Rocksource has signed a strategic asset transaction with Valiant Petroleum Norge AS (Valiant). Through this transaction Rocksource has strengthened its financial base whilst retaining exposure to the significant upside in its NCS portfolio.
The asset transaction includes sale of a 13 percent interest in the Norvarg discovery, leaving a 7 percent interest with Rocksource, and an average reduction of about 50 percent in the Company's equity stakes in a further 12 exploration licenses. As consideration Valiant will pay NOK 60 million in cash and will cover NOK 200 million in exploration cost on Rocksource's remaining license interests on the NCS (Carried Costs). The implied value of Rocksource's NCS portfolio from this transaction represents a premium to the current market valuation of Rocksource.
Rocksource CEO Chris Spencer commented on the transaction, "We are pleased to have completed this agreement with Valiant, which resolves our short to medium term financial constraints, while at the same time retaining material upside from our NCS portfolio. Following recent months with extensive strategic reviews, we are convinced that this is the best solution for our shareholders, creating a strong foundation on which to re-establish Rocksource as an active explorer on the NCS."
Upon completion of the transaction Rocksource will be funded into the Company's next drilling campaign.
Rocksource is currently establishing a drilling campaign expected to commence early 2013, with a minimum of three NCS wells targeted for drilling next year. The Company holds ownership interests in 14 NCS licenses, including presence in the North Sea, the Norwegian Sea and the Barents Sea.
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