PetroHunter Energy Closes Sale of Stake in Beetaloo Basin
PetroHunter Energy closed the transaction to sell and assign an undivided 25% working interest in PetroHunter's four exploration permits covering seven million acres in the Beetaloo Basin of the Northern Territory, Australia, to Falcon Oil & Gas Ltd., a non-arm's length party. As PetroHunter had sold a 50% working interest in this prospect to Falcon in September 2008, this increases Falcon's working interest to 75%. With the sale of the additional interest, Falcon's Australian subsidiary will now be the operator of the Beetaloo Basin project.
As consideration for the additional working interest, Falcon relieved PetroHunter from the $5 million loan made in October 2008 and released the collateral securing that loan, assumed current PetroHunter payables related to the Beetaloo Basin project in the amount of AUD$1.5 million (approximately US$1.18 million), and reassigned Falcon's 25% working interest in five wells (including the 40-acre tract surrounding each well) located in PetroHunter's Buckskin Mesa project in the Piceance Basin in Rio Blanco County, Colorado, back to PetroHunter. Falcon had acquired the 25% working interest in the five Buckskin Mesa wells in November 2008. In addition, Falcon assigned its rights to approximately $855,000 of completion capital remaining from the Buckskin Mesa project to PetroHunter.
In addition to transferring the additional 25% working interest, PetroHunter assigned to Falcon its Beetaloo project inventory and its operator bonds, and indemnified Falcon against claims and liabilities relating to plugging, abandonment and site reclamation costs for the five Buckskin Mesa wells.
This transaction provides PetroHunter with access to 26.1 million shares of Falcon stock that had been previously restricted. PetroHunter has placed these shares in an escrow account which will provide for scheduled releases of the shares.
Shareholder Relationship and Director Relationship
Marc A. Bruner, the Chairman, CEO and President of Falcon, continues to be a significant shareholder of PetroHunter. The negotiation and entering into of the non-binding letter of intent and the definitive agreements were governed by a committee of the independent directors of Falcon.
Carmen J. Lotito, a director of PetroHunter, is a director of Falcon Oil & Gas Australia Pty Ltd., Falcon's subsidiary that owns the 75% working interest. PetroHunter has advised Falcon that Mr. Lotito abstained from voting when the PetroHunter Board of Directors voted to approve the agreement.
- Ancient Rock Presents New Opportunity for Falcon (Sep 14)
- PetroHunter Energy Gets Extension from Secured Lenders (Mar 10)
- Falcon Enters Agreement to Secure Financing for Australian Acquisition (Dec 07)