email go to sedar
search longford energy and look for the circular from January 30th.
In print on page 9 it states
Benefits of the Arrangement
The Corporation’s board of directors believes that the Asset Sale is in the best interests of Longford and
the Shareholders and that the Asset Sale offers a number of benefits, including:
1. Shareholder Value. The Board concluded that the value offered to Shareholders under the
Purchase Agreement is more favourable than the value that might have been realized by
pursuing other sale opportunities or by attempting to raise funds to drill two
exploration/appraisal wells to meet the minimum work obligations under the PSC. Given the
state of the current financial markets and the June 2012 deadline to fulfil the PSC work
obligations, the Asset Sale was deemed to be a superior alternative which will allow
Shareholders to immediately realize value through the proposed issuance of a one-time
distribution of CDN
.10 per share.
2. Elimination of Potential Litigation for Non-Performance. In connection with the Asset Sale the
Corporation also anticipates receiving a release from the KRG of all the outstanding
commitments of FMK under the PSC. As such, Longford management believes that the risks of
potential future litigation by the Kurdistan Regional Government, and the other partners, for
nonpayment of its bonus obligations, and related interest, and non-performance of certain
other commitments have been eliminated.
3. Growth Opportunities. The consideration to be received from the proposed Asset Sale will allow
the Corporation to pursue potential assets for acquisition, including potential opportunities in
Central and West Africa. The Board believes that given the current market conditions, there may
be opportunities that could be capitalized upon.
4. A Stronger Financial Position. The Board believes the sale of the Assets to Genel will result in an
improved financial position and balance sheet for the Corporation.
5. Relationship with the KRG. The KRG has recently expressed its preference for working and
dealing with major international oil companies. As a result, the Corporation’s relationship with
the KRG has deteriorated over the last year. The Asset Sale will allow the Corporation to exit the
Kurdistan Region and focus efforts on opportunities in other regions of the world.
Use of Sale Proceeds
From the proceeds of the Asset Sale, the Corporation intends to issue a one-time distribution of CDN
.10, per Share to shareholders of the Corporation (the "Cash Distribution"). The Board believes it is in