Suroco Energy Inc. has entered into a letter agreement dated effective July 17, 2008, for the arm's length acquisition of interest in the Suroriente Block, Arjona Field, Alea 1947 C Block and Alea 1848 A Block in Colombia (the "Acquired Interests") currently held by Alentar Holdings Inc., in exchange for 8,700,000 common shares in the capital of the Corporation at a deemed price of US$1.00 per share and 4,000,000 Contingent Value Rights. Upon completion of the Proposed Transaction, the Acquired Interests will be held by the Corporation's wholly owned subsidiary, NCT Corporacion Petrolera Latinoamericana S.L. ("NCT").
The Letter Agreement effectively amends and replaces the December 28, 2007 agreement entered into between the Corporation and Alentar for the acquisition by the Corporation of Alentar's interests in the Suroriente Block and Arjona Field in Colombia.
The Contingent Value Rights to be issued to Alentar upon completion of the Proposed Transaction will entitle Alentar to acquire one common share of Suroco for each Contingent Value Right deemed exercised. The Contingent Value Rights will contain terms such that 1,000,000 Contingent Value Rights will be deemed exercised upon the occurrence of a "Declaration of Commerciality" in either the Alea 1848 A Block or the Alea 1947 C Block, subject to a maximum of two Declarations of Commerciality per the Alea 1848 A Block and two
The Board of Directors and management of the Corporation feel strongly that the Proposed Transaction will result in a number of benefits and opportunities to the Corporation. Upon completion of the Proposed
Pursuant to the terms of the Letter Agreement and subject to receipt of applicable regulatory approval, the Corporation intends to acquire Alentar's interest in the Suroriente Block, the Alea 1848 A Block and the Alea 1947 C Block by acquiring the 35% of the outstanding securities of NCT P&G Corporation held by Alentar, a company incorporated under the laws of Barbados. NCT holds the remaining 65% of outstanding securities of NCT P&G Corporation.
Pursuant to the terms of the Letter Agreement and subject to receipt of applicable regulatory approval, the Corporation intends to acquire Alentar's interest in the Arjona Field by: (a) assignment of Alentar's interest in an
Upon completion of the Proposed Transaction, one nominee of Alentar, Juan Szabo, will be added to board of directors of the Corporation. Szabo is currently a consultant to Alentar.
Szabo has 38 years of experience in the international hydrocarbon business, has been a member of the Board of Directors of PDVSA Petroleo & Gas, Pequiven S.A. and Citgo Petroleum and has held the following executive positions: Chief Financial Officer of Petroleos de Venezuela S.A., President of Corporacion Venezolana del Petroleo and Executive Vice-President of Exploration and Production of Petroleos de Venezuela S.A. After retiring from Petroleos de Venezuela S.A., Mr. Szabo has acted as advisor to several national and international corporations.
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