Houston American Energy Corp., announced the execution of a definitive Purchase and Sale Agreement that provides for the sale of all of its interest in the Caracara Association Contract and related assets in Colombia to an undisclosed company.
The Purchase and Sale Agreement, entered into by Hupecol Caracara LLC as the owner/operator of the Caracara Prospect, and effective as of January 1, 2008, provides for a sale price of $920 million, subject to certain closing adjustments based on oil price fluctuations and operations between the effective date and the closing date. Pursuant to its investment in Hupecol Caracara LLC, Houston American holds a 1.594674% interest in the Caracara Prospect and will receive its proportionate interest in the net sale proceeds after deduction of commissions and transaction expenses.
Completion of the sale of the Caracara Prospect is subject to satisfaction of various conditions set out in the Purchase and Sale Agreement, including the granting of all consents and approvals of the Colombian governmental authorities required for the transfer of the assets to the purchaser.
Mr. John Terwilliger, President and Chairman of Houston American, stated, "The execution of the Purchase and Sale Agreement is the culmination of the previously announced efforts of Hupecol LLC to selectively monetize assets. We believe the terms of the proposed sale are favorable to Houston American shareholders. The proposed sale does not affect our largest working interest exploration properties in Colombia that are not included in the transaction and are presently expected to continue to be operated by Hupecol."
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