Pacific Asia Amends Purchase Agreement for Stake in Oyo Field
Pacific Asia Petroleum has entered into an amendment to the Sale and Purchase Agreement previously entered into with CAMAC Energy Holding Limited and certain of its affiliates on November 18, 2009 with respect to the pending acquisition by the Company of all of CAMAC’s interest in the Oyo Oilfield, located offshore of Nigeria, which commenced production in December 2009.
Under the amended Sale and Purchase Agreement, the Company has agreed to pay CAMAC $32 million in cash at closing, instead of $38.84 million as originally agreed. The balance of $6.84 million will be due and payable post-closing on the earlier of sufficient receipt of oil proceeds from the Oyo Oilfield or 6 months after the closing. The amendment also addresses the allocation of revenues and expenses related to production from the Oyo Oilfield prior to the closing of the transaction.
In addition, the parties agreed to schedule the closing to occur on or before April 7, 2010, and removed the condition that Pacific Asia Petroleum raise a minimum of $45 million in equity financing before the closing of the transaction. Following the closings of the Company's recent registered direct offerings raising $37.5 million, the Company currently has sufficient cash to consummate the closing of the CAMAC transaction.
Commenting on the progress of the CAMAC transaction, President and CEO, Frank Ingriselli noted, "The rapid progress in this acquisition process has demonstrated the strength and commitment of Pacific Asia Petroleum and all the parties involved in this major transaction, and is a testament to the trust the investor community and our existing shareholders have put in our management and the Company's new business direction. We intend to issue our proxy statement for approval of the acquisition of CAMAC’s Oyo Oilfield interest as soon as possible and, with the required shareholder approval, close this acquisition on April 7th and start to realize the benefits of moving from a development stage company to a profitable energy company."