ST. HELIER, JERSEY, May 18 /CNW/ - PetroKamchatka Plc, ("PetroKamchatka"
or the "Corporation"), an international junior oil exploration company
incorporated in the Bailiwick of Jersey, announces that it has halted
the trading of its stock at the request of the TSX Venture Exchange
(the "TSX-V") to allow the dissemination of this news release
announcing that the Corporation has signed a non-binding Letter of
Intent ("LOI") with Mr. Sergey Dokuchaev and Mr. Valery Garipov in respect of a proposed
share exchange transaction. Pursuant to the LOI, PetroKamchatka would issue common shares in exchange for all the outstanding stock of
Advastor Services Ltd. ("Advastor"), a Cyprus-holding company that is
100% owned by Mr. Dokuchaev and Mr. Garipov (the "Share Exchange").
Advastor, in turn, owns 100% of the stock in the charter capital of each of LLC "Severgeofisika", LLC "NefteGeoService Company", CJSC
"Uhtaneftegasrasvedka" and CJSC "PechoraPetroleum". These four Russian
entities hold six exploration licences in the Komi Republic, in
northern European Russia, an established oil and gas producing region
close to existing production and transportation infrastructure. The
total acreage of the six licence areas is approximately 2,700 km2 and includes two drill-ready prospects. The trading halt of the
Corporation's stock will remain effective until the TSX-V receives and reviews preliminary information on the potential new
insiders of the Corporation, those being Mr. Dokuchaev and Mr. Garipov.
Mr. Graeme Phipps, President of PetroKamchatka, is quoted as saying
"this transaction will provide lower exploration risk oil opportunities
within close proximity to infrastructure that offsets the high risk,
high potential Kamchatka exploration. I am excited by these
opportunities and look forward to building on our relationship with
Messrs. Garipov and Dokuchaev."
The purchase consideration for the stock of Advastor will be payable in
common shares of the Corporation at a price that will be equivalent to
PetroKamchatka's net book value per share of approximately US$0.029 as
of February 28, 2011, subject to closing adjustments.
The final purchase consideration and number of shares to be issued
pursuant to the Share Exchange will be based on an independent
third-party resource assessment, which is presently being conducted by
DeGolyer & MacNaughton to be compliant with the requirements of NI
51-101 (the "Resource Assessment"). Preliminarily, the Corporation
anticipates that it will acquire the shares at an enterprise value
equivalent to approximately US$0.30 per barrel of net risked resources
identified in the Resource Assessment, subject to closing adjustments.
A pre-condition to closing the Share Exchange is a requirement that the
Corporation raise financing of at least US$30 million (the
"Financing"). The Corporation anticipates that it will pursue a best
efforts private placement of its common shares to accredited investors
in Canada, and their equivalent in the United Kingdom and Russia. The
net proceeds from the Financing will be used to: (i) drill the two
drill-ready prospects in the near term, (ii) further other work
commitments on the six exploration licenses, and (iii) provide working
capital. If the Corporation is able to raise additional capital beyond
the minimum, it will seek to purchase post-exploration risk blocks in
the vicinity of the target assets that are subject of the proposed
transaction. The issue price of the common shares to be issued pursuant
to the Financing will be determined in the context of the market.
The Corporation anticipates that either as part of both the Share
Exchange and the Financing (collectively, the "Transaction") or at some
point prior to closing of the Transaction, it will propose to its
shareholders a consolidation of its 490,396,137 outstanding shares, at
a ratio to be determined based on a consideration of the number of
shares to be issued pursuant to the Transaction and the industry norm
of comparable junior exploration issuers.
Of the six exploration licences to be acquired in this potential
transaction, two exploration licences are located in the Izhma-Pechora
Trough and four exploration licences are located in the Upper Pechora
Trough. The following lists the exploration licences with a summary of
the exploration work completed to date and work commitments to be
Visovsky Licence: The total acreage of this exploration block is 732 km2 with 485 km2 of 3D seismic acquired and two prospects and six leads identified. The
outstanding work commitment pursuant to the licence is the drilling of
one exploration well.
Yermolovsky Licence: The total acreage of this exploration block is 189
km2 with 134 km2 of 3D seismic acquired and two prospects identified. One exploration
well was drilled on the block in 2007. The outstanding work commitment
pursuant to the licence is the drilling of one exploration well.
Lemsky Licence: The total acreage of this exploration block is 610 km2 with 445 km of historical 2D seismic acquired and multiple leads
identified. The outstanding work commitment pursuant to the licence is
the completion of 150 km of 2D seismic, 150 km2 of 3D seismic, and the drilling of one exploration well.
Lunvozhsky Licence: The total acreage of this exploration block is 352
km2. The outstanding work commitment pursuant to the licence is the
completion of 150 km of 2D seismic, 100 km2 of 3D seismic, and the drilling of one exploration well.
Lebyazhsky Licence: The total acreage of this exploration block is 513
km2. The outstanding work commitment pursuant to the licence is the
completion of 200 km of 2D seismic, 100 km2 of 3D seismic, and the drilling of one exploration well.
