Gold Oil Set to Acquire Stake in Minmet
Gold Oil Plc's wholly owned subsidiary, Gold Oil Caribbean Ltd (Gold Caribbean) has reached an agreement in principle with Minmet (Isle of Man) Limited, which is a wholly owned subsidiary of the Irish resource company Minmet Plc.
Gold has identified several interesting oil and gas exploration and production opportunities in countries outside of Gold's core areas of Peru and Colombia. Gold has been looking at different ways of realizing value from these opportunities. In some of the non-core areas Irish companies have a good track record of closing deals compared to British ones and as an Irish registered company with its own financial resources and management, Minmet Plc should be in a unique position to exploit these opportunities. These areas, as well as opportunities outside of Central and South America that are presented to Gold, will be pursued by Minmet.
The agreement will enhance Gold's ability to acquire further non-core interests in the region and provide the finance to rapidly exploit those interests.
Under the agreement Gold will acquire 24.67 percent of Minmet through a share placing and a share exchange. Gold has also entered into a technical services agreement with Minmet to provide oil & gas technical expertise and has agreed to appoint two directors to the Minmet board.
Under the agreement:
- Minmet will purchase from Gold Caribbean proprietary data for oil and gas opportunities in several non-core Central and South American countries for £1. 35 million that Gold will use to subscribe for 10 million new ordinary shares of €0.01 each in Minmet at a price of Stg13.5p per share.
- Gold has agreed to subscribe for a total of 12.75 million new ordinary shares of €0.01 each in Minmet issued at Stg13.5p per share in exchange for a subscription by Minmet in Gold for 22.95 million new ordinary shares at a price of Stg7.5p per share.
- Minmet will appoint two Gold Oil directors, Mike Burchell and Gary Moore, as non-executive directors of Minmet.
- Gold will perform certain technical management functions for Minmet and Minmet will perform certain administrative and corporate functions for Gold through service contracts.
Following these transactions Gold will hold a 24.67 percentage interest of the enlarged issued share capital of Minmet and Minmet will hold a 4.99 percentage of the enlarged issued share capital of Gold. Minmet and Gold have agreed to a mutual lock in of one year.
Gary Moore, Gold's Chief Executive, commented: "We have been looking for a
suitable partner to develop these non-core opportunities for some time.
Generally we would look to acquire exploration acreage and then, after a period
of negotiation and evaluation, seek a partner who will take a significant
portion of the risk and cost. It may not always be possible to get the partner
of choice as a result of unique regional issues. Minmet is an Irish company with
a significant portfolio of residual investments and increasing cash balances.
The combination with Gold provides the opportunity to capitalize on a number of
opportunities. With this tie-up with Minmet we now have a partner with cash and
in which Gold has a significant involvement and we can avoid the dilution of a
farm-out to another company."
- Gold Oil In Talks for Partner Offshore Peru (May 08)
- Gold Oil Granted License Extension in Peru (Jan 30)
- Gold Oil Extends Survey, Seeks Farm-In Candidates Offshore Peru (Jul 11)
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