The Company today announces that it has entered into a merger agreement to acquire Whittier Energy Corporation, a NASDAQ listed onshore US Gulf Coast exploration and production company. The terms of the merger agreement value the entire issued and to be issued share capital of Whittier at US$145 million (approximately £74 million),  plus the assumption of an estimated US$43 million of net liabilities. The Acquisition is expected to complete in late April 2007, subject to receipt of Whittier shareholder approval. 

The Acquisition is to be financed from approximately equal amounts of existing cash plus new equity and debt. For these purposes, £26.12 million (approximately US$50 million) has been raised through an institutional placing at 16p and a new US$100 million bank debt facility has been arranged with Natixis.

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