Copy the NR that LFD did .. sample below ... then send a complaint into IIROC
REPEAT: Longford Energy Inc. Announces Kurdistan Asset Transfer to Genel Energy plc
CALGARY, ALBERTA--(Marketwire - Jan. 16, 2012) - Longford Energy Inc. (TSX VENTURE:LFD) ("Longford" or "the Company") is pleased to announce that it has entered into a definitive sale and purchase agreement to divest its 40 per cent undivided interest in the Chia Surkh Block in the Kurdistan region of Iraq (the "Transaction") to Genel Energy plc ("Genel") which is already a 20% interest holder in the Chia Surkh Block. As part of the Transaction the Company will receive consideration of USD $68 million, of which USD $42 million cash will be paid to Longford and $26 million will be paid directly to the Kurdistan Regional Government (the "KRG") as settlement for outstanding capacity building bonus payments, and related interest, due under the Chia Surkh Block Production Sharing Contract (the "PSC").
The Company acquired a 40% interest in the PSC in 2009. The three year first exploration term of the PSC was set to expire on June 11, 2012. Under the minimum work program obligations, Longford has an outstanding commitment for the drilling of two exploration wells, and a commitment to a minimum expenditure of USD $20 million over the next 5 months, which cannot be realistically fulfilled (financially as well as operationally) in a timely manner. This expected non-performance, and the risk of contract expiration and cancellation, was a key consideration in the Transaction.
As a part of government approval for the Transaction, Longford has entered into an assignment and novation agreement with the KRG, Genel and Petoil Petroleum and Petroleum Products International Exploration and Production Inc. amending the terms of the PSC. Pursuant to this amendment, if Longford is unable to secure the requisite shareholder approval for the Transaction by March 1, 2012, Longford has agreed to assign its interest in the Chia Surkh Block back to the KRG without compensation. As consideration for this amendment, the Ministry of Natural Resources of the Kurdistan Region has indicated to Longford that it will support the Transaction when submitted for final approval to the Regional Oil & Gas Council.
Mr. Ahmed Said, President & CEO, commented, "At the time of the acquisition of its interest in 2009, the Company expected to spend in excess of USD $100 million over three years on the exploration of the Chia Surkh Block, however due to challenging market conditions Longford was not able to fully capitalize this project to meet the commitments. Given the above circumstances, I believe the Transaction represents a superior alternative for our shareholders".
As a part of the proceeds, the Company intends to issue a one-time dividend of CDN
.10, per share, to shareholders of record after the closing of the Transaction. The remainder of funds is expected to be utilized for other international corporate development and acquisition opportunities. The Company has started a preliminary process of identifying potential assets for acquisition, including potential opportunities in Central and West Africa. The Board of Directors strongly believes that given the current prevailing market dynamics in the junior oil & gas sector, there are exceptional opportunities, in relatively stable jurisdictions, to pursue with the potential of creating significant value for its shareholders. As a part of its restructuring, the Company expects to recruit key management personnel to assist in executing its new strategy.
Canaccord Genuity Corp. has been retained by Longford as exclusive financial advisor with respect to the proposed Transaction, and in connection therewith has delivered a preliminary opinion to the board of directors of Longford confirming that the proposed Transaction is fair, from a financial point of view, to the security holders of Longford.
The closing of the Transaction is conditional on the receipt of various consents, approvals and assurances, including TSX-V approval, Longford shareholder approval and the approval of the Kurdistan Regional Government.
About Longford Energy Inc.
Longford Energy Inc. is a junior Canadian oil and gas exploration and production company. Longford holds a 40% working interest in the Chia Surkh Block Production Sharing Contract in the Kurdistan Region - Iraq. The Chia Surkh Block offers a field development opportunity and multiple exploration prospects.