Canoel announced the divestment of its interest in the Tunisian blocks of Jorf, Bazma and Sud Tozeur (the "Tunisian Blocks"), which it acquired in late November 2008.
Pursuant to a Termination and Release Agreement, Canoel and CYGAM Energy Inc. ("CYGAM") have terminated the Farmout Agreement wherein Canoel was granted the opportunity to participate in certain oil and gas operations in order to earn an interest in the Tunisian Blocks, as well as the Memorandum of Understanding ("MOU") whereby Canoel acquired the opportunity to participate in oil and gas operations in order to earn a further interest in certain of the Tunisian Blocks.
Pursuant to the Termination and Release Agreement, CYGAM has agreed to pay $621,278 (the "Termination Fee"), an amount equal to those costs paid by Canoel pursuant to the Farmout Agreement, in exchange for the assignment and transfer of any rights earned by Canoel under the Farmout Agreement or the MOU. CYGAM has agreed to pay $50,000 of the Termination Fee to Canoel within 5 days of the approval of the Termination and Release Agreement by the board of directors of both of CYGAM and Canoel, and the balance of the Termination Fee, $571,278, no later than March 31, 2012. Further, Canoel has surrendered its deposit of $490,000 paid to CYGAM pursuant to the terms of the Farmout Agreement (the "Deposit"), and CYGAM has agreed to pay Canoel an amount up to the amount of the Deposit, subject to certain conditions.
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