VerhnePechorsky Licence: The total acreage of this exploration block is
314 km2. Two exploration wells were drilled on the block, one in 2006 and the
other in 2008. The outstanding work commitment pursuant to the licence
is the completion of 100 km of 2D seismic and the drilling of one
Upon successful closing of the Transaction, it is proposed that Mr.
Garipov and Mr. Dokuchaev will be added to the Board of Directors of
From 1996-2001, Mr. Garipov was the Deputy Minister, Russian Federation
Ministry of Fuel and Energy, in charge of exploration for oil and gas
in Russia, overseeing the activity of the Central Commission on
Development of Oil and Gas Fields. The Commission's function was to
consider and approve field development programs and establish
hydrocarbon production levels. Since 2001, Mr. Garipov has been
involved in private business developing oil and gas exploration
projects in Russia.
Mr. Dokuchaev is an independent businessman residing in Moscow.
Presently he is the Chairman of the Board of Directors of JSCB
"Lanta-Bank". Lanta Bank is active in the financing of gold mining and
jewelry production in Russia. Mr. Dokuchaev is also a joint owner of
the only Russian Insulin pharmacology factory - "Sanofi-Aventis
Vostok". He is a Shareholder of OJSC "GV Gold" that is among the
top-ten gold mining companies in Russia with annual production of
approximately 125,000 oz. in 2010. He also holds the position of
Chairman for Investment in the branch of precious stones and metals in
the Russian Chamber of Trade and Industry.
It is intended that the day-to-day operations of the combined company
will be led by the current management of PetroKamchatka, supplemented
where and as thought beneficial by senior officers and employees of
Advastor and the Russian holding companies. The Board of
PetroKamchatka anticipates analyzing the current management structure
and capitalizing on the new or supplemental skill sets that may become
available pursuant to the Transaction.
The LOI contemplates that the parties will negotiate a mutually
acceptable definitive Share Purchase Agreement to be executed upon
finalization of the Resource Assessment and determination of the final
share exchange. Currently the parties anticipate that the Resource
Assessment will be completed by July 1, 2011.
The LOI has a mutual break fee of US$1,000,000 payable in the
circumstances of unwarranted termination of the Transaction.
The Transaction is subject to a number of conditions precedent,
including financing, completion of satisfactory due diligence, receipt
of all required corporate regulatory and shareholder approvals and
negotiation and execution of definitive transaction documents. There
can be no assurance that The Transaction will be completed or completed
as described herein. Further details of The Transaction, including the financing, will be
released as they become available.
Assuming the Transaction does proceed, the Corporation will seek to
farm-out its Kamchatka acreage and rename itself to reflect the broader
Russian geographic focus of the company going forward.
Forward looking Statements or Information
Certain statements included in this news release constitute
forward-looking statements or forward-looking information under
applicable securities legislation. Such forward-looking statements or
information are provided for the purpose of providing information about
management's current expectations and plans relating to the future.
Readers are cautioned and that reliance on such information may not be
appropriate for other purposes, such as making investment decisions.
Forward-looking statements or information typically contain statements
with words such as "anticipate", "believe", "expect", "plan", "intend",
"estimate", "propose", "project" or similar words suggesting future
outcomes or statements regarding an outlook. Forward-looking
statements or information concerning PetroKamchatka in this news
release may include, but are not limited to statements or information
with respect to: business strategy and objectives; development,
exploration, acquisition and disposition plans, and the timing and
results thereof. Forward-looking statements or information are based
on a number of factors and assumptions which have been used to develop
such statements and information but which may prove to be incorrect.
Although PetroKamchatka believes that the expectations reflected in
such forward-looking statements or information are reasonable, undue
reliance should not be placed on such statements because PetroKamchatka
can give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be identified in
this news release, assumptions have been made regarding, among other
things: the timely receipt of any required regulatory and shareholder
approvals; the ability of PetroKamchatka to obtain qualified staff,
equipment and services in a timely and cost efficient manner; and the
ability of PetroKamchatka to obtain financing on acceptable terms.
Readers are cautioned that the foregoing list is not exhaustive of all
factors and assumptions which have been used.
Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of risks
and uncertainties which could cause actual results to differ materially
from those anticipated by PetroKamchatka and described in the
forward-looking statements or information. These risks and
uncertainties may cause actual results to differ materially from the
forward-looking statements or information.
The forward-looking statements or information contained in this news
release are made as of the date hereof and PetroKamchatka undertakes no
obligation to update publicly or revise any forward-looking statements
or information, whether as a result of new information, future events
or otherwise unless required by applicable securities laws. The
forward-looking statements or information contained in this news
release are expressly qualified by this cautionary statement.
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.
For further information in respect of the Corporation, please visit the
PetroKamchatka Plc website at www.petrokamchatka.com
SOURCE PetroKamchatka Plc
For further information:
| PetroKamchatka Plc |
| Graeme Phipps |
President and Chief Executive Officer
St. Helier, Jersey,
Tel: +44 7733 363 016 or +1 403 630 2367
| Adam Landes |
Balearic Islands, Spain
Tel: +34 699 530 180 or +44 7767 312 800
| Calvin Brackman |
Vice President, Corporate Planning
c/o 1000, 505 - 3rd Street S.W.
Calgary, Alberta, Canada
Tel: +1 403 984 5132
Cell: +1 403 690 6230