchange in 2007. Asian Bamboo AG grows, processes and distributes bamboo products, and had total revenues in 2011 of €90m. Chris is also an advisory board member of Asiasons Capital Group, an alternative asset investment and management group (predominantly involving private equity) focused on opportunities in emerging East Asia. The Group is listed on the Main Board of the Singapore Stock Exchange and has a market capitalization of circa US$500m as at August 2012. Chris holds a Business Law Degree LLB (Hons.) from Huddersfield University and an MBA from Bradford Business School.

He is a founder shareholder and Managing Director of Sprint Capital and Sprint Capital Management Limited. Sprint Capital is a Hong Kong based private equity investment manager, focused on undertaking investments in the mining and natural resources sector. Sprint Capital seeks to invest in resources which are in high demand across China and the wider Asian region (including high grade thermal and metallurgical coal, oil and gas, iron ore, potash and copper). Sprint Capital’s investment approach is to partner with strong management teams with a proven track record in bringing highly prospective exploration and development-stage projects through to production. Sprint Capital will not be a contracted adviser or an external manager to the Company but Christopher McAuliffe may introduce suitable acquisition opportunities that he identifies through his work with Sprint Capital. Sprint Capital will not be separately remunerated for such introductions, but will instead hope to gain through an increase in the value of its shareholding in Xplorer. There is no contractual or advisory relationship between Sprint Capital and Xplorer other than that described in paragraph 13(ii) of Part VII of this Prospectus. Chris will not be separately remunerated for such introductions; the terms of his appointment are laid on in Part VII, paragraph 7 of this Prospectus.

Chris will assist with all transaction activity related to the Acquisition or Acquisitions, including, identification, financial analysis, due diligence, contract negotiation and execution.

Jacqueline Lim (Hui – Erh Lim), Non-Executive Director,

Jacqueline has over 15 years of experience in London and Hong Kong focusing on corporate finance, cross-border mergers and acquisitions, equity capital market and private equity transactions. She started her career as a lawyer with Allen & Overy in London and was a Partner with Paul Hastings, Janofsky & Walker responsible for its equity capital markets practice in Hong Kong, advising on a number of landmark transactions in Hong Kong, including many deals in the natural resources sector, including Western Mining, Hidili, Titan Mining, SSRG, GMR and Dragon Power. Jacqueline then became a Partner and Head of China Investments at Asiasons Capital Group, an alternative asset investment and management group listed on the Singapore Stock Exchange. Jacqueline is a founder shareholder and Managing Director of Sprint Capital and Sprint Capital Management Limited. Jacqueline received her LL.B.(Hons.) and Masters Degree in Law from the University of Bristol, qualifying as a Barrister in England and a Solicitor in Hong Kong. She is fluent in Mandarin and Cantonese, as well as English. Jacqueline Lim may introduce suitable acquisition opportunities that she identifies through her work with Sprint Capital. Sprint Capital will not be separately remunerated for such introductions, but will instead hope to gain through an increase in the value of its shareholding in Xplorer. Jacqueline will not be separately remunerated for such introductions; the terms of her appointment are laid on in Part VII, paragraph 7 of this Prospectus.

Jacqueline will assist with all transaction activity related to the Acquisition or Acquisitions, including, identification, financial analysis, due diligence, contract negotiation and execution, as well as providing in-house legal advice.

John Roddison FCA, Non-Executive Director,

John is a chartered accountant (qualifying in 1977 with the Institute of Chartered Accountants of England and Wales) and is senior partner of Brown McLeod, a medium-sized accounting firm. John has built Brown McLeod into a specialist accounting firm with a select client base comprised of ultra high net worth individuals and a large number of clients in the Entertainment Industry covering Music, Film, Theatre and TV. His music clients include Pulp, Richard Hawley, Wretch 32 and The Kills and he has worked extensively in the film industry and acted as finance director for Parallel Pictures PLC, a film production company, which was admitted to AIM in 1998.

He also previously served as Finance Director for AIM quoted Silvermere Energy PLC, which owns oil and gas activities in the Gulf of Mexico, off the coast of Texas, USA. He left following the successful reverse takeover of the Mustang Island assets in August 2011, which valued the enlarged group at £4.25m.

John’s responsibilities will include overall control of the Company’s accounting function, including, audit systems, financial reporting, corporate finance, including, financial due diligence, managing capital requirements, debt, taxation and equity with particular reference to the Acquisition.

Corporate Governance

Members and responsibility

The Directors are responsible for the Company’s objectives and business strategy and its overall supervision. Acquisition, divestment and other strategic decisions will all be considered and determined by the Board. The Board will provide leadership within a framework of prudent and effective controls. The Board will set the corporate governance values of the Company and will have overall responsibility for setting the Company’s strategic aims, defining the business plan and strategy, managing the financial and operational resources of the Company and reviewing the performance of the officers and management of the Company’s business. The Acquisition will be subject to Board approval and in the event that it constitutes a Reverse Takeover, Shareholder approval will be sought.

Frequency of meetings

While the Board will schedule quarterly meetings, it will hold additional meetings as and when required.

