ZaZa Energy Corporation announced that it has entered into a definitive share purchase agreement with Vermilion Energy Inc., whereby Vermilion, through its wholly-owned subsidiary Vermilion REP SAS, will acquire 100 percent of the shares of ZaZa Energy France SAS for a purchase price of approximately $85.8 million, subject to customary closing adjustments, with an effective date of October 1, 2012 and an anticipated closing prior to year-end 2012.
ZEF's operating interests cover approximately 24,300 acres and a 100 percent working interests in the Neocomian Complex and Charmottes fields in the Paris Basin. Current production is approximately 850 barrels per day of light Brent-based crude oil. Proved Reserves at June 30, 2012, as evaluated by Gaffney, Cline & Associates, were estimated to be approximately 5.6 million barrels.
"This divestiture falls directly in-line with ZaZa's strategic objective to focus on further developing our core operating acreage in Texas," said Todd A. Brooks, Chief Executive Officer of ZaZa Energy. "It strengthens our balance sheet and provides us with additional working capital to drill in the Eaglebine and Eagle Ford plays. We have now amassed over 160,000 net acres between the two, including a dominant, nearly contiguous 90,000 net acre block in the Eaglebine located in the thickest part of the basin, which we are currently developing. Over the coming quarter, we look forward to providing our shareholders with updates on our progress and believe the next year will be an excellent year for our Company."
Upon closing, ZaZa intends to use a portion of the proceeds from the disposition to pay-down part of its remaining senior secured notes and accelerate its drilling program in its core operating acreage in Texas. Additionally, as part of the Paris Basin Agreement signed with Hess in July 2012, ZaZa will hold $15.0 million of the proceeds in escrow until all Paris Basin exploration permits are successfully transferred to Hess.
The acquisition remains subject to customary conditions and receipt of all necessary regulatory approvals.
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