Press release from Marketwire
Newton Energy Corporation Announces Entering Into a Farm-In Agreement on Two Deepwater Blocks in The Gambia in West Africa
Monday, August 27, 2012
CALGARY, ALBERTA--(Marketwire - Aug. 27, 2012) - Newton Energy Corporation (the "Company" or "Newton") (TSX VENTURE:NTN) announces that it has entered into a farm-in agreement (the "Farm-In Agreement") with Buried Hill Gambia BV ("Buried Hill"), pursuant to which Buried Hill will assign a 13.33% equity working interest in certain offshore licences off the coast of The Gambia (the "Licences") in consideration of Newton paying: (i) an initial payment of US$2,000,000 to Buried Hill to cover past costs, with a further payment of US$2,500,000 if the Licences continue into the First Extension Exploration Period and a final payment of $2,762,500 in the event that Newton submits a development plan for a discovery on the Licences to the Gambian authorities; (ii) a carry for Buried Hill of 6.67% of the costs of the first exploration well on the Licences, capped at 10% of the final approved dry hole AFE cost; and (iii) a carry for Buried Hill of 6.67% of all non-drilling obligations and all general, administrative or similar costs associated with the Licences during the initial exploration period ending December 31, 2013.
The operator of the Licences is African Petroleum Gambia Limited ("African Petroleum"), a wholly owned subsidiary of African Petroleum, a public oil and gas company listed on the Australian Stock Exchange focused on offshore West Africa with current projects off the coast of The Gambia, Senegal, Cote d'Ivoire and Liberia.
Pursuant to the Farm-In Agreement, Buried Hill will assign the Licences to Newton following completion of certain conditions precedent, including but not limited to: (i) Newton completing a financing (the "Financing"); (ii) approval of the parties to the Joint Operating Agreements (the "JOAs") covering the Licences; and (iii) receipt of approval from the appropriate authority of the Government of The Gambia. The transaction is subject to regulatory approval including the approval of the TSX Venture Exchange Inc.
The Farm-In Agreement provides that Newton will have until September 30, 2012 to demonstrate to the satisfaction of Buried Hill that the potential investors in and lenders to Newton are reasonably likely to provide sufficient funds to enable Newton to meet its financial obligations under the Farm-In Agreement. The Farm-In Agreement further provides that Newton will have closed the Financing and satisfied the remaining conditions precedent within 120 days of the signing of the Farm-In Agreement.
In April 2011, after African Petroleum's 2010 farm-in to these Licences, independent advisors ERC Equipoise Ltd. carried out a Competent Person's Report for African Petroleum which indicated in excess of 30 significant prospects and leads on the two blocks, and highlighted two main prospects with highly significant prospective resource potential.
Commenting on the Farm-In Agreement, Steve Engwall, Newton's Chief Executive Officer said "The execution of this agreement is a very significant event in the broadening of the Company's asset base into a high-materiality exploration portfolio. We are particularly excited by the range of prospectivity in this previously undrilled deepwater part of The Gambia and look forward to the 2013 drilling programme."
- Newton enters into agreement with Buried Hill to acquire a 13.33% equity working interest in two off-shore Gambian exploration licenses by paying 20% of the costs incurred to the end of the initial exploration period,
- From a 2010 farm-in transaction, African Petroleum is paying 80% of the costs incurred to the end of the initial exploration period to earn a 60% equity working interest,
- African Petroleum is the operator of the blocks, which cover a combined total area of 2,668 square kilometres, and
- Buried Hill will retain a 26.67% equity working interest carried 20% by African Petroleum and 6.67% by Newton (as set out above) through the initial exploration period.
Newton is an oil and gas company with existing operated licenses in the onshore East Midlands Oil Province in the United Kingdom. Newton maintains offices in London, England and Calgary, Alberta.
Except for the historical and present factual information contained herein, the matters set forth in this news release, including words such as "expects", "projects", "plans", "anticipates", and similar expressions, are forward-looking statements that represents management of Newton's internal projections, expectations or beliefs concerning, among other things, the ability of Newton to complete the Financing and meet the other conditions precedent of the Farm-In Agreement. The projections, estimates and beliefs contained in such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Newton's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, those described in Newton's filings with the Canadian securities authorities. Accordingly, holders of Newton's shares and potential investors are cautioned that events or circumstances could cause results to differ materially from those predicted. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Newton's disclosure documents on the SEDAR website at www.sedar.com. Newton disclaims any responsibility to update these forward-looking statements except as required by applicable securities legislation.
FOR FURTHER INFORMATION PLEASE CONTACT:
Steve Engwall Newton Energy Corporation CEO +44 797 122 4675 firstname.lastname@example.org
200, 638 - 11th Avenue SW Newton Energy Corporation Calgary, Alberta T2R 0E2
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.