DECC to Consider Velo's License Transfers in UK North Sea
Velo Energy has received clarification from the UK Department of Energy and Climate Change that DECC will consider transfers of non-operated license interests in the UK North Sea to Velo. This is a substantial change from the January 5, 2010 letter from DECC in which DECC refused consent to any license transfers. Velo has been approached by a number of recognized UK operators with respect to farm-in and joint venture opportunities and is engaged in discussions with these operators.
Velo has also received a notice of termination of the CSC Agreement under which Velo's wholly owned subsidiary had agreed to purchase interests in the Caledonia, Sheryl and Catcher areas in the UK North Sea. The CSC Agreement had been conditional upon Velo completing its financing on or before January 31, 2010 and other conditions, including DECC consent to the transfers of interests. The Vendor also formally advised Velo that it is prepared to enter into another agreement under which Velo's subsidiary may acquire the interests in the Caledonia and Sheryl (but not Catcher) areas on the same terms. Velo is considering its position on the matter, particularly in light of the recent communication with DECC referenced above.
In light of the re-structured business plan of Velo, William H. Smith (Executive VP and General Counsel) has tendered his resignation. Mr. Smith will continue as non-executive Corporate Secretary.
Velo anticipates that its previously filed prospectus will be amended, re-filed or abandoned to accord with its new business plan.