Avenue Energy to Acquire Anzoil Thailand
I.T. Technology, Inc. subsidiary, Avenue Energy, Inc., has entered into a Stock Purchase Agreement with a company controlled by Dr. Jaap Poll to acquire up to 36% of the outstanding capital stock of Anzoil (Thailand) Pty Ltd, a company which has a contract to acquire 100% of the offshore petroleum concession Block B7/38 located in the Gulf of Thailand and US $1.8 million in cash. This agreement reflects the Company's recent decision to broaden its strategic focus and pursue a range of potential growth and investment strategies.
Upon the initial closing of the transaction, the Company will issue to Dr. Poll's company 14,444,444 shares of its restricted Common Stock for 26% of Anzoil Thailand's outstanding shares and upon satisfaction of certain additional conditions, up to a further 5,555,556 Shares for up to an additional 10% of Anzoil Thailand's outstanding shares.
Thailand Block B7/38 has three drillable prospects identified by 3D seismic coverage as well as a host of follow up structural and stratigraphic leads in a basin with proven oil potential. The Company believes that these prospects have substantial oil potential as a result of the Shell Nang Nuang oil discoveries immediately adjacent to Anzoil Thailand's drilling targets. Approximately US $4 million has already been spent on pre drilling exploration within the Concession.
Anzoil Thailand believes that the cumulative potential recoverable reserves in the currently identified prospects and leads may be as high as 600 million barrels of oil. Anzoil Thailand has indicated that it currently anticipates that drilling will start in early 2003.
The closing of the transactions contemplated by the Anzoil Thailand stock purchase agreement is subject to final Thai Government ratification, completion by Anzoil Thailand of contracts with the holder of the Concession and the consent of Anzoil Thailand's other shareholders, which the Company understands are anticipated to be achieved by the end of the year. Upon acquiring the Concession, the participants will be required to contribute their proportional share of the costs of the expenditure obligations of approximately US$4.3 million (less the balance of the funds allocated to Anzoil Thailand specifically for this program - estimated to be US$1.8 million).