TORONTO, July 1, 2013 /CNW/ - ADIRA ENERGY LTD. (TSXV: ADL) (OTCBB: ADENF) (FRANKFURT: AORLB8). Adira Energy Ltd. is pleased to announce that its wholly owned
subsidiary, Adira Energy Israel Ltd. (together with Adira Energy Ltd.,
"Adira"), has entered into a settlement and release agreement (the "Agreement") with Modi'in Energy LP ("Modi'in") and Brownstone Energy Inc. ("Brownstone") (together with Adira, the "Consortium"). The Agreement resolves the Consortium's previously disclosed
disputes over their respective funding obligations and related
suspension of operations on the Gabriella License.
Pursuant to the Agreement, the Consortium members agree to waive and
release each other from any claims and demands they may have with
respect to the Gabriella License. The Agreement further provides that
the Consortium members will fund their proportionate share of costs
associated with the Gabriella License incurred in connection with the
attempted drilling of the first well. Adira's net share of the costs
total approximately US$3.2 million and is payable in stages over a 90
day period from the Effective Date (as defined below).
Jeffrey E. Walter, Chief Executive Officer of Adira commented, "Adira and its partners in the Gabriella License have faced many
operational and financial challenges over the past half year. Despite
confirming contingent resources on the License and having a drilling
rig on site, the Consortium was unable to execute the drill program.
Appreciating the need for co-operation and mutual agreement in order to
maintain and extend the tenure of the License, as well as to secure
financing for the continued operations on the License, the Consortium
has worked diligently to complete the co-operation agreements and
submit the request for License extension to the Ministry of Energy and
Water. Adira has the intention and aspiration to develop the Gabriella
License and is currently assessing finance options to maintain its
interest in the License."
The Agreement also provides the Consortium members with tag-along rights
for a period of one year from the Effective Date (as defined below) to
participate in any farm out of their participating interests in the
Gabriella License consummated by the other members. In addition, Adira
agrees to relinquish its 15% buy back option and management fee, and
reduce its overriding royalty interest to 2.625%.
In the event that Adira does not pay its share of abovementioned costs,
at Modi'in's request, Adira may withdraw from the Joint Operating
Agreement and assign its participating interest in the Gabriella
License to the remaining Consortium members, and will relinquish its
The Agreement is subject to Modi'in unitholder approval, which is
expected to be received within 10 days (the "Effective Date").
The Agreement replaces the Letter Agreement, dated December 20, 2012 and
the Memorandum of Understanding, dated June 12, 2012, signed by the
Gabriella and Yitzhak License Extension Request
Adira further announces that on June 30, 2013, it applied to the
Ministry of Energy and Water of the State of Israel (the "Ministry") for an extension of the dates for the execution of a drilling
contract on the Gabriella License to February 28, 2014, and for the
spud of the first well to December 31, 2014.
Adira also applied to the Ministry for an extension of the dates for the
execution of a drilling contract on the Yitzhak License, offshore
Israel, to September 30, 2014, and for the spud of the first well to
June 30, 2015.
About Adira Energy Ltd.
Adira Energy Ltd. is an oil and gas company which is focused in the
Eastern Mediterranean. The Company has three petroleum exploration
licenses offshore Israel; the Gabriella, Yitzhak and Samuel Licenses.
These licenses are located respectively 10 km offshore between Netanya
and Ashdod, 17 km offshore between Hadera and Netanya and adjacent to
the coast between Ashkelon and Bat-Yam. The Company also has an option
on the Yam Hadera License, offshore Israel, which is located 30
kilometers offshore Israel, between Hadera and Haifa and North West of
Adira's Yitzhak license.
Forward-Looking Statement Disclaimer
This press release includes certain statements that may be deemed
"forward-looking statements". All statements in this press release,
other than statements of historical facts, are forward-looking
statements. Although the Company believes the expectations expressed in
such forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance, and actual
results or developments may differ materially from those in the
forward-looking statements. Forward-looking statements are based on the
Company's internal projections, estimated or beliefs, concerning, among
other things an outlook on the estimated amounts and timing of
exploration work and capital expenditures or other expectation,
beliefs, plans, objectives, assumption, intentions or statements about
future events or performance, which are considered by management to be
reasonable at the time made. Actual events or results may differ
materially. Although the Company believes that the expectations
reflected in the statements are reasonable, it cannot guarantee future
results since such results are inherently subject to significant
business, economic, corporate, political and social uncertainties and
contingencies. Many factors cause the Company's actual results to
differ materially from those expressed or implied in any forward
looking statements made by, or on behalf of, the Company and the
foregoing stated factors are not exhaustive. The statements contained
herein are made as of the date hereof and the Company disclaims any
intent or obligation to update publicly any forward looking statements,
whether as a result of new information, future events or results or
otherwise, except as required by applicable law. Company shareholders
and potential investors should carefully consider the information
contained in the Company's filing with Canadian securities
administrators at www.sedar.com before making investment decisions with regard to the Company.
Neither the 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.
SOURCE: Adira Energy Ltd.
For further information:
Exec. Vice President
+1 416 250 1955
Manager, Investor Relations
+1 416 361 2211
Chief Financial Officer
+972 3 373 0166