As previously announced the Company acquired an 85.15% interest in Scotia in September 2004 and had an option to acquire an additional 13.5% interest. The Company has now exercised its option to acquire the additional 13.5% interest, and now owns 98.65% of the outstanding stock of Scotia. The Company will issue 142,000 restricted common shares at $7.00 per share in payment for the 13.5% interest in Scotia.
Garth Braun CEO, commented that, "The assets that we acquired through Scotia Petroleum Inc. have become strategically important to us. As a result of the extensive property examinations we have been conducting since last year, we have determined that it is very much in our best interests to exercise our option to purchase a further 13.5% of Scotia Petroleum Inc. This transaction increases our ownership in a significant region of Papua New Guinea that has historically proven to be rich in hydrocarbons."
The Company believes that Petroleum Prospecting Licenses 245 ("PPL 245"), 246 ("PPL 246"), and Petroleum Retention License 13 ("PRL 13"), all of which are held by Scotia, are some of its more prospective properties. An independent evaluation of PPL 246 by 3D-GEO of Melbourne Australia dated November 2004, has identified ten (10) leads that justify more intense examination and exploration for establishment of potential drill targets.
In addition, the Company is further evaluating the previously drilled Kuru gas prospect, both to confirm the presence of gas and also to further explore the possibility of discovering oil, as has been reported by others more recently on adjoining licenses with similar geologic features. The Company considers the existence of similar geological features on trend with its acreage to be of particular interest.
The Company is evaluating and exploring for energy resources on five Petroleum Prospecting Licenses and one Petroleum Retention License which have been granted to the Company and its majority owned subsidiary, Scotia Petroleum Inc. These licenses cover approximately 8.3 million acres in Papua New Guinea.
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