Victoria announced earlier this year that it had agreed commercial terms to acquire a further 15.2% but it subsequently discovered a problem with the vendors' title and suspended the proposed acquisition. Negotiations have continued and now, having resolved the title issues, Victoria has agreed to proceed with the transaction and has further agreed to increase the purchase to cover the entire minority interest.
The consideration for the acquisition is to be satisfied by US $3.2 million cash, the issue of 1,230,000 new ordinary shares in Victoria, the waiver of Victoria's outstanding claim of US$2.6 million against the vendors of the 74.8% of SGI acquired in November, 2004 and release of 1,855,000 shares from escrow. A total of 3,734,314 shares, are to be held in escrow until April 30, 2006 in support of warranties that have been given by the vendors.
A recent report by independent reservoir auditors DeGolyer & MacNaughton estimated an expected recoverable gas resource for the field surrounding the first exploration well at West Medvezhye of half a trillion cubic feet of gas.
Chairman Kevin Foo said today "I am very pleased that we have been able to achieve a breakthrough and bring these negotiations to a conclusion. This will allow our shareholders to enjoy the benefits of 100% ownership of our exciting discovery at West Medvezhye."
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