Protec Industries Inc. announced that, following the signed agreements announced in last month's news release, the Company has successfully arranged the financing for both Ukraine oil and gas projects.
Protec has negotiated and signed a Farm-Out Joint-Venture (JV) Letter Agreement with Eurofund Capital Management Co. Ltd. and a high-profile 3rd party whereby the Company's new JV partners pay 100% of Protec's working interest to earn 50% of Protec's revenue share and an Option to participate with Protec in any new oil and gas projects in which Protec acquires an interest.
The JV requires Protec's new partners to issue an irrevocable "Letter of Credit" (LC) for USD 30 million. The Parties have agreed to execute a final Joint-Venture Agreement within 30 days, assigning Protec as "Operator" of the Joint-Venture. As Operator, Protec will immediately draw the first tranche of $1 million to begin funding the Ukraine projects.
According to standard oil industry operating procedures, Protec will receive AFE's from the Ukrainian operating companies (KrymTexasNafta Ltd or "KTN" - Aktash Oil Field and EEU Ltd - Moshkarev Fields) based upon pre-approved work programs and budgets. These properly executed AFE's will serve as the basis for release of funds from the LC to Protec and from Protec to its Ukraine operations.
The Company expects to complete all paperwork and transfer of funds in time to conduct field operations, including the drilling of a new well at Moshkarev, during the good weather season. With the cooperation of KTN's Ukrainian partner, Protec also expects to immediately begin remediation of the best oil wells at the Aktash field.
Protec is very enthusiastic about the Company's prospects for near-term oil-production revenues from its Ukrainian oil and gas interests.
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