Adira Enters into a Memorandum of Understanding with Modiin Energy on
Gabriella License to Secure Drill Contractor to Commence Drilling
TORONTO, June 13, 2012 /CNW/ - ADIRA ENERGY LTD. (TSXV: ADL) (OTCBB: ADENF) (FRANKFURT: AORLB8). Adira Energy Ltd. ("Adira" or the "Company") is pleased to announce that Noble International Ltd ("Noble Drilling") has accepted a Letter of Award ("LOA"), which will enable Modiin Energy L.P ("Modiin Energy") to execute a detailed drilling contract (the "Agreement") on behalf of the Gabriella consortium partners, including Adira and
Brownstone Energy. Adira further announces it has signed a Memorandum
of Understanding ("MOU") with Modiin Energy authorizing Modiin Energy to enter into a drilling
contract with Noble Drilling and/or any of its affiliates on behalf of
the working interest parties to drill the Gabriella License (the "License") prior to the revised spud date, June 30, 2013. To the extent
possible, representatives of Adira shall participate in the
negotiations with Noble Drilling regarding the Agreement.
Where the Agreement requires the provision of a Letter of Credit or a
Cash Deposit as collateral to Noble Energy, the Parties shall together
decide which form of collateral to provide ("Rig Collateral"). Pursuant to the LOA, the consortium will finalize the Agreement to
secure the Noble Homer Farrington rig for a minimum of 75 days for a
program that is expected to include one well plus sidetrack.
In terms of the MOU, Adira undertakes to provide its share of the Rig
Collateral, 30 days prior to the date to be set in the Agreement. In
the event of a breach by Adira, the Company agrees to withdraw from the
Joint Operating Agreement covering the License, and assign its
participating interest in the License to the other consortium partners
in proportion to their holdings in addition to relinquishing all
back-in rights, overriding royalty interests and management fees,
rights of first refusal and co-sale rights to Modiin Energy. Transfers
of working interests are subject to the approval of the Petroleum
Commissioner of Israel.
Additionally, Adira grants Modiin Energy, effective once the Agreement
has been signed, an irrevocable option to purchase ("Option") from Adira, a 15% participating interest in the Yitzhak License ("the
"Option Interest"). Modiin Energy shall be entitled to exercise the Option until the
earlier of (1) December 31, 2012, and (2) the 30th day from the date
Adira notifies Modiin Energy of the execution of an agreement with a
drilling contractor in relation to Yitzhak License.
If Modiin Energy exercises the Option, it agrees to reimburse Adira for
its share of the past expenditures in respect of its 15% share,
incurred by Adira in connection with the operations conducted in the
Yitzhak License up to the date of transfer of the Option Interest.
Adira will also be entitled to an overriding royalty interest from
Modiin Energy of 3% in all oil and gas (including any distillate and
condensate) produced, saved and marketed from the area covered by
Yitzhak License that is attributable to the Option Interest, before
Payout, and 4.5% after Payout. The transfer of the Option Interest is
subject to the approval of the Petroleum Commissioner of Israel.
Jeffrey E. Walter, Chief Executive Officer of Adira Energy stated: "With the execution of the Letter of Award to drill our Gabriella
License, Adira continues to advance our exploration program in the
Eastern Mediterranean. We are excited that we have been able to secure
a high quality rig, given the global shortage of semi-submersibles
rigs. The additional benefit to Adira is that the MOU enables Modiin
Energy, our 70% partner, to sign the rig contract and take the
financial obligation for the consortium. The MOU further ensures that
all the partners are committed to drill this well. In exchange for
their financial obligation, Adira has granted Modiin a 15% option to
participate on our other high quality oil potential block - the Yitzhak
License, in which we currently have a 60% working interest. This
farmout option is a continuation of the Company's strategy to farm down
our working interest in Yitzhak prior to the spud date of October 30,
2013. Modiin recognizes that the Yitzhak license is added value to the
Gabriella project. Adira's Eastern Mediterranean oil exploration
program continues to progress due to the synergies that we have
established with our partners in the region."
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.
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
Corp. Dev. Arad Communications
+972-3-7693333 or +972-54-6699311