Geopark Enters 10-Yr Sale and Purchase Gas Agreement
Geopark Holdings Limited has entered into a new 10 year sale and purchase agreement with the Methanex Corporation of Canada ("Methanex") for its Chilean gas production which provides a secure long term market for the Company's Fell Block gas reserves and an increase in the gas sales price. This agreement underpins the long term economic development of the Company's Fell Block project. During December 2007, GEOPARK's gas sales price, which is dependent on the world price of methanol, exceeded US$5.00 per thousand cubic feet (mcf), which represents more than a doubling of the gas price in January 2007 under the previous contract.
New US$40 MM Funding: The Company also entered into an agreement with Methanex during the Q4 2007 which provides for a US$40 million financing of GEOPARK's development and investment activities on the Fell Block. The financing is structured as a gas pre-sale agreement with a six year pay-back period at an interest rate of LIBOR flat. As of December 31, 2007, approximately US$13 million of this fund had been drawn down by GEOPARK.
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