Global Energy Development PLC Farm-out Agreement for Bolivar Contract Area (8712B)
March 10 2014 - 3:00AM
UK Regulatory
TIDMGED
RNS Number : 8712B
Global Energy Development PLC
10 March 2014
Immediate Release 10 March 2014
GLOBAL ENERGY DEVELOPMENT PLC
(the "Company" or "Global")
Farm-out Agreement signed for Bolivar Association Contract
Area
Highlights
- Farm-out agreement entered into with Everest Hill Energy Group
Ltd. ("Everest") establishing a 50 per cent. working interest in
Global's interest in the Bolivar association contract
- Cash payment to the Company of $5m due upon signing of this agreement
- Fully carried interest on three wells, comprising re-entry and
fracking of two existing wells and completion of one new
exploitation well
- The first of the two re-entry wells is expected to be spudded within the next 6 weeks
Global Energy Development PLC, the Latin America focused
petroleum exploration, development and production company (AIM:
GED) with operations in Colombia, is pleased to announce that it
has signed a farm-out agreement (the "Agreement") with respect to
its Bolivar association contract area (the "Contract Area"), in the
Middle Magdalena Basin, with Everest.
The Agreement marks the successful conclusion of a previously
announced extensive marketing process conducted by Jefferies
International over the last 12 months in connection with the
Bolivar association contract.
Under the terms of the Agreement, Everest will acquire a 50 per
cent. interest in the Contract Area, including any and all rights,
obligations and duties in respect of the Contract Area in exchange
for payment of the work commitments stipulated in the Agreement and
the cash payment of $5 million. The Agreement is subject to certain
conditions, including Ecopetrol approval. Under the Agreement,
Everest commits to undertake the funding of a work program with
respect to the Contract Area (the "Work Program"), including an
obligation to pay all future costs and expenses incurred with
respect to the proposed operations:
(1) within one year of completion of the agreement, to re-enter
and hydraulically fracture potential formations in two existing
wells within the Contract Area; and
(2) within two years of completion, to drill and complete one
new exploitation well in the Contract Area.
The Work Program shall be governed by a joint-venture agreement
to be agreed between Global and Everest.
Everest is an affiliated company of the Quasha family trusts
which also have an interest in Lyford Investments, Inc., an
existing shareholder in Global. HKN, Inc. ("HKN"), Global's
principal shareholder, Lyford Investments, Inc and parties acting
in concert with it are interested in 21,849,016 Global shares,
representing approximately 60.50 per cent. of the issued share
capital of the Company. By virtue of these holdings, entry into the
Agreement constitutes a related party transaction under the AIM
Rules. With the exception of Mr. Mikel Faulkner, who is a director
of HKN, the Company's Directors consider, having consulted with
Northland Capital Partners Limited, the Company's Nominated
Adviser, that the terms of the Agreement are fair and reasonable
insofar as the Company's shareholders are concerned.
Stephen C. Voss, Managing Director of Global, commented
"The Company is very keen to re-commence its activities in the
Middle Magdalena Basin. This agreement not only provides us with
the funding for a three well progamme but it also allows us to
share the risks as we jointly develop the Company's largest asset
base."
For further information please contact:
Global Energy Development PLC
Anna Williams, Finance Director
awilliams@globalenergyplc.com +001 817 310
www.globalenergyplc.com 0240
Northland Capital Partners Limited
Louis Castro +44 (0)20 7382
Lauren Kettle 1100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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