Information  X 
Enter a valid email address

Global Energy Dev. (NAUT)

  Print      Mail a friend       Annual reports

Tuesday 14 October, 2014

Global Energy Dev.

Llanos Basin Properties - Proposed Sale

RNS Number : 1840U
Global Energy Development PLC
14 October 2014
 

Immediate Release                                                                                            14 October 2014

  

GLOBAL ENERGY DEVELOPMENT PLC

(the "Company" or "Global")

 

LLANOS BASIN PROPERTIES - PROPOSED SALE

 

Global Energy Development PLC, the Latin America focused petroleum exploration, development and production company (AIM: GED) with operations in Colombia, announces that on 13 October 2014, the Company entered into a conditional share purchase agreement (the "Agreement") with Platino Energy Holdings, Corp., which is a subsidiary of Platino Energy Corporation, a TSX listed oil and gas exploration company (the "Purchaser"), for the disposal of the rights and obligations of the Company's contract areas within the Llanos Basin (the "Llanos Assets") for a gross consideration of US$50 million in cash (the "Consideration").

 

The disposal will be effected by the sale of the entire issued share capital of the Company's wholly owned subsidiary, Colombia Energy Development Company ("CEDCO") to the Purchaser (the "Transaction"). Following a process of corporate restructuring completed earlier in the year, CEDCO holds only the assets and liabilities relating to the Llanos Assets.

 

Due to its size and nature, the Transaction constitutes a fundamental change of business pursuant to Rule 15 of the AIM Rules for Companies and is conditional upon shareholder approval at a general meeting of the Company (the "General Meeting"). As the Purchaser is a Canadian listed entity, the Transaction is subject to approval by the TSXV. In addition, the Transaction is subject to approval by Empresa Colombiana de Petroleos S.A. ("Ecopetrol"), and various other conditions precedent. 

 

The following is a summary of the Group's current oil and gas contracts:

 

Middle Magdalena Assets to be Retained:

Contract Name

Country

Basin

Held with:

Expiry Date

Acreage

Proved Reserves (mmbbls)*

2P Reserves (mmbbls)*

(Bolivar

Colombia

Middle Magdalena

 Ecopetrol

2024

20,321

32.2

55.0

Bocachico

Colombia

Middle Magdalena

Ecopetrol

2022

54,605

11.0

40.4

Llanos Assets to be Sold:

Contract Name

Country

Basin

Held with:

Expiry Date

Acreage

Proved Reserves (mmbbls)*

2P Reserves (mmbbls)*

Rio Verde

Colombia

Llanos

Agencia Nacional de Hidrocarburos ("ANH")

2034

5,889

2.1

2.1

 Alcaravan

Colombia

Llanos

Ecopetrol

2021

23,802

1.3

3.4

 Los Hatos

Colombia

Llanos

ANH

2034

295

0.1

0.1

 

* The reserve information for Global Energy Development PLC, as disclosed in the Company's 2013 annual report, has been certified by a third-party firm, Ralph E. Davis Associates, Inc. as at 31 December 2013.

 

Completion of the Transaction will allow the Company to immediately realise value in respect of its Llanos Assets.  CEDCO's producing assets comprise the Group's Llanos Assets (being the Rio Verde, Alcaravan and Los Hatos contracts) which in the year to 31 December 2013 generated over 95 per cent. of the Group's cash flow.  In the year ended 31 December 2013, the Llanos Assets generated a total revenue of $32 million and profit before tax of $4.7 million.  The total non-current assets attributable to the Llanos segment were $75.1 million and the total non-current liabilities were $21.8 million.  The Transaction will result in the Company receiving gross cash proceeds of US$50 million, which figure is to be adjusted upon closing in respect of any CEDCO operating income received, and any capital expenditure spent, by Global in the intervening period prior to closing.

 

The Transaction is in line with the Company's previously announced policy that it was focusing its efforts on developing its oil reserves in the Bolivar Block and the Bocachico Block located in the Middle Magdalena Basin.  In March and May 2014, the Company entered into farm-out agreements in respect of the Bolivar and Bocachico assets (together, the "Farm Out Agreements") as part of this policy. Although the Farm Out Agreements are intended to partially fund the near-term development plans for the Middle Magdalena properties, further exploration and development will require additional capital.

 

The proceeds after the expenses of the Transaction will be used to completely eliminate the Company's outstanding debt, which has an outstanding balance of approximately US$7.5 million.  The application of the remaining net proceeds will be determined following the closing of the Transaction.

 

The Agreement contains standard representations and warranties. 

 

General Meeting

 

A circular containing the details of the Transaction and a notice convening the General Meeting, will be posted to shareholders in due course. Once published, the Circular will also be available to download from the Company's website at www.globalenergyplc.com.

 

The purpose of the Circular will be to provide background on and set out the reasons for the Transaction, to explain why the directors of the Company consider it to be in the best interests of the Company and its shareholders as a whole and to set out the resolution to be considered at the General Meeting.

 

The Directors will unanimously recommend that shareholders vote in favour of the Transaction. The Company has received irrevocable undertakings from HKN, Inc., Global's principal shareholder and Lyford Investments, Inc., which together are interested in 21,980,404 Global shares, representing approximately 60.87 per cent. of the issued share capital of the Company, to vote in favour of the Transaction.

 

For further information please contact:

 

Global Energy Development PLC

Anna Williams, Finance Director

[email protected]

www.globalenergyplc.com

 

 

+001 817 310 0240

Northland Capital Partners Limited

Matthew Johnson

Lauren Kettle  

+44 (0)20 7382 1100

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
DISFMMMGLFDGDZM

a d v e r t i s e m e n t