Vast Exploration has entered into an agreement with the Kurdistan Regional Government of Iraq to acquire an additional 10% net working interest in the Qara Dagh Production Sharing Contract (the "PSC"). As a result of the acquisition, Vast will hold an aggregate 37% net working interest in the PSC.
In consideration for the acquisition of the additional 10% net working interest, Vast has agreed to issue 60,000,000 common shares of the Company to a social fund established by the Government. The common shares shall satisfy all the obligations of Vast in relation to the capacity building payments in respect of the additional 10% net working interest.
Mr. Ahmed Said, the President and Chief Executive Officer of Vast, stated, "We are very pleased to welcome the Kurdistan Regional Government of Iraq as a significant shareholder in the Company. This acquisition also demonstrates our continuing belief in the exploration potential of the Qara Dagh Block following the completion of our initial 2-D seismic survey program. The investment community is beginning to appreciate the potential size of oil and gas resources located in the Kurdistan Region of Iraq, and we believe that this acquisition demonstrates the Government's confidence in Vast and the prospectivity of the Block."
The 10% additional net working interest to be acquired by Vast constituted one-half of the 20% net working interest that the Government could have assigned to a third party or parties under the PSC. Niko Resources Ltd. ("Niko"), Vast's partner in respect of the Qara Dagh block, has also acquired an additional 10% net working interest in the PSC. In connection with these acquisitions, Vast and Niko will be responsible to pay back to the consortium the proportionate share of petroleum costs previously incurred under the PSC in respect of these additional interests.
Vast intends to obtain shareholder approval and close this transaction within 60 days. Pursuant to applicable securities laws, the transaction will be subject to shareholder approval and certain regulatory approvals, including approval of the TSX Venture Exchange.
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