Condor receives CA$5.1 million deposit for the Shoba and Taskuduk Oilfields sale
October 07 2019 - 5:39PM
Condor Petroleum Inc. (“Condor” or the “Company”) (TSX:CPI) is
pleased to announce that its wholly owned subsidiary, Falcon Oil
& Gas Ltd (“Falcon”) has received the CA$5.1 million initial
deposit (US$3.8 million at the current exchange rate of 1.33) as
part of the overall CA$32.7 million total proceeds (“Total
Proceeds”) Falcon is to receive for the sale of its 100% interests
in the Shoba and Taskuduk production contracts and associated field
equipment. As per the binding sales agreement, the remainder of the
Total Proceeds is due upon closing the transaction, which is
expected in the first quarter of 2020.
The transaction requires various consents from
the Government of Kazakhstan and is subject to the satisfaction of
certain commercial conditions that are customary for a transaction
of this nature. The Company intends to use the Total Proceeds to:
pursue larger value growth opportunities within the region; pay
down amounts owing under its existing credit facility; conduct
additional activities to increase natural gas production in Turkey;
and resume Kazakhstan exploration activities once the 630 day
exploration extension is formalized for the Zharkamys Contract.
FORWARD-LOOKING STATEMENTS
Certain statements and information in this news
release constitute forward-looking information under applicable
securities legislation. Such statements and information are
generally identifiable by the terminology used, such as
“anticipate'', “intend”, “expect”, “plan”, “estimate”, “budget'',
“outlook'', “scheduled”, “may”, “will”, “should”, “could”, “would”,
“in the process of” or other similar wording. Forward-looking
information in this news release includes, but is not limited to,
information concerning: foreign currency exchange rates, including
the Canadian dollar equivalent of the deposit and the expected
Total Proceeds both as of the date of this press release and at the
closing of the transaction, which may result in a higher or lower
Canadian dollar equivalent of Total Proceeds; the timing and
ability to obtain the required consents and satisfy the various
governmental and commercial conditions; the timing of the closing
of the transaction; the use of proceeds from the transaction,
including the repayment of amounts owing under Condor’s credit
facility; the timing and ability to pursue other growth
opportunities; the timing and ability to increase natural gas
production in Turkey; possible outcomes regarding the Zharkamys
Contract including the possibility that the term may be extended
or, conversely, that it may revert back to the Ministry; the timing
and ability to resume exploration activities on the Zharkamys
Contract property; the timing and ability to obtain various
approvals and conduct the Company’s planned exploration and
development activities; and related and general business strategies
and objectives.
Forward-looking statements involve the use of
certain assumptions that may not materialize or that may not be
accurate and are subject to known and unknown risks and
uncertainties and other factors, which may cause actual results or
events to differ materially from those expressed or implied by such
information. Condor’s operations are also subject to certain other
risks and uncertainties inherent with oil and gas operations and
additional information on these and other factors that could affect
Condor’s operations and financial results. These factors are
discussed in greater detail under “Risk Factors - Risks Relating to
the Company” in Condor's Annual Information Form, which may be
accessed through the SEDAR website (www.sedar.com). The Company
believes that the expectations reflected in these forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon.
Readers are cautioned that the foregoing list of
important factors affecting forward-looking information is not
exhaustive. The forward-looking information contained in this news
release are made as of the date of this news release and, except as
required by applicable law, Condor does not undertake any
obligation to update publicly or to revise any of the included
forward-looking information, whether as a result of new
information, future events or otherwise. The forward-looking
information contained in this news release is expressly qualified
by this cautionary statement.
ZHARKAMYS CONTRACT
The Company’s Zharkamys Contract was due to
expire on December 14, 2016. Prior to this date, the Kazakhstan
Chamber of International Commerce and subsequently the Kazakhstan
Civil Court (“Civil Court”) confirmed that a force majeure event
had occurred which, under Kazakhstan subsurface use law, can be the
basis for the Zharkamys Contract validity period to be extended for
a period of 630 days. In May 2017, the Kazakhstan Court of Appeal
(“Court of Appeal”), pursuant to an appeal filed by the Ministry,
ruled that the force majeure event was not recognized and reversed
the decision of the Civil Court. The Company referred the case to
the Kazakhstan Supreme Court (“Supreme Court”) and in November 2017
the Supreme Court ruling overturned both the Civil Court and the
Court of Appeal rulings and referred the case back to the Civil
Court for further review by a new panel of judges. In March 2018
the Civil Court ruling confirmed that the force majeure event had
occurred. In April 2018 the Ministry appealed the Civil Court
ruling and in May 2018 the Court of Appeal upheld the Civil Court
ruling that the force majeure event had occurred. The Ministry did
not appeal to the Supreme Court within the six months permitted by
Kazakhstan law. The Company has submitted an application to the
Ministry for the 630 day extension and expects the exploration
period to the Zharkamys Contract to be extended during 2019.
ABBREVIATIONS
The following is a summary of abbreviations used in this news
release:
CA$
Canadian
DollarsUS$
United States Dollars
The TSX does not accept responsibility
for the adequacy or accuracy of this news release.
For further information, please contact Don
Streu, President and CEO or Sandy Quilty, Vice President of Finance
and CFO at 403-201-9694.
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