Serinus Energy Forms Strategic Ties with Dutco Energy
Serinus Energy Inc., an international upstream oil and gas exploration and production company, announced the formalization of a strategic relationship with Dutco Energy Ltd, a division of the Dutco Group, a leading conglomerate in the Middle East. Serinus and Dutco Energy have entered into an option agreement (the Option Agreement) which gives Dutco Energy the right to acquire an interest in Brunei Block L in consideration for Dutco Energy providing the Company with a $15 million secured credit facility (the Credit Agreement). As part of the transaction both companies have agreed to jointly pursue new oil and gas opportunities in Tunisia for the duration of the Credit Agreement.
The Option Agreement grants Dutco Energy the right to acquire an interest, ranging from a minimum of 5 percent and a maximum of 15 percent, in Brunei Block L. The right may be exercised in consideration for $1 million per percentage point of interest acquired by Dutco Energy. A decision to exercise the right to acquire an interest in Brunei Block L is to be made within 31 days of the test results of a discovery well being announced. Dutco Energy’s rights to acquire an interest in Block L are subject to the approval of PetroleumBRUNEI as regulator of Block L and to the preemptive
rights of the existing partners in Block L.
The term of the Credit Agreement is for 12 months with interest calculated on amounts outstanding at a rate of 12 percent per annum. Dutco Energy may convert amounts under the Credit Agreement into common shares of the Company with the conversion rights and the issuance of common shares to Dutco Energy pursuant to any conversion being subject to the prior approval of the Toronto Stock Exchange.
Tim Elliott, the president and CEO of Serinus stated that “we are very pleased to be working with Dutco Energy and the Dutco group of companies in what both parties hope will be the first step towards building a strategic partnership to jointly pursue oil and gas opportunities”.
Ahmad Sharaf, CEO of Dutco Energy added, “This exciting partnership with Serinus is a further demonstration of our commitment to exploring in proven basins, such as those in Southeast Asia, and capitalizing on them to the benefit of the host governments and partners alike. Furthermore, this investment is an important building block to Dutco Group’s long standing presence and experience in the Southeast Asian oilfield services and engineering sectors.”
Dutco Energy is a wholly-owned subsidiary of Dubai Transport Company LLC, a private company based in Dubai. The Dutco group of companies is a diverse organization with operations in construction and engineering, trading and manufacturing, hospitality, and oil and gas. Dutco Energy and the Dutco group of companies are at arm’s length to Serinus.
Block L is a 434 square mile (1,123 square kilometer) exploration and development block covering certain onshore and offshore areas of Brunei. The Lukut Updip 1 well, the first of two wells to be drilled in the 2013 drilling program, commenced drilling in the third week of June 2013 and is currently setting intermediate casing at a depth of 5,217 feet (1,590 meters). The casing shoe will be drilled out in the next few days prior to drilling ahead into the prospective part of the well.
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