The sale price is US$75 million in cash and is subject to adjustments for working capital as at the effective date of July 1, 2004, and for interest and cash flow movements from the effective date until completion, which is expected to take place in the first quarter of 2005. Proceeds from the sale will be credited to the Company's borrowing base debt facility, creating additional headroom and flexibility to fund further acquisitions and the Group's ongoing organic capital investment program.
The Group's net production from its Ross and Blake interests averaged approximately 2,500 barrels of oil equivalent per day in 2004. The Group's proven and probable reserve base will reduce by some 6 million barrels as a result of the sale.
Completion of the acquisition is subject to the approval of the UK regulatory authorities and, in respect of certain of the interests, to partners' pre-emptive rights.
Roy Franklin, Chief Executive of Paladin Resources plc, commented:
'Since acquisition, both fields have performed in line with our original expectations. However, the Company has grown rapidly over the past few years and as a result these interests are no longer material in a corporate context. We are delighted to have reached agreement with Summit on terms which both companies find attractive.'
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