PetroHunter Sells Falcon O&G 25% Stake in Beetaloo Basin Project
PetroHunter Energy has entered into a binding agreement with Falcon Oil & Gas Ltd. ("Falcon"), a non-arm's length party, under which PetroHunter will sell and assign to Falcon an undivided 25% working interest in PetroHunter's four exploration permits covering seven million acres in the Beetaloo Basin of the Northern Territory, Australia. As PetroHunter had sold a 50% working interest in this prospect to Falcon in September 2008, this will increase Falcon's working interest to 75%. Falcon's Australian subsidiary will become the operator of the Beetaloo Basin project.
Under the terms of the agreement, Falcon will agree to relieve PetroHunter from the $5 million loan made in October 2008 and release the collateral securing that loan, assume current PetroHunter payables with respect to the Beetaloo Basin project in an amount not to exceed AUD$1.5 million (approximately US $1.18 million), and reassign Falcon's 25% working interest in five wells (including the 40-acre tract surrounding each well) located in PetroHunter's Buckskin Mesa project in the Piceance Basin in Rio Blanco County, Colorado, back to PetroHunter. Falcon had acquired the 25% working interest in the five Buckskin Mesa wells in November 2008. In addition, Falcon is assigning its rights to approximately $855,000 of completion capital remaining from the Buckskin Mesa project to PetroHunter.
In addition to transferring the additional 25% working interest, PetroHunter will assign to Falcon its Beetaloo project inventory and its operator cash bonds, and indemnify Falcon against claims and liabilities relating to plugging, abandonment and site reclamation costs for the five Buckskin Mesa wells.
This transaction will provide PetroHunter with access to 26.1 million shares of Falcon stock that had been unavailable for sale. At the closing of this transaction, PetroHunter will place these shares in an escrow account which will provide for scheduled releases of the shares.
The closing of this transaction is subject to the fulfillment of certain closing conditions, as well as the receipt of all required regulatory approvals. Closing of the transaction is expected to occur on or before June 10, 2009.
Shareholder Relationship and Director Relationship
Marc A. Bruner, the Chairman, CEO and President of Falcon, continues to be a significant shareholder of PetroHunter. The negotiation and entering into of the non-binding letter of intent and the definitive agreements continue to be governed by a committee of the independent directors of Falcon.
Carmen J. Lotito, a director of PetroHunter, is a director of Falcon Oil & Gas Australia Pty Ltd., Falcon's subsidiary that owns the existing 50% working interest. PetroHunter has advised Falcon that Mr. Lotito abstained from voting when the PetroHunter Board of Directors voted to approve the agreement.
- Falcon Updates on Drilling Ops at Amungee NW-1H Well in Beetaloo Basin (Sep 30)
- Falcon O&G Provides Update on Drilling Ops in Beetaloo Basin in Australia (Jul 26)
- Falcon Outlines Drilling Plans for its Australia's Beetaloo Basin Assets (Apr 29)
Company: PetroHunter Energy Corp. more info
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