Lion expects sale proceeds and loan repayments totalling over $5,720,000 (US$4,350,000) plus proceeds from the sale of oil inventory held to the date of sale totalling approximately $1,480,000 (US$1,100,000) an amount net of Indonesian Government entitlements at completion in mid to late January 2005.
The purchaser is PT Ilham Treda Industri (or nominee acceptable to Lion), an entity at arm's length to Lion. The sale is of the shares in Indonesia Prima Energy Services Limited (a company that in turn holds all the shares in PT Prima Jasa Energi that owns and operates a drilling rig and heavy equipment in Indonesia) and of the shares in Kalrez Petroleum (Seram) Limited (a company that owns a 100% interest in the Bula oil and gas tenement).
Kalrez Petroleum (Seram) Limited also owns a 2.5% interest in the Oseil oil and gas tenement, which asset will be freely transferred out to another Lion subsidiary before completion.
The sale is subject to fulfilment of these conditions by 7 January 2005 (or as may be agreed or waived):
(a) Lion shareholders approving the sale under ASX Listing Rule 11.2 at a meeting expected to be held in early January 2005.
(b) The 2.5% interest in the Oseil tenement being freely transferred out to another Lion subsidiary.
(c) Indonesian government consents to the transfer out of the Oseil tenement, and to the transfer of the shares in the subsidiaries being sold.
(d) An entity holding a share in one of the subsidiaries on trust transferring that share as directed by the beneficiary.
Lion expects to apply nearly the whole cash proceeds (net of transaction costs) in acquiring (by purchase or farm-in) oil or gas tenements in the proximate future as opportunities arise. Lion does not intend to pay a dividend, or return of capital, as a result of this sale.
Most Popular Articles