MOLECULAR ENERGIES PLC 6 October 2015
('President' or 'the Company')
President announces that it has entered into a sale and purchase agreement ('SPA') through its wholly owned subsidiary President Energy Paraguay S.A. ('Prepasa'), to acquire the entire 36% interest held by Pirity Hidrocarburos S.R.L. ('Pirity Hidrocarburos') a subsidiary of Petro-Victory Energy Corp ('Petro-Victory'), in the Pirity Concession ('Pirity') ('the Acquisition'). Upon completion of the Acquisition, President will operate and own 100% of the Pirity Concession.
'This acquisition, with an upfront cost of US$500,000 payable by instalments with further monies payable dependent on success, will allow President the freedom, flexibility and scope to exclusively progress Pirity, and represents a mutually beneficial way forward for all parties.
'President's focus in-country remains on completing the analysis of the results of the recently acquired seismic data on its Hernandarias Block, an announcement in respect of which will be made shortly, at which point the Company will actively progress our strategy in Paraguay enhanced by our 100% ownership of Pirity.'
The Pirity Concession
President currently owns 64% of Pirity on which two exploration wells principally targeting Paleozoic formations were drilled in 2014. As the Company announced in 2014, the Jacaranda and Lapacho wells both identified potentially significant hydrocarbon accumulations. The two wells are currently suspended pending possible re-entry and flow testing. It is those same formations which were the target of the recently completed seismic campaign in the Hernandarias Block.
A third drill ready location exists in Pirity at the Tapir Cretaceous prospect, forming part of the Jurumi complex of five large dip enclosures across the border from the producing Cretaceous Palmar Largo fields in Argentina. The complex has independently assessed aggregate gross mean unrisked Prospective Resources of 453 MMBbl which were defined by high quality 3D seismic acquired by President in 2013.
Terms of AcquisitionOn completion of the Acquisition, President will operate and own 100% of the Pirity Concession. The principal terms of the Acquisition are;
US$500,000 in cash payable to the seller by one US$200,000 payment on completion and three subsequent consecutive monthly instalments of US$100,000 each;
In the event of a farm-out taking place in relation to Pirity and back costs being paid ( but not further or otherwise), a sum limited to the first US$2.7m of back costs received by President to be paid to the seller;
A Net Profits Interest of 3% of net revenues after deducting inter alia royalties and operational expenditure generated from successful commercial production of hydrocarbons in the Pirity Concession to be paid to the seller;
All actual or contingent claims, debt, and obligations between the parties which have previously been accrued or agreed are released and waived.
The completion of the Acquisition is subject to consent of the TSX Venture Exchange on which Petro-Victory's shares are listed; such consent expected to be forthcoming in the next 10 working days.
Glossary of terms
MMBbl means million of barrels of oil
Miles Biggins, Bsc Joint Honours University College London, with 25 years of experience in the oil and gas sector, is a Petroleum Engineer and member of the Society of Petroleum Engineers who meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.
Contact:
President Energy PLC | |
Peter Levine, Chairman | +44 (0) 207 016 7950 |
Miles Biggins, COO | +44 (0) 207 016 7950 |
Ben Wilkinson, Finance Director | +44 (0) 207 016 7950 |
RBC Capital Markets | |
Jeremy Low, Matthew Coakes, Daniel Conti | +44 (0) 207 653 4000 |
Peel Hunt LLP | |
Richard Crichton, Ross Allister | +44 (0) 207 418 8900 |
Bell Pottinger | |
Gavin Davis, Henry Lerwill | +44 (0) 203 772 2500 |
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