Independent Resources has acquired Nostra Terra Oil and Gas Company plc
Independent Resources, an oil and gas exploration and production company with a growing portfolio of producing and exploration prospects in North Africa is pleased to announce the completion of the acquisition by its newly-formed joint venture with Nostra Terra Oil and Gas Company plc of a 50 per cent. interest in the East Ghazalat concession in Egypt from TransGlobe Petroleum International Inc, a wholly owned subsidiary of TransGlobe Energy Corporation for US$3.5 million.
The Acquisition was originally announced on 6 October 2015
- Current gross production from East Ghazalat is approximately 880 barrels of oil per day (bopd), based on average June 2015 production levels (440 bopd net to JVCO).
- Gross Company 2P reserves attributable to the 50 per cent interest acquired ("Acquired Interest") at the effective date of 30 June 2015 were estimated at 1,008,922 barrels of oil (DeGolyer and MacNaughton Canada Limited estimate).
- Implied acquisition cost of US$3.47 per barrel of 2P oil reserves and US$7,955 per barrel of daily oil production attributable to the Acquired Interest.
- The concession also includes two gas discoveries mentioned by TransGlobe on 28 August 2013 and 3 September 2014 in North Dabaa 1X and North Dabaa 2X respectively. North Dabaa 1X tested at an average rate of 16 million cubic feet per day (MMCFD) and 1,620 barrels per day of condensate. North Dabaa 2X tested at 18.7 MMCFD and 542 barrels per day of condensate. No reserves have been attributed for these discoveries.
- Operated by North Petroleum, a wholly-owned subsidiary of China ZhenHua Oil Co, Ltd, a Chinese state-owned oil company.
- New drilling locations identified for additional wells.
- The Vendor has agreed to issue a loan note for US$2.5 million and the remaining cash element due has been funded from cash and an existing third party loan facility arranged by Nostra Terra. No shares have been issued by either Nostra Terra or Independent Resources in conjunction with the Acquisition. The loan note bears interest at 10 per. cent per annum payable on a semi-annual basis and must be redeemed by JVCO by 30 September 2017.
The effective date of the closing is 1 July 2015. The immediate priorities of JVCO are to improve operating margins through cost reduction initiatives and to implement further reserve enhancement opportunities in a disciplined and rigorous manner.
In conjunction with Nostra Terra, we continue through the JVCO to appraise a number of other acquisition opportunities in the region. We look forward to updating shareholders on further progress.
Greg Coleman, CEO of Independent Resources, commented:
"I am very pleased that we have completed our first targeted Egyptian acquisition in partnership with Nostra Terra. It is very clear that this partnership has an exciting future together as there are many opportunities which we believe we can now consider. In the short term, we are now focused on working with EGPC and the operator to add significant value to the asset.
We were able to obtain financing from the Vendor on attractive terms and consequently minimise dilution to existing shareholders."