"Successful completion of the acquisition will position Ottoman as a major player in the Philippines and should enable it to become a significant oil producer, hopefully by the end of the year.
In addition, the farmout to Bentley on very attractive terms, demonstrates the current and growing industry interest in Philippines' acreage. This also underpins an industry-based benchmark value, eliminates the Company's direct financial requirements and substantially reduces the Company's exploration and development risk and exposure going forward. Bringing the Calauit oil field on production will enable the Company to self-fund its planned aggressive seismic and drilling programs in the years to come and to seek out similar production opportunities."
Ottoman will pay AustralAsian Energy Ltd ("Vendor") the following consideration for its 50% equity holding in NorAsian:
-15,000,000 Ottoman Shares and 7,500,000 Ottoman Listed Options (20 cents, December 1, 2006) and A$2,500,000 in cash.
When aggregate production from the Calauit License area (SC50) reaches 500,000 barrels of oil: -5,000,000 Ottoman Shares and 10,000,000 Unlisted Options (30 cents, December 31, 2007*)
When aggregate production from the Calauit License area (SC50) reaches 1,000,000 barrels of oil, a further: -5,000,000 Ottoman Shares and 10,000,000 Unlisted Options (30 cents, Dec 31, 2007*)
The Ottoman Securities issued at completion, shall be subject to a voluntary escrow period of 12 months unless a formal takeover offer is made for Ottoman shares or the Calauit 1B well is re- entered. (*) If the Unlisted Options are issued after 31 October 2007, the Options are exercisable at any time on or before June 30, 2008.
The acquisition is subject to a number of terms and conditions, including due diligence, completion of necessary capital raising and formal approval by Ottoman's shareholders. Full details will be set out in the appropriate Notice of Meeting.
NorAsian Limited has entered into a Farmout Agreement with Bentley International Oil Limited whereby Bentley has the right to earn a 30% interest in each of SC50, SC51 and SC55.
Michael Nugent, President of Bentley International Oil Ltd said:
"Bentley is very pleased to be participating with NorAsian and Ottoman in the further development of Service Contracts 50, 51 and 55 located in the Philippines. The opportunity to join the re-development of the Calauit oilfield, using horizontal drilling technology will provide the production revenue to advance the additional world class drilling targets that have been identified on this 3.7 million acre land position. On the strength of this transaction, Bentley plans to establish a strong presence in the Philippines, a region it believes offers significant opportunity."
Bentley will pay an aggregate total of approximately US$9.5 million to earn a 30% interest, effectively valuing NorAsian's 70% interest at US$21.67 million (A$28.5 million).
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