WHL Energy Updates on Seychelles, Australia Assets
Australian energy company WHL Energy Limited (WHL Energy or the Company) announced a number of key developments relating to its assets in the Seychelles and Australia.
OFFSHORE SEYCHELLES (WHL Energy 100 percent)
WHL Energy has been informed that the Letter of Intent with a leading oil and gas company regarding the Company’s Seychelles project has been terminated.
The potential farminee has notified the Company that it is withdrawing from any further negotiations at this time as it has been unable to formalize its Board approval. The original proposal was valued between $45.9 and $55.1 million (AUD 50 and AUD 60 million) and was considered by the Company to be a fair reflection of the value the Company had placed on the Seychelles acreage. The potential farminee had noted that timing issues on the proposed Seychelles farmin work commitments needing to compete with its large portfolio of global developments for funding at this time.
WHL Energy Managing Director, Steve Noske, said “that while the decision was disappointing, the potential farminee proposal had supported the Company’s internal valuation and view regarding the prospectivity of the Seychelles. The proposed farmin transaction had also provided independent third party verification on the body of technical work completed by the Company along with the valuation of the Seychelles acreage.”
"The Company and the proposed farminee had made substantial progress towards formalizing a binding Farmin Agreement. The potential farmin had progressed to the stage where:
- The top 100 Global Fortune 500 Company had completed its internal due diligence on the project and agreed with WHL Energy’s confidence in the oil prospectivity of the Seychelles
- The proposed farminee had designed a $50-$60 million program to meet farmin commitments and further develop the Seychelles project’s prospectivity; and
- The Government of the Republic of the Seychelles had reached agreement on the terms related to the proposed farmin.
That following considerable due diligence, the formalization of the proposed farmin was prepared for consideration by the potential farminee’s Board, where the Seychelles project had to compete technically and economically with other opportunities worldwide and to fit within its budget constraints.”
“Unfortunately, a positive decision has not been forthcoming and while it is highly disappointing that the potential farminee partner has elected not to proceed, their work program had endorsed the technical and commercial merits of the Seychelles acreage,” Noske said.
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