Leni Gas and Oil plc (LGO) announced the signing of a definitive Sale and Purchase Agreement (SPA) for the divestment of its Spanish assets for a cash consideration of $9.8 million (EUR 8 million). A non-refundable deposit against the consideration has been paid by the buyer to obtain exclusivity to complete the transaction by the July 27, 2012.
Neil Ritson, Chief Executive commented:
"The sale of Spain provides LGO with a strong balance sheet and enables the Company to focus on significantly increasing its oil production in Trinidad which will now be the focus of operations. LGO has several development projects and step-out exploration opportunities within Trinidad's prolific, but under explored, onshore basins. We are very excited to be able to participate in the vibrant onshore oil development activities in Trinidad to which LGO's expertise and capital can be effectively applied. "
An SPA has been signed with a private buyer to which LGO will sell all the outstanding shares in Cyprus registered company, Leni Investments CPS Limited, a company which holds 100% of the shares in Compania Petrolifera de Sedano S.L. (CPS). CPS is the sole license holder to the La Lora Production Concession and the Basconcillo, Huermerces and Valderredibles Exploration Licences in Northern Spain.
The consideration of $9.8 million (EUR 8 million) is to be paid in cash on completion. A $245,280 (EUR 200,000) non-refundable deposit against the consideration has been committed by the buyer to obtain exclusivity to complete the transaction by the July 27, 2012. There are no outstanding due diligence matters and the sale is conditional only on the payment of the balance of the consideration and the transfer of the share ownership. A daily penalty of $61,320 (EUR 50,000), in addition to the consideration, applies if completion does not occur on or before the July 27, 2012, accruing up until the August 31, 2012 when the SPA will be automatically terminated.
Proceeds from the transaction will be used in the Company's existing operations, notably in Trinidad where an active work program on the Goudron Field is now underway and additional work is also planned in Moruga North and in the Cedros Peninsula.
In light of LGO's recent success with the work over of five wells on the Goudron Field the Company has decide to proceed initially with the acquisition of the Field on a 100 percent basis. LGO is continuing discussions with Range Resources regarding its potential participation on Goudron, under the previously announced Heads of Agreement with Range Resources. LGO will update the market on any further developments in due course. The Competent Persons Report on the reserves of the Goudron Field, which was commissioned from Challenge Energy Limited, is expected to be published in August.
Most Popular Articles
From the Career Center
Jobs that may interest you