Nostra Terra Oil & Gas Company PLC Settlement of Loan Note (0107L)
September 28 2016 - 2:01AM
UK Regulatory
TIDMNTOG
RNS Number : 0107L
Nostra Terra Oil & Gas Company PLC
28 September 2016
28 September 2016
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Settlement of Loan Note
Nostra Terra (AIM:NTOG) is pleased to announce that its Joint
Venture with Independent Resources plc (AIM:IRG), Independent
Resources (Egypt) Ltd ("IRE"), has reached an agreement
("Agreement") with TransGlobe Petroleum International Inc.
("TransGlobe") concerning the early repayment of the US$2.5 million
loan note ("Loan Note") issued to TransGlobe in October 2015 and
repayable on 30 September 2017. Under the terms of the Agreement,
IRE will pay US$200,000 to TransGlobe in full and final settlement
of the Loan Note.
IRE's 50% interest in the East Ghazalat concession (the
"Concession") is not affected by this Agreement. Nostra Terra will
pay US$100,000 for its proportional share of the Agreement. This
extinguishes the liability of approximately US$1.3 million owed by
Nostra Terra (including accrued interest), leaving no further debt
on the asset.
Background
As previously announced, IRE is Nostra Terra's co-owned Joint
Venture with Independent Resources. IRE owns a 100% interest in
Sahara Resources (GOS) Inc, which owns a 50% non-operating interest
in the Concession, located in the Western Desert region of Egypt
approximately 240 kilometres southwest of Cairo. The Concession is
operated by North Petroleum, a subsidiary of the Chinese
state-owned ZhenHua Oil Co. Ltd. IRE acquired its stake in the
Concession from TransGlobe on 15 October 2015 for a headline
consideration of US$3.5 million, satisfied by the payment of US$1
million in cash and the issue of the $2.5 million loan note to
TransGlobe. The implied acquisition cost has now been improved to
US$1.19 per barrel (previously US$3.47 per barrel) of 2P oil
reserves attributable to the acquired interest.
Gross 2P reserves attributable to IRE's interest in the
Concession were estimated at 1,008,922 barrels of oil on 30 June
2015 (DeGolyer and MacNaughton Canada Limited estimate). In
addition there are two natural gas discoveries on the
Concession.
Early Settlement of the Loan Note
After recent negotiations, TransGlobe has agreed to accept the
US$200,000 payment from IRE as full and final settlement of the
Loan Note with no further adjustments of the type set out in the
Company's announcement of 6 October 2015. IRE has agreed to release
TransGlobe from any potential warranty and indemnity claims, which
it may have had under the original sale and purchase agreement, and
indemnifies TransGlobe in respect of any claims, which may arise
from TransGlobe's prior ownership of East Ghazalat.
In return TransGlobe has agreed to forgo the outstanding $2.3
million balance on the Loan Note and any claims for accrued
interest since completion of the acquisition in October 2015.
The Agreement represents final completion of IRE's acquisition
of its 50% stake in the Concession.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"We are pleased to have reached agreement on the outstanding
loan note. It now allows IRE to focus our energies on improving
operations in East Ghazalat."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company
plc
Matt Lofgran, CEO +1 480 993 8933
Strand Hanson Limited
(Nominated & Financial Adviser +44 (0) 20 7409
and Joint Broker) 3494
Rory Murphy / Ritchie Balmer
Vicarage Capital Limited (Joint +44 (0) 20 3651
Broker) 2910
Rupert Williams / Jeremy Woodgate
Cornhill Capital Ltd (Joint +44 (0) 20 7710
Broker) 9610
Nick Bealer / Colin Rowbury
This information is provided by RNS
The company news service from the London Stock Exchange
END
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