Receipt of Force Majeure Notification

RNS Number : 9150O

Argos Resources Ltd

12 February 2016

 

12 February 2016

ARGOS RESOURCES LIMITED

("Argos" or "the Company")

RECEIPT OF FORCE MAJEURE NOTIFICATION

Argos Resources Limited (AIM: ARG.L), the Falkland Islands based company with an interest in the North Falkland Basin announces that it has today received notification from Noble Energy (Noble), the Operator of Licence PL001, in which Argos holds a 5% Overriding Royalty Interest, that it is exercising its rights under the terms of a Farmout Agreement between Noble and Argos to declare Force Majeure.

Noble had been planning to drill an exploration well on Licence PL001 which was due to commence shortly using the Eirik Raude drilling rig, which is currently operating in the North Falkland Basin. Due to operational issues with the rig, Noble has cancelled the Rig Contract, leading, in turn, to the notification to Argos of Force Majeure.

Noble intends to apply to the Falkland Islands Government for an extension to the current phase of the Licence. The licence requires the drilling of a commitment well to move to the next phase.

In addition to the continuation of the Overriding Royalty Interest in the Licence, Noble have confirmed that future cash payments to Argos will be made which will be sufficient to meet the ongoing running costs of the Company.

A new Participation Agreement between the parties to reflect the various changes created as a consequence of Force Majeure will replace the Farmout Agreement.

Ian Thomson, Chairman of Argos, commented:

"We are, of course, very disappointed to have been so close to drilling commencing on our Licence, only to suffer this delay. We respect Noble's judgement in this matter and we are working closely with them. Our Overriding Royalty Interest in the Licence will continue into any extension period agreed and our future running costs are covered, so we remain well positioned. Both Noble and the Company continue to be very positive about the exploration potential of the Licence Area".

For further information:

Argos Resources Limited

([phone])

www.argosresources.com

Ian Thomson, Chairman

John Hogan, Managing Director

Cenkos Securities plc (Nomad & Broker)

Derrick Lee ([phone])

Neil McDonald ([phone])

Citigate Dewe Rogerson (Communications Adviser)

([phone])

Martin Jackson

Shabnam Bashir

 

END

 

 

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