Canadian Imperial Venture Disposes of Garden Hill South Interests
Canadian Imperial Venture Corp. (CIVC) has entered into an agreement (the "Agreement") with PDI Production Inc. and Gestion Resources Limited (collectively referred to as "PDIP") and Shoal Point Energy Ltd. ("Shoal Point") for the disposition of CIVC's interests in Garden Hill North and Garden Hill South. The consideration for the disposition is a $4,700,000 payment from PDIP. In addition, CIVC has granted to PDIP a non-exclusive perpetual license in relation to its intellectual property in consideration of an annual fee of $25,000 as well as an additional $300,000 as an upfront license fee.
The first closing under the Agreement took place today and CIVC received $4,000,000 and out of this amount $1,000,000 has been paid to CIVC Creditor Corp. under the terms of its agreement with CIVC. CIVC has a right to recover this payment to Creditor Corp. through a royalty on production from Garden Hill. A second closing for the balance of the purchase price is to take place on or before March 31, 2008.
CIVC also obtained an extension from Creditor Corp. to March 31, 2008 of a $500,000 payment that had been due on December 31, 2007. This payment, as well as an additional payment of $500,000 due to Creditor Corp. within 30 days following commencement of the first oilfield operation within EL 1070, will be made by CIVC and PDIP under the terms of the Agreement in accordance with their respective interests (60% by PDIP and 40% by CIVC).
As part of the Agreement PDIP paid $2,000,000 to Shoal Point in consideration of Shoal Point agreeing to terminate its prior farmout and option arrangements relating to Garden Hill North and South. CIVC has been advised by Shoal Point that it will take all necessary steps to continue with its plan to spud its proposed well at Shoal Point 2K39 by the new deadline of March 17, 2008.
CIVC maintains its Newfoundland and Labrador interests in Exploration Licence 1070 which includes the Shoal Point and Lourdes Prospects.
"As a result of this transaction, CIVC continues along its strategic direction of balancing the efforts of the Company between the high impact Western Newfoundland play and its lower risk efforts in Alberta," said Steve Millan, CEO of CIVC.
- Shoal Point to Acquire CIVC's Interests in West Newfoundland (Sep 26)
- Canadian Imperial Venture Reaches TD at Shoal Well (Apr 04)
- Drilling at Shoal Point to Commence Late September (Aug 12)