Verenex Energy has announced the status of its discussions with representatives of the General People's Committee (the "GPC") of Libya in connection with the proposed sale of Verenex.
As previously disclosed, Verenex entered into an acquisition agreement with CNPC International Ltd. ("CNPCI") on February 24, 2009 (the "CNPCI Agreement") under which CNPCI agreed to make an offer to purchase all of the outstanding Verenex Shares, on a fully-diluted basis, at a price of Cdn$10 per share and to also fund a Cdn$47 million approval bonus to the Libya National Oil Corporation (the "NOC"). Consent by the NOC to the offer by CNPCI is required under the Exploration and Production Sharing Agreement for Area 47 (the "EPSA"); however, under the terms of the EPSA, such consent cannot be unreasonably withheld.
While the outside date under the CNPCI Agreement (August 24, 2009) has now passed, the CNPCI Agreement has not yet been terminated by either party to the agreement.
Despite Verenex having complied with all the requirements of the EPSA and the NOC throughout the public sale process, the NOC has continually failed or refused to provide consent to the proposed sale of Verenex. The GPC has made it clear to Verenex that it is seeking to negotiate a reduced purchase price. In accordance with the dispute mechanism under the EPSA, Verenex has finalized and is ready to file an arbitration claim should it become necessary to pursue this legal remedy. However, Verenex and Libyan authorities are presently fully engaged in discussions to reach an amicable solution to the current impasse on the sale of Verenex without Verenex having to pursue its legal remedies.
Verenex understands that the Government of Canada has again expressed its concerns to the Government of Libya respecting the actions, and lack of action, by the NOC and the GPC in connection with this matter.
Investors are cautioned that there can be no assurance that consent to the offer by CNPCI will be received from Libyan authorities, or that a sale transaction will be concluded on the terms contemplated or at all.
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