Gold Oil PLC has entered, through its 100% owned subsidiary Gold Oil Caribbean Limited, into an Option Agreement for $1 to purchase ninety-five percent (plus five percent in the name of Gold Oil subsidiaries and the parent, held in trust for Gold Oil Caribbean Limited) of all of the issued shares in Inversiones Petroleras de Colombia S.A. ('Invepetrol') for a consideration of $4 million.
Invepetrol owns an 18.05% participating interest in the Union Temporal II & B that is the Operator and License holder of the Nancy, Burdine and Maxine oil fields in the Putumayo Basin in Southern Colombia. The Company already owns a 40% interest in Union Temporal and this will take the Company's total interest to 58.05% (27.29% of net production.)
The Option Agreement allows thirty days for due diligence on Invepetrol and gives the Company the right to enter into a Sale and Purchase Agreement for the purchase of the shares with an initial payment of $1 million and the balance at a later date.
For the year ended December 31, 2007, the profits before taxation and gross assets as shown in the unaudited joint venture accounts attributable to the additional interest in Union Temporal being acquired are £79,000 and £510,000 respectively (based upon a conversion rate of £1=3,635 Colombian pesos).
Company CEO Gary Moore said, "We entered into this Option Agreement as we saw an opportunity to acquire some additional lowcost producing reserves in a field we are familiar with as well as giving us greater control of the field and thus allowing us to push development of the fields at a faster rate."
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