Premier to Acquire Rossgaz's Shares in Speckrit LLC

Premier has signed a Securities Purchase Agreement with Rossgaz LLC, a limited liability company incorporated in the Russian Federation, to acquire all of the issued and outstanding securities of Speckrit LLC owned by Rossgaz.

Speckrit LLC, a limited liability company incorporated in the Russian Federation, holds a 20-year exploration and exploitation license granted in 2005 for the South-Chernushinskoye field in the Perm Region. Speckrit owns all existing oil production and processing facilities at the field and has export rights to oil refineries at foreign destinations. Speckrit's majority-owned subsidiary Alba Oil LLC, also incorporated in the Russian Federation, holds a 25-year exploration and exploitation license granted in 2003 for the North-Sorokinskoye field in the Tyumen Region.

Premier Energy Corporation's strategy is to widen its presence and increase oil, gas and condensate production in Russia. The Company currently owns majority interest of Karbon CJSC, a closed join stock company incorporated in the Russian Federation. Karbon holds exploration and production license for the North-Kopanskoye field in the Orenburg Region in the Volga-Urals Basin.

Premier Energy Corporation is responsible for raising all capital for the cash consideration of $65 million to be used to acquire the securities and retire outstanding debt. Upon acquisition, the Company would need to secure additional $45 million for further evaluation and development of the acquired oilfields. There is no guarantee that the above financings will be available at all or, if available, that the terms will be acceptable. As such, there is no guarantee that Premier will be able to successfully close the above transaction or, if it does close, that it will be able to adequately capitalize its operations.

 

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