Leed will acquire Challenger's interests in these Main Pass assets effective as of August 1, 2007 in exchange for assuming Challenger's portion of the asset retirement obligations relating to these blocks. Leed already owns non-operated interests in the Main Pass 64 and 65 leases, and Challenger's interests in these leases described below will be additional to the interest Leed already owns. As part of the deal, Leed will also acquire interests in the southern half of Main Pass block 57. The southern half of Main Pass block 57, which is adjacent to Main Pass Block 64, is producing a marginal quantity of oil from one well.
In accordance with a pre-existing agreement the Company must offer to a third party the opportunity to acquire 75% of the interest that Leed proposes to acquire under the SPA. Within thirty days of the offer, the third party must then elect whether it wishes to participate.
A further announcement confirming Leed's final interests in the Main Pass assets and stating the revised reserve estimates for Leed's interests in the Main Pass assets will be made at the appropriate time.
Howard Wilson, President and Chief Executive of Leed Petroleum PLC, commented:
"The Company's management team knows the Main Pass area very well. This is a solid, low risk acquisition that, upon completion, will immediately increase the Company's revenues and reserves."
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