Energem Resources in Talks with CNODC for African Exploration Deal
Energem Resources and its controlled subsidiary FirstAfrica Oil and China National Oil and Gas Exploration Development Corporation on behalf of its parent, China National Petroleum Corporation Limited have entered into an agreement in principle on upstream projects in Africa. These talks have been ongoing since March, 2005.
The objective of the negotiations is to create within FAO the vehicle for new up-stream exploration and development projects of CNODC on the continent of Africa. This would occur through the vend-in to FAO by CNODC of a certain African oil and gas exploration project presently being pursued by CNODC and certain of CNODC's existing African projects. Energem would simultaneously proceed with the vend in to FAO of certain of its African up-stream assets, some of which are presently subject to an option or right of first refusal by FAO.
The net effect of these transactions, if successfully concluded, would be a 51% holding or such other controlling interest as may be agreed in FAO on the part of CNODC, who would provide substantial technical and financial capacity to take the enlarged FAO forward and a minority holding on the part of Energem who would continue to provide to FAO the benefit of its African logistical and operation capacity and its network of relationships across the continent.
While management is proceeding forward with negotiations and anticipate a successful conclusion, there can be no certainty that this will occur. The transaction is subject to, inter alia, the acquisition by CNODC of the further asset to be vended into FAO, the process of due diligence and independent valuations by all parties involved and regulatory and other approvals as may be required.
As advisers in this process Energem Resources Inc. have engaged Macquarie
Bank Limited, CNODC is advised by Standard Chartered Bank and FAO has engaged
N M Rothschild & Sons Limited.
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