TSX.V: ADL
TORONTO,
July 1, 2013 /CNW/ - ADIRA ENERGY
LTD. (TSXV: ADL) (OTCBB: ADENF) (FRANKFURT: AORLB8). Adira Energy Ltd. is
pleased to announce that its wholly owned subsidiary, Adira Energy
Israel Ltd. (together with Adira Energy Ltd., "Adira"), has
entered into a settlement and release agreement (the
"Agreement") with Modi'in Energy LP ("Modi'in") and
Brownstone Energy Inc. ("Brownstone") (together with Adira,
the "Consortium"). The Agreement resolves the Consortium's
previously disclosed disputes over their respective funding
obligations and related suspension of operations on the Gabriella
License.
Pursuant to the Agreement, the Consortium
members agree to waive and release each other from any claims and
demands they may have with respect to the Gabriella License. The
Agreement further provides that the Consortium members will fund
their proportionate share of costs associated with the Gabriella
License incurred in connection with the attempted drilling of the
first well. Adira's net share of the costs total approximately
US$3.2 million and is payable in
stages over a 90 day period from the Effective Date (as defined
below).
Jeffrey E.
Walter, Chief Executive Officer of Adira
commented, "Adira and its partners in the Gabriella License have
faced many operational and financial challenges over the past half
year. Despite confirming contingent resources on the License and
having a drilling rig on site, the Consortium was unable to execute
the drill program. Appreciating the need for co-operation and
mutual agreement in order to maintain and extend the tenure of the
License, as well as to secure financing for the continued
operations on the License, the Consortium has worked diligently to
complete the co-operation agreements and submit the request for
License extension to the Ministry of Energy and Water. Adira has
the intention and aspiration to develop the Gabriella License and
is currently assessing finance options to maintain its interest in
the License."
The Agreement also provides the Consortium
members with tag-along rights for a period of one year from the
Effective Date (as defined below) to participate in any farm out of
their participating interests in the Gabriella License consummated
by the other members. In addition, Adira agrees to relinquish its
15% buy back option and management fee, and reduce its overriding
royalty interest to 2.625%.
In the event that Adira does not pay its share
of abovementioned costs, at Modi'in's request, Adira may withdraw
from the Joint Operating Agreement and assign its participating
interest in the Gabriella License to the remaining Consortium
members, and will relinquish its remaining royalties.
The Agreement is subject to Modi'in unitholder
approval, which is expected to be received within 10 days (the
"Effective Date").
The Agreement replaces the Letter Agreement,
dated December 20, 2012 and the
Memorandum of Understanding, dated June 12,
2012, signed by the Consortium members.
Gabriella and Yitzhak License Extension Request
Adira further announces that on June 30, 2013, it applied to the Ministry of
Energy and Water of the State of
Israel (the "Ministry") for an extension of the dates
for the execution of a drilling contract on the Gabriella License
to February 28, 2014, and for the
spud of the first well to December 31,
2014.
Adira also applied to the Ministry for an
extension of the dates for the execution of a drilling contract on
the Yitzhak License, offshore Israel, to September
30, 2014, and for the spud of the first well to June 30, 2015.
About Adira Energy Ltd.
Adira Energy Ltd. is an oil and gas company
which is focused in the Eastern Mediterranean. The Company has
three petroleum exploration licenses offshore Israel; the Gabriella, Yitzhak and Samuel
Licenses. These licenses are located respectively 10 km offshore
between Netanya and Ashdod, 17 km offshore between Hadera and
Netanya and adjacent to the coast between Ashkelon and Bat-Yam. The Company also has an
option on the Yam Hadera License, offshore Israel, which is located 30 kilometers
offshore Israel, between Hadera
and Haifa and North West of
Adira's Yitzhak license.
Forward-Looking Statement Disclaimer
This press release includes certain statements
that may be deemed "forward-looking statements". All statements in
this press release, other than statements of historical facts, are
forward-looking statements. Although the Company believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance, and actual results or developments may differ
materially from those in the forward-looking statements.
Forward-looking statements are based on the Company's internal
projections, estimated or beliefs, concerning, among other things
an outlook on the estimated amounts and timing of exploration work
and capital expenditures or other expectation, beliefs, plans,
objectives, assumption, intentions or statements about future
events or performance, which are considered by management to be
reasonable at the time made. Actual events or results may differ
materially. Although the Company believes that the expectations
reflected in the statements are reasonable, it cannot guarantee
future results since such results are inherently subject to
significant business, economic, corporate, political and social
uncertainties and contingencies. Many factors cause the Company's
actual results to differ materially from those expressed or implied
in any forward looking statements made by, or on behalf of, the
Company and the foregoing stated factors are not exhaustive. The
statements contained herein are made as of the date hereof and the
Company disclaims any intent or obligation to update publicly any
forward looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable law. Company shareholders and potential investors should
carefully consider the information contained in the Company's
filing with Canadian securities administrators at www.sedar.com
before making investment decisions with regard to the Company.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Adira Energy Ltd.