LGO Notes Byron's Acreage Expansion in Gulf of Mexico
Leni Gas & Oil has been advised by Byron Energy Pty Ltd ("Byron") that Byron has been confirmed as the highest bidder on four leases in the Central Gulf of Mexico ("GOM") Minerals Management Services ("MMS") Lease Sale 210.
The MMS has confirmed that Byron was the highest bidder on West Cameron Area, South Addition blocks 469, 472, 473 and 475. Final award of these leases is subject to a geological review by the MMS to confirm adequacy of the bid values. This review is expected to be completed within approximately four months. Byron expects to receive approval of its bids within this time-frame. If and when Byron receives approval Byron will have a 100% working interest in these leases.
The new leases announced are in addition to the award earlier this year under Lease Sale 208 which included West Cameron Area, South Addition blocks 489, 490, 491 and West Delta Area block 49.
LGO retains a 28.94% shareholding in Byron and announced on April 8, 2008 the completion of a Heads of Agreement with Byron to transfer the shareholding from an indirect to a direct ownership of its GOM oil and gas assets. This transfer remains subject to Byron Energy shareholder approval, LGO qualifying under Mineral Management Service requirements to acquire the working interests in the Eugene Island assets and compliance to AIM rules.
Upon completion of the proposed indirect to direct conversion transaction with Byron, LGO will have the right to acquire up to 20% of Byron's interest in all of the announced leases.
David Lenigas, Executive Chairman, commented, "The lease announcement in the Gulf of Mexico is tremendous news by considerably expanding our acreage position and thus future reserves and production from the area. Together with our existing interests in the Leed Petroleum acreage, the new acreage exclusively with Byron presents another step change for increasing the value of our Gulf of Mexico acreage."
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