The transaction will be effected through the sale of 100 percent of the stock of Syntroleum International Holdings, Ltd. and Syntroleum International Holdings Company. Through a subsidiary, Syntroleum International Holdings, Ltd. and Syntroleum International Holdings Company own Syntroleum's 25 percent cost bearing interest in Oil Mining Lease ("OML") 113, which includes the Aje field, and its 20 percent interest in the Ajapa field in OML 90. Both fields are located off the coast of Nigeria.
EER has paid Syntroleum a non-refundable $2 million deposit, and will also pay an additional $10 million to Syntroleum by April 1, 2007, or at the time EER completes its raising of additional capital pursuant to any form of private placement or public offering, whichever occurs first. Payments of an additional $13 million could be earned from future farm-outs of the Aje field and initial production from the Aje and Ajapa fields. Closing of this transaction will occur on or before January 31, 2007.
"The monetization of our upstream exploration and development interests through this transaction is beneficial to Syntroleum on several fronts," said Jack Holmes, president and CEO of Syntroleum. "The elimination of both our capital cost obligations and the commitment of our management resources to upstream activities, coupled with the proceeds realized from the sale will allow us to more closely focus on the commercialization and funding of our portfolio of technologies on a global basis."
Previously, EER and Syntroleum's subsidiary, Syntroleum Nigeria, entered into agreements whereby EER obtained a 7.5 percent interest in OML 113, and a 20 percent interest in the Ajapa field.
Syntroleum Corporation owns a proprietary process for converting natural gas or synthesis gas derived from coal and other carbon-based feedstock into synthetic liquid hydrocarbons. The company plans to use its technology to develop and participate in natural gas and coal monetization projects in a number of global locations.
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