Exoma Energy said Wednesday that it has been unable to obtain the remaining approvals from the Chinese government relating to a supplemental farm-in deal and capital acquisition contract inked on Sep.10, 2012 with state-backed China National Offshore Oil Corporation (CNOOC).
In its disclosure, Exoma said, "Accordingly, both agreements lapsed Dec. 31, 2012 and CNOOC's additional investment in Exoma as previously announced will not proceed."
Commenting on the unexpected turn of events, Exoma's CEO Rob Crook told Rigzone in an interview, "This came as a bit of a surprise to me. I am not aware of any reason why the [farm-in and capital acquisition] deals will not go through."
Exoma is at present reviewing the impact of CNOOC's investment in the company not proceeding as planned. The company said that it is keen to have further discussions with CNOOC about ways to continue working together on new ventures, as well as on Exoma's current permits.
On Sep.10, 2012, CNOOC signed a supplemental farm-in contract with Exoma which would see the Chinese company's participating interest in the Galilee joint venture for oil and gas exploration permits - ATP 991P, ATP 996P, ATP 999P, ATP 1005P and ATP 1008P - increase from 50 percent to 60 percent. Under the agreement, CNOOC was to spend $13 million (AUD 12.7 million) on the supplemental farm-in, bringing up its investment in the Galilee JV to $65 million (AUD 63 million).
The supplemental farm-in builds on a first farm-in agreement inked between Exoma and CNOOC on Dec. 9, 2010. The contract signed in 2010 allows for CNOOC to earn stakes in the five oil and gas exploration permits in the Eromanga and Galilee Basins. The five permits cover an area of approximately 10,425 square miles (27,000 square kilometers). Exoma holds a 50 percent stake in each of the permits. CNOOC had invested $51 million (AUD 50 million) into the farm-in agreement.
The JV also allows CNOOC to earn participating interests in new oil and gas exploration permits - ATP 1127P, ATP 1130P, ATP 1137P and ATP 1150P - which were awarded to Exoma on June 26, 2012. The four new permits lie in the Eromanga and Galilee Basins as well, and they extend across 7,336 square miles (19,000 square kilometers) of land.
Exoma also confirmed Sep.10, 2012 that CNOOC was planning to acquire 13 percent of its issued capital with $11 million (AUD 10.7 million). The aim of the capital acquisition was to increase CNOOC's stake in Exoma to 19.9 percent.
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