SYDNEY, AUSTRALIA, Apr. 26 (Korea Bizwire) - Skyland Petroleum Limited (ASX: SKP) is pleased to announce today that its wholly owned subsidiary, Skyland Petroleum Group Limited (both Skyland Petroleum Limited and Skyland Petroleum Group Limited to be known here as “Skyland” or the “Company”) has entered into a deed of exclusivity relating to a Heads of Agreement (“HOA”) with a private oil and gas investment entity based in Moscow, Russia, concerning the potential acquisition of a majority interest in four prospective oil and gas blocks located within the Republic of Sakha (Yakutia) of East Siberia, Russian Federation (the “Assets”).
Skyland’s entry into this arrangement followed a HOA which makes provision for Skyland’s purchase of a majority interest in the Assets as well as setting out the framework in which Skyland shall conduct its due diligence investigations.
The Assets are located in the prolific oil and gas region of East Siberia and consist of four licences, both exploration and production, and cover a total area of over 9,210 square kilometres. The blocks are situated close to existing infrastructure and transport routes, including the operational East Siberia-Pacific Ocean oil trunkline (“EPSO”) and the “Power of Siberia” gas trunkline which is currently under construction. These pipelines do and will connect the area to both China and the Pacific Ocean.
One of the blocks (which lies adjacent to a giant producing oil and gas field) contains a gas discovery with State Approved reserve figures (unverified by Skyland) of some 10.6 billion cubic metres (Bcm) of gas (374 billion cubic feet (Bcf)) or 62 million barrels oil equivalent (MMboe) and is thought to have considerable upside. The three other blocks (two of which lie adjacent to another gas discovery) have unrisked prospective resources (unverified by Skyland) calculated by the Russian Academy of Sciences Siberian Branch of some 141 Bcm of gas (4,977 Bcf; 829 MMboe).
Dr. David Robson, the Company’s Chairman and Managing Director commented:
“We are very pleased to announce this exclusivity arrangement with a Russian investment entity in respect of these Sakha assets. Whilst, of course, any progress with respect to this potential acquisition is subject to the satisfaction of the Company’s technical, legal and commercial personnel, we believe that these assets may in the future form a distinct part of our growing portfolio of oil and gas assets.
Over the term of the exclusivity period the management and operational teams of Skyland shall work tirelessly and diligently to calculate the value of these assets. We hope that, where these assets are shown to be able to contribute to the enhancement of our shareholders’ investment in our Company, we will be able to move ahead with the relevant acquisitions and take our first step into Russia. Skyland firmly believes that the hydrocarbon resources (in particular, gas) of the Sakha (Yakutia) Republic can be cost effectively commercialized and delivered to East Asian markets to the benefit of all stakeholders.”
Exclusivity Arrangement Details:
The terms of the exclusivity arrangement provide that Skyland shall have the exclusive right to conduct legal, technical and commercial due diligence in respect of the Assets and the exclusive right to negotiate the potential acquisition of such Assets for an initial term of three months with an option to extend such exclusivity arrangement for an additional two months.
The parties to the exclusivity arrangement shall, during the life of the agreement, commit joint efforts to work towards completing appropriate and relevant due diligence and to discuss and negotiate relevant legally binding acquisition documentation.
The arrangement includes customary termination provisions in favour of Skyland in the event that the exclusivity provisions are breached by the other party.
This announcement contains “forward-looking information”. Such forward-looking statements reflect the current views of the Company with respect to future events and are subject to certain assumptions. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company. The “forward looking statements” contained herein speak only as of the date of this announcement and, unless required by applicable law, regulation or ASX listing rules, the Company undertakes no obligation to publicly update or revise such information; whether as a result of new information, future events or otherwise. No representation, warranty or assurance (express or implied) is given or made in relation to any forward-looking statement. No representation, warranty or assumption (express or implied) is given in relation to any underlying assumption or that any forward looking statement shall be achieved. Given these uncertainties any reader of this announcement is cautioned not to place undue reliance on any such forward looking statements.
It should be noted that there are numerous uncertainties inherent in estimating reserves and resources, in projecting future production, development expenditures, operating expenses and cash flows of hydrocarbon prospects and/or projects. Oil and gas reserve engineering and resource assessment should be recognised as a subjective process which cannot be measured without an individual judgment being made. References in this announcement to prospective resource estimates have an associated risk of discovery and risk of development. Further exploration and appraisal may be required to determine the existence of any quantity of potentially moveable hydrocarbons. The information presented in this release has not yet been verified by the Company or by any independent reserve and resources evaluator. The figures are based on estimates primarily prepared by the Russian Academy of Sciences Siberian Branch and the Company believes that the reserve and resource figures quoted have been prepared in accordance with Russian definitions, not in accordance with the standard definitions set out by the Society of Petroleum Engineers, Petroleum Resource Management System. A conversion factor of 6,000 cubic feet (170 cubic metres) of gas to one barrel of oil has been used in the calculation of barrels of oil equivalent.
Where any reference has been made to technical information prepared by a third party within this announcement, it is noted that consents of such third party have been sought where appropriate.
Source: Skyland Petroleum Limited via Marketwired