Gulfsands Petroleum PLC Colombia Farmout Agreement Signed (9400M)
October 19 2016 - 4:05AM
UK Regulatory
TIDMGPX
RNS Number : 9400M
Gulfsands Petroleum PLC
19 October 2016
GULFSANDS PETROLEUM PLC
Colombia Farmout Agreement Signed
19 October 2016
Gulfsands Petroleum plc ("Gulfsands", the "Group" or the
"Company" - AIM: GPX), the oil and gas company with activities in
Syria, Tunisia, Colombia and Morocco, today announces that it has
signed a Farmout Agreement relating to the Colombian, Putumayo-14
Exploration and Production of Hydrocarbons Contract No 2 of 2013,
(the "PUT-14 Contract").
The Farmout Agreement has been agreed with Samarium Energy &
Resources Corporation, a fully owned subsdiary of Samarium
Tennessine Corporation and Samarium Investment Corporation, acting
as Guarantor (together "Samarium"). The Company has also
simultaneously entered into a Joint Operating Agreement ("JOA")
with Samarium Energy & Resource Corporation regarding the
operations of the PUT-14 Contract.
All Agreements are subject to various closing conditions
including the approval of the Agencia Nacional de Hidrocarburos in
Colombia ("ANH") and the Company will update the market as and when
those conditions are met or otherwise waived.
Under the terms of the Farmout Agreement:
-- Samarium will initially take a 70% Participating Interest in the PUT-14 Contract for nil consideration.
-- Samarium has the right, prior to receiving ANH approval of the transfer of the Participating Interest, to
terminate the Agreement at its sole, reasonable discretion should it determine that ANH cannot or will not grant
an extension to the PUT-14 Contract of at least 9 months from 7th November 2017.
-- In addition, Gulfsands has granted Samarium an option to acquire the remaining 30% interest in the PUT-14
Contract (the "Option"). The Option shall be exercisable for nil consideration but shall be subject to ANH
approval, transfer of full Operatorship to Samarium, and the release to Gulfsands and replacement by Samarium, of
the $1.7m Letter of Credit (held as a long term financial asset in the Company's accounts as at 31 December 2015)
which is in place to guarantee performance under the PUT-14 Contract.
-- Prior to the exercise of the Option, Samarium will carry Gulfsands, by funding 100% of the Minimum Exploration
Programme costs and certain other pre-approved costs related to the PUT-14 Contract, up to a cap of $16.1
million..
-- On the valid exercise of the Option, Samarium shall hold a 100% operating interest in the PUT-14 Contract.
-- Under the JOA and prior to the exercise of the Option, Gulfsands will remain the License Operator; responsible
for all administrative functions in relation to the performance of joint operations, and Samarium will
immediately become Technical Operator; responsible for all technical functions in relation to the joint
operations.
-- It is the intention of all parties that, subject to ANH approval, Samarium will ultimately assume full
operatorship covering both Licence Operator and Technical Operator responsibilities.
For further information, please refer to the Company's website
at www.gulfsands.com or contact:
Gulfsands Petroleum Plc +44 (0)20 7464 4490
John Bell, Managing Director
Andrew Morris, Finance Director
James Ede-Golightly, Non-Executive Chairman
Cantor Fitzgerald Europe
Sarah Wharry
Craig Francis +44 (0)20 7894 7000
Certain statements included herein constitute "forward-looking
statements" within the meaning of applicable securities
legislation. These forward-looking statements are based on certain
assumptions made by Gulfsands and as such are not a guarantee of
future performance. Actual results could differ materially from
those expressed or implied in such forward-looking statements due
to factors such as general economic and market conditions,
increased costs of production or a decline in oil and gas prices.
Gulfsands is under no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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October 19, 2016 05:05 ET (09:05 GMT)
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