TORONTO, July 2, 2012 /CNW/ - Bontan Corporation Inc. (OTCBB: BNTNF)
announces that the previously announced settlement agreement dated
December 15, 2011 with the IPC Parties (IPC Cayman, International Three
Crown Petroleum LLC and JKP Petroleum Company LLC), as extended from
time to time and amended, closed on June 29, 2012.
Under the terms of the revised settlement agreement Bontan received US$5
million at closing and surrendered all its shares in IPC Cayman for
cancellation. Bontan and IPC Parties exchanged mutual releases and
dismissed all lawsuits against each other and against IPC Oil and Gas
Holdings Ltd. (formerly, Shaldieli Ltd.) and certain of its promoters.
Closing funds were paid into escrow pending receipt of approvals from
the Israel Tax Authority.
As additional consideration, on or before December 31, 2012, based on a
revaluation of the surrendered shares to be performed by the IPC
Parties, Bontan will either receive (i) at the option of the IPC
Parties, either a payment of US$9.625 million or a payment of US$6.625
million plus delivery of a US$3.0 million promissory note due on
November 8, 2013, carrying 5% p.a. interest and secured by an IPC
guarantee, a 0.15% Overriding Royalty Interest (ORI) and a pledge of
23% of the IPC Shares, or (ii) the right to exercise an option to
purchase 49.27% of the issued and outstanding share capital of IPC
Cayman on a fully diluted basis for an exercise price of US$4,927. (IPC
Cayman currently holds 144,821,469 shares of Shaldieli).
The revised Settlement Agreement includes an obligation to pay Bontan an
additional amount based on the increase in value of a specified number
of Shaldieli shares, with the obligation guaranteed by IPC and also
secured by the 0.15% ORI. This amount is only payable if the value of
the specified number of Shaldieli shares is worth more than US$3M.
Moreover, the payment may not exceed an additional US$3.0 million. In
order for any amounts to be paid under this provision, there would have
to be a significant increase in the market price over the current
In addition to the above, Bontan has already received US$375,000, a
0.25% ORI and certain other consideration from the IPC Parties.
Kam Shah, CEO comments: "We are pleased that we have come to a mutually
satisfactory settlement. Should the project ultimately be successful we
will further benefit. Whilst we do not have a new immediate project at
this time, we have been offered many new opportunities over the past
year and have been carrying out due diligence and evaluation. We would
also like to thank our legal team for the considerable effort that went
into the negotiations. Our shareholders have been very patient over the
last year waiting for final resolution and we now hope that we can
reward them with new efforts at enhancing shareholder value."
About Bontan Corporation Inc:
Bontan Corporation Inc. is an oil and gas exploration company that
operates and invests in exploration prospects. Through its
subsidiaries, Bontan seeks highly visible opportunities in countries
around the globe with a history of natural resource production that
offer exciting and attractive propositions. Bontan seeks to minimize
risk by bringing in either joint venture, carried or working interest
partners, depending on the size and scale of the project.
Bontan holds 0.25% ORI on proceeds of production, if any under the two
Israeli offshore drilling licenses - Sarah and Myra.
This news release includes forward-looking statements within the meaning
of the U.S. federal and Canadian securities laws. Any such statements
reflect Bontan's current views and assumptions about future events and
financial performance. Bontan cannot assure that future events or
performance will occur. Important risks and factors that could cause
actual results or events to differ materially from those indicated in
our forward-looking statements, include, but are not limited to: the
effect of economic and political developments in Israel and in the
Mideast; the risk that the final interpretation of the seismic and
other data may show or suggest, or that drilling may ultimately
demonstrate, that either or both of the Licenses contain no, or
noncommercial amounts of, hydrocarbons; the volatility in commodity
prices for crude oil and natural gas; the presence or recoverability of
estimated reserves; the potential unreliability or other effects of
geological and geophysical analysis and interpretation; government
regulation or other action, including the potential change in tax and
royalty provisions under active consideration by the Israeli
government;potential disruption from terrorist activities or warfare in
the region or at the Offshore Israel Project site; general economic
conditions; limited market available in Israel for oil and gas that may
be found in commercial quantities; other risks generally associated
with the exploration and development of international offshore drilling
projects in several thousand feet of water; and other risks identified
by the press releases and securities filings of the other working
interest owners in Israel and other jurisdictions in which such
releases and filings are made.
Bontan assumes no obligation and expressly disclaims any duty to update
the information in this News Release.
SOURCE Bontan Corporation Inc.
For further information:
For further information, contact Kam Shah, Chief Executive Officer of Bontan, at (416) 929-1806 and for investor relations contact John Robinson at (416) 860-0211.