Audit and Risk Committee

The Company has established an Audit and Risk Committee with delegated duties and responsibilities. The Audit and Risk Committee will be responsible, amongst other things, for making recommendations to the Board on the appointment of auditors and the audit fee, monitoring and reviewing the integrity of the Company’s financial statements and any formal announcements on the Company’s financial performance as well as reports from the Company’s auditors on those financial statements. In addition, the Audit and Risk Committee will review the Company’s internal financial control and risk management systems to assist the Board in fulfilling its responsibilities relating to the effectiveness of those systems, including an evaluation of the capabilities of such systems in light of the expected requirements for any specific acquisition target. The Audit and Risk Committee will meet at least four times a year, or more frequently if required.

Financial Management

The Company does not currently have a finance director and responsibility for financial management of the Company is undertaken by the Directors. Due to the limited number of financial transactions pre-Acquisition and the financial expertise of the Board, the Board believes this to be appropriate. Brown & McLeod, an accountancy practice where Mr Roddison is the senior partner, will provide bookkeeping services prior to the Acquisition. However, it is the Company’s intention to appoint a finance director to the Board, to the extent that a suitable candidate is not provided by the target business which is the subject of the first Acquisition.

Corporate Governance

The Company will observe the requirements of the Corporate Governance Code (the UK Corporate Governance Code, as published by the Financial Reporting Council). This is the corporate governance regime for England and Wales, the Company’s country of incorporation. As at the date of this Prospectus the Company is, and at the date of Admission will be, in compliance with the Corporate Governance Code with the exception of the following:

  • Given the size and non-executive composition of the Board, certain provisions of the Corporate Governance Code (in particular the provisions relating to the composition of the Board, the division of responsibilities between the Chairman and chief executive and executive compensation), are not being complied with by the Company as the Board considers these provisions to be inapplicable to the Company.
  • Until the Acquisition is made the Company will not have a nominations committee. Following the Acquisition the Board intends to put in place nominations committee. The Board as a whole will review the appointment of new members of the Board prior to the Acquisition, taking into account the interests of Shareholders and the performance of the Company.
  • Until a further Independent Non-Executive Director is appointed, the Board will not comply with the provision of the Corporate Governance Code that at least half of the Board, excluding the Chairman, should comprise non-executive directors determined by the Board to be independent. The Company intends to appoint an additional Independent Non-Executive Director following the Acquisition so that the Board complies with this provision.

At this stage of the Company’s development, the Board considers these three elements of the Corporate Governance Code to be inappropriate. The Company does have an Audit and Risk Committee and a Remuneration Committee, both of which are chaired by the Non-Executive Chairman. The Company will seek Shareholder approval at a general meeting in respect of the Acquisition if the Acquisition constitutes a Reverse Takeover. The Board intends to review its observance of the remaining aspects of the Corporate Governance Code concurrent with the Acquisition.

As at the date of this document, the Board has voluntarily adopted the Model Code for directors’ dealings contained in the Listing Rules. The Board will be responsible for taking proper and reasonable steps for ensuring compliance with the Model Code by the Directors.

Compliance with the Model Code is being undertaken on a voluntary basis, and the FCA will not have the authority to (and will not) monitor the Company’s compliance with the Model Code nor will it be able to impose any sanctions in respect of failure by the Company to comply.

Description of Xplorer’s ordinary shares

The securities subject to the Placing and Admission are ordinary shares of 0.1p each. The ISIN for the Ordinary Shares is GB00B8VWXF68. Each Ordinary Share rank pari passu for voting rights, dividends and return of capital on winding up.

Every Shareholder present in person, by proxy or by a duly authorised corporate representative at a general meeting of the Company shall have one vote on a show of hands and, on a poll, every Shareholder present in person, by proxy, or by a duly authorised corporate representative shall have one vote for every Ordinary Share of which he is the holder.

The Company must hold an annual general meeting each year in addition to any other general meetings held in the year. The Directors can call a general meeting at any time. All members who are entitled to receive notice under the Articles must be given notice.

Subject to the Companies Act, the Company may, by ordinary resolution, declare dividends to be paid to members of the Company according to their rights and interests in the profits of the Company available for distribution, but no dividend shall be declared in excess of the amount recommended by the Board.

Shares in issue

Enlarged Share Capital in issue following the conversion of the Placing on 31 March 2014

12,375,100

DIRECTORS, AGENTS AND ADVISERS

Directors

John Davies (Non-Executive Chairman)
Jacqueline Lim (Non-Executive Director)
Christopher McAuliffe (Non-Executive Director)
John Roddison FCA (Non-Executive Director)

Registered Office 24 Hanover Square
London
W1S 1JD
Company Secretary John Roddison FCA
Financial Adviser and Broker Allenby Capital Limited
3 St Helen's Place
London
EC3A 6AB
Placing Agent Optiva Securities Limited
2 Mill Street
London
W1S 2AT
Auditors Crowe Clark Whitehill LLP
St Bride’s House
10 Salisbury Square
London EC4Y 8EH
Registrars Share Registrars Limited
Suite E, First Floor
9 Lion and Lamb Yard
Farnham
Surrey GU9 7L
Legal Advisers to the Company Hamlins LLP
Roxburghe House
273-287 Regent Street
London W1B 2AD
Legal Advisers to Allenby DMH Stallard LLP
6 New Street Square
New Fetter Lane
London EC4A 3BF
Principal Bankers Royal Bank of Scotland plc
5 Church Street
Sheffield S1 1HF