Mediterranean Oil & Gas PLC (MOG.LN) said Thursday it has agreed to
sell a large chunk of its onshore
Italy
gas
production assets and exploration permits to Canoel International Energy Ltd. (CIL.V).
MAIN FACTS:
-MOG said it is divesting 13 gas production concessions and exploration permits
that are no longer considered to be strategic for the growth of the company's
future gas production.
-Under the terms of the Sale and Purchase Agreement, on completion:
-Canoel will pay to MOG the sum of EUR100 as consideration for the acquisition
of the company's working interests held in the Assets;
-Canoel agrees to assume the liability for all future plug, abandonment and
site remediation costs associated with the Assets;
-MOG will pay EUR1,250,000 to CIL as a partial contribution towards the future
plug, abandonment and site remediation costs for the Assets;
-MOG will credit Canoel the revenue MOG received from the assets during the
period between the Effective Date of Aug. 24, and the Completion Date, net of
allowable operating costs and agreed capital expenditure associated with the
assets and incurred by MOG during the Interim Period.
-Completion of the Transaction is conditional upon MOG receiving the approval
of the Italian Ministry for Economic Development for the transfer of the Assets
to Canoel, and Canoel receiving the approval of the Toronto Stock Exchange.
-Divested assets include the following operated onshore gas production
concessions: Masseria Grottavecchia (WI 20%), San Teodoro (WI 100%), Torrente
Cigno (WI 45%), Misano Adriatico (WI 100%), Sant'Andrea (WI 40%), Masseria
Petrilli (WI 50%).
-Divested assets include the following non-operated onshore gas production
concessions: Masseria Acquasalsa (WI 8.8%), Lucera (WI 13.6%), San Mauro (WI
18%).
-Divested assets include the following operated gas exploration permit:
Montalbano (WI 57.15%)
-Divested assets include the following exploration permit applications: Serra
dei Gatti (WI 100%), Villa Carbone (WI 50%), Colle dei Nidi (WI 25%).
-The 2P (proved and probable) gas reserves, which are to be divested as part of
the Transaction, amount to 1.4 billion cubic feet, or Bcf, representing 7.5% of
MOG's total 2P gas reserves of 18.4 Bcf.
-The corresponding gas production that is to be divested is currently 13,800
cubic meters a day, representing approximately 6% of MOG's revenue.
-Shares
closed Wednesday at 11.6 pence.