AIM-listed oil and gas production company Gulfsands Petroleum has reached an agreement with the Caithness Petroleum Limited Group to acquire Cabre Maroc Limited, a wholly-owned subsidiary and operator of a portfolio of highly prospective oil and gas exploration licences and gas exploitation concessions in northern Morocco.
The total consideration for the transactions will result in cash payments totalling approximately $19m by way of purchase consideration and the refundable provision of up to $11.5m of financial guarantees made to ONHYM, the regulator of Morocco's oil and gas sector, and up to $11m in funding a portion of Caithness's pro-rata share of the cost of exploration activities on two of the permit areas in which Caithness has retained minority participating interests.
Completion of the acquisition of Cabre Maroc is anticipated for mid-January 2013 following approval of the transaction by Caithness's shareholders. The transaction is not subject to regulatory approval.
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Following completion of the acquisition and various post-completion matters, Gulfsands and Caithness Petroleum will become co-venturers with ONHYM in respect of the Fes and Taounate Permits through their respective wholly owned subsidiaries, with Gulfsands the operator of both exploration joint ventures.
Commenting on this announcement, Ric Malcolm, Gulfsands Chief Executive Officer, stated: "We believe this acquisition represents a tremendous opportunity to develop a substantial business in Morocco, with potential near term cash flow and exciting exploration upside and in a country well recognized for its stability and attractive fiscal terms. These fiscal terms ensure that the discovery of even a relatively modest volume of recoverable oil or gas on either of the Fes and Taounate Permits would deliver very significant value to our shareholders."
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