Maurel & Prom Sell Stake in M'Boundi Field in Congo

Burren has been notified by, Maurel & Prom, its partner and the operator of Burren's assets in Congo (Brazzaville), that Maurel & Prom has reached agreement in principle, subject to documentation, to sell an 11 percent interest in the M'Boundi Production Permit (in which Burren has a 35 percent interest) to Energy Africa Limited, leaving Maurel & Prom with a 54 percent interest.

Under the proposed terms of the transaction, which is not yet subject to a binding legal agreement, Energy Africa will pay to Maurel & Prom an initial cash sum of US$50 million plus a royalty of US$1.5 per barrel for Energy Africa's share of each barrel of oil produced from M'Boundi above a threshold of 14 million barrels (Energy Africa's share). Maurel & Prom and Energy Africa have estimated that the amount expected to be paid by way of royalty is US$24 million.

The proposed terms of the acquisition value Burren's 35 percent. interest in M'Boundi at approximately US$159 million, based only on the initial US$50 million consideration.

Under the joint operating agreement between Burren and Maurel & Prom regarding M'Boundi, Burren may exercise pre-emption rights to acquire the interest to be sold by Maurel & Prom on the same terms as those agreed with Energy Africa. Burren is currently in discussion with both Maurel & Prom and its own advisers to clarify certain aspects of the proposed transaction and is considering whether or not to exercise its pre-emption rights. A further announcement will be made in due course.