Universal Power Corp. announced that its wholly owned subsidiary Cabanas Business Group Ltd will be exercising options to increase ownership in Kunene Energy (Pty) Ltd by a further 70% following which, Cabanas will hold 90% of all the issued and outstanding shares in the capital of Kunene. The completion of the option exercise will allow Universal to proceed with work expenditures on Blocks in which Kunene holds an interest. Closing of the acquisition is subject to TSX Venture Exchange ("TSX-V") approval.
Pursuant to the terms of the three Option Agreements each dated September 06, 2007 Cabanas will acquire the additional 70% of all the issued and outstanding shares in Kunene from Philco Forty Four (Pty) Ltd, Philco Forty Five (Pty) Ltd and Philco Fifty Ltd. The total cost of the 3 options is $5.6 million US and the Company will pay consideration as follows; $1.5 million US cash, incur $2 million US in work expenditures, issue three million common shares in the capital of the Company at a deemed price of $0.70 US per share and issue three million common share purchase warrants. Each Warrant entitles the holder thereof to acquire one (1) common share in the capital of the Company at an exercise price of $0.70 per share at any time until January 17, 2010.
Upon completion of the acquisition, the Company will have a 2.7% carried interest in Block 1711 and a 90% working interest in Block 2713A&B through its investment in Kunene Energy (Pty) Ltd. Both concessions are off-shore Namibia, Africa. In addition, the Company has recently signed an LOI to acquire a 30% carried interest in block 2815 located off-shore Namibia, Africa.
Sintezneftegaz, the operator of the Kunene No. 1 well on Block 1711 offshore Namibia has advised drilling operations are continuing beyond the originally proposed targeted depth of 4,400 meters. The government of Namibia has classified Kunene No. 1 as a "tight hole," meaning no information regarding the well may be released until such time as the Namibian government determines to make the information public.