History

Cove Energy plc (formerly Lapp Plats plc) was incorporated on 15 December 2003 with its primary activity being mineral exploration.  In January 2004 the Company acquired from Minmet plc exclusive rights of access to platinum and nickel data contained in a geochemical database of some 140,000 targets covering Sweden, Finland Norway and Ireland.

Cove Energy’s focus on oil and gas was outlined in May 2009 with a strategy to identify and acquire oil and gas assets in the early phase of the upstream life-cycle and mature them into marketable opportunities for the medium and larger oil and utility companies.  This coincided with the appointment of John Craven and Michael Blaha to the Board of the Company.  The Company’s initial geographic focus, within this new oil and gas strategy, was on Africa and the Mediterranean.  The Company had a mission to be opportunity driven with an objective to target assets in areas where larger oil companies were not yet active or had overlooked opportunities. Cove Energy also looked to seek out assets owned by companies in distress, which was a feature in mid-2009 as a result of a worldwide economic decline.

In June 2009 the Company stated its objective to operate with a minimum level of staffing to be supplemented with a larger experienced skills-pool of industry professionals from where it could draw on relevant experience on a case-by-case basis.  The Company also planned at the outset to partner and joint venture with investors and associates who will support Cove Energy with commercial skills and influence in areas where the Company intends to grow its business.

On 22 July 2009, Cove Energy announced that it had, jointly with Maurel & Prom (“M&P”), entered into the Call Option Agreement with Artumas Group Inc (“Artumas Group”).  Under the terms of the Call Option Agreement, Cove Energy and M&P were granted a call option to purchase certain interests in Mnazi Bay, Tanzania (“Tanzania Assets”) as well as the Mozambique Rovuma Offshore Area 1 and Mozambique Rovuma Onshore (“Mozambique Assets”).

Subsequently, on 18 August 2009, the Company, together with M&P, announced that it had negotiated an extension to the Call Option Agreement pursuant to which the Company’s and M&P’s call option period and exclusivity period was extended until and including 18 September 2009 in order to allow continuing legal, financial and technical due diligence investigation of the Mozambique Assets and Tanzania Assets.

Following the Company’s due diligence review at that date and subsequent negotiation of the structure of the transaction, the Company was deemed to be in contemplation of a transaction which would constitute a reverse takeover of the Company under the AIM Rules for Companies.

Cove Energy and M&P exercised their rights under the Call Option Agreement on 18 September 2009, when they announced to the market that was acquiring each of the Mozambique Assets and Tanzania Assets from Artumas Group for an aggregate total consideration of US$10,980,031 of which US$3,294,009 was payable by Cove Energy and US$7,686,022 by M&P.

In order to provide sufficient working capital for Cove Energy following these transactions the Company raised £42 million (before expenses) (equivalent to approximately US$68.2 million) by the issue of up to 210,000,000 New Ordinary Shares at a price of 20 pence per Ordinary Share. with institutional and other investors.