CALGARY and LONDON, Nov. 5 /CNW/ - Stratic Energy Corporation (TSX Venture: 'SE', AIM 'SE.') ("Stratic" or the "Company") announces the sale of its Italian business to Enel Trade SpA ("Enel"), a subsidiary of one of Italy's largest companies, and provides an update on the performance of its North Sea West Don field.
The sale to Enel involves Stratic's entire portfolio of assets in Italy, including its interest in the Longanesi gas field and other exploration acreage in the country, for a total cash consideration of 34.3 million ($50.9 million) and the assumption of existing obligations relating to the assets. Stratic is entitled to receive a further payment of 6.6 million ($9.8 million) provided the commencement of first production takes place before the end of 2011, reducing pro-rata by month, with no payment due if production commences after the end of 2012. The transaction is subject to usual industry conditions, including regulatory approval, and is expected to complete in the first quarter of 2010.
At West Don, Stratic now considers that 2009 gross production from the field will be approximately 1.75 million barrels of oil (mmbbls) (Stratic share: 0.30 mmbbls), compared with our previous estimate of 2.1 mmbbls (Stratic share: 0.36 mmbbls). The reduction reflects continuing gas lift and water injection performance below expectation. Work is well underway on the export pipeline tie-back to the Thistle facilities, with completion on-track for February 2010. Stratic plans to provide a further update on West Don production and reserves in the Company's third quarter interim results, to be released in late November 2009.
Kevin Watts, Stratic's President and Chief Executive Officer, commented: "We are delighted to announce the successful sale of our Italian business. This is the next step in our disposal programme and business restructuring which we commenced at the start of the year, and which saw the completion of the sale of our interests in the Breagh licences in August. When the Italian business sale completes, our disposals will have generated gross cash receipts totalling over $110 million. The Italian business sale proceeds will enable us to reduce net debt further, strengthen the balance sheet and provide resources for future investment."
Stratic was advised by Lazard & Co., Limited on the sale of its Italian business.
Stratic Energy Corporation is a Canadian-incorporated international oil and gas business focused on adding value principally through the appraisal, development and production of existing discoveries, supplemented by a low to moderate risk exploration programme. Stratic's principal interests are in the UK and Dutch sectors of the North Sea, Italy, Turkey and Syria. Its shares are listed on the TSX Venture Exchange in Toronto and on AIM, London and its principal operating office is in London, UK.
Forward-looking statements This news release contains certain forward looking statements, which involve assumptions with respect to future plans, production levels and results, and capital expenditures. The reader is cautioned that all such forward looking statements involve substantial risks and uncertainties and the assumptions used in their preparation may not prove to be correct. Stratic's actual results could differ materially from those expressed in, or implied by, these forward looking statements and accordingly, the forward looking statements are qualified by reference to these cautionary statements. The forward looking statements contained herein are made as at the date of this news release. Stratic undertakes no obligation to update or publicly revise forward looking statements or information unless so required by applicable securities laws.
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Stratic's Chief Operating Officer, Dr Mark Bilsland BSc (geology), PhD (petroleum petrophysics), and member of the SPE, is the qualified person who has reviewed and approved the technical information in this announcement for the purposes of the AIM Rules for Companies (incorporating the Guidance Note for Mining, Oil and Gas Companies).
SOURCE STRATIC ENERGY CORPORATION
For further information: For further information: John van der Welle, Chief Financial Officer, +44 20 7766 7900; Mark Bilsland, Chief Operating Officer, +44 20 7766 7900; Patrick d'Ancona, M:Communications, +44 20 7153 1547, Canadian Investor Relations, Roger Fullerton, (952) 929-7243, Email: email@example.com, Website: www.straticenergy.com