Sefton Resources Inc., a British Virgin Island corporation focused on oil and gas exploration and production, indicated Thursday its interest in acquiring producing petroleum assets in Indonesia.
The Development Agreement
The board of directors of Sefton (the Board) is pleased to announce the Company has entered into a development agreement (the Development Agreement) with UTAS Petroleum Services Limited (UTAS), a company controlled by Rob Shepherd, an experienced and well respected oil and gas executive with over 8 years of experience as an executive of AIM quoted companies (see www.utaspetro.com). UTAS was formed by Shepherd in 2012 to advise companies engaged in or investing in the oil and gas exploration and productions sectors. Using Shepherd’s extensive industry experience and financial contacts, particularly in emerging markets, UTAS advises clients on business strategy particularly new country entries, mergers and acquisitions, contractual negotiations, listings and capital raisings, due diligence, farm outs and strategic partner searches.
Rob Shepherd is an engineer by background who started his career at Shell before taking a number of financial positions in oil and gas industry. He was Finance Director of AIM quoted Dominion Petroleum which was acquired by Ophir Energy in 2012, a non-executive director of FTSE-250 listed Imperial Energy which was acquired by ONGC in 2008, and recently the Chief Executive of the dual-quoted (AIM and ASX) Azonto Petroleum until earlier this year. Shepherd has an extensive network in both Europe and Asia, a key factor in successful transaction execution in this sector.
The Development Agreement has been carefully constructed, and the Board, having taken appropriate advice, believes it to be in the best interests of Sefton’s shareholders in light of the Company’s current situation. Under the Development Agreement, Sefton and UTAS have entered into an unincorporated joint venture (the JV).
Under the terms of the Development Agreement, the Company will make an advanced payment under commercial terms of $786,900 or GBP 500,000 (the Payment Advance) to UTAS to allow the JV to progress the due diligence and possible funding arrangements for certain oil and gas properties in Indonesia which have been identified as potential target assets (the Potential Transaction).
All activities undertaken and expenditure made by UTAS in relation to the Potential Transaction require pre-approval by the Company. Furthermore, a JV committee will be formed on which Directors of the Company will form a majority of the representatives and which will be responsible for the decisions made at all levels of the JV. The Board will receive updates on the progress of the work performed on a regular basis.
Under the terms of the Agreement, Rob Shepherd will be paid a market day rate on a monthly basis from the proceeds of the Payment Advance. With the exception of these payments, neither UTAS, nor any of the individuals associated with it, will personally profit from the terms of the Development Agreement.
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