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Publish Date : 08-Aug-2013

VANE is pleased to announce that it has entered into a conditional sale and purchase agreement (the "SPA") to acquire the entire issued share capital of a company that is in the process of renewing two hydrocarbon exploration licences in Germany, covering an area of approximately 635,000 acres (the "Licences"). The SPA is conditional upon the renewal of the Licences by the licencing authorities which is anticipated to be in Q4 2013.

Matthew Idiens, CEO of VANE, commented: "We are extremely pleased to be able to report this positive development to shareholders. We have been working closely with unconventional oil and gas specialists whom we are intending to bring on to the team and hope to be able to announce progress on this soon. We believe this transaction represents a significant opportunity to enter the unconventional oil and gas arena in a highly prospective geological setting with multiple target zones."

"As with all European shale gas projects, there is an element of risk, particularly from the environmental lobby at this stage of the development of a new industry , but we feel the potential returns and timing of this opportunity represent an excellent risk reward ratio and it has the potential to add significant value to the Company."

Material acquisition terms

Under the terms of the SPA, VANE is required to make an initial non-refundable payment of €300,000 which is payable in order to secure the SPA following approval of the resolutions relating to the recent subscription which are to be considered at the General Meeting on 15 August 2013, further details of which were announced on 30 July 2013 (the "Resolutions"). In the event that the Resolutions are not passed then this payment is not required to be made and the SPA will cease to be effective.

In the event that the Resolutions are passed, a further €100,000 is to be paid following the renewal of the Licences at which point the acquisition will be completed and VANE will become the 100% owner of the entity to which the Licences have been granted. There can be no guarantee of when renewal of the Licences will be forthcoming, if at all.

The SPA provides that no liabilities will transfer to VANE at completion of the SPA save that the Licences will be subject to an overriding royalty interest (ORRI) of 2.5% of gross sales of hydrocarbons less certain costs.

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