Post by
RockLobster1 on Dec 22, 2010 10:32am
Selling Trinidad for 87 mil
Breaking News
Sonde Resources Corp. Enters Into Agreement to Sell Interest in Block 5(c)in Trinidad and Tobago and Articulates Future Business Strategy
08:16 EST Wednesday, December 22, 2010
CALGARY, ALBERTA--(Marketwire - Dec. 22, 2010) - SondeResources Corp. ("Sonde") (TSX:SOQ) (NYSE Amex:SOQ) announced today that it hasreached an agreement with Niko Resources Ltd. ("Niko"), under which Niko willacquire Sonde's interest in Block 5(c), located off the east coast of Trinidadand Tobago, for an aggregate purchase price of US$87.54 million. The purchaseprice is to be satisfied at closing via US$75.5 million, and the assumption ofSonde's liability up to US$12.04 million under the performance guaranteeprovided for the Block MG Exploration and Production (Public Petroleum Rights)license in Trinidad and Tobago, which will be assigned to Niko at closing fornominal consideration.
The agreement is subject to the satisfaction of certain conditions includingwaiver of rights of first refusal and approval from the Ministry of Energy andEnergy Affairs for Trinidad and Tobago. Closing is expected to occur on orbefore February 28, 2011, subject to extension to facilitate obtaining allrequired approvals. Niko has agreed to pay a refundable cash deposit of US$20million to Sonde upon receipt of a waiver of the rights of first refusal inrespect of Block 5(c). Sonde has agreed to pay a US$2 million break fee to Nikoin the event that such rights of first refusal are exercised and Block 5(c) istransferred pursuant to the exercise of such rights.
In addition to the above consideration, after closing the transaction Sondewill be entitled to reclaim an additional US$20 million on security deposit withBG International Limited ("BG"), which is currently captured on Sonde's balancesheet as restricted cash, bringing the total unrestricted cash available fromthis transaction to approximately US$95 million.
Due to the large capital expenditure requirements and an unclear developmenttimeline for Block 5(c), management and the Board have determined that a sale ofBlock 5(c) will best capitalize the Company to pursue its future growth plans.The sale of Block 5(c) is part of a broader strategic review that will positionthe Company for production and reserve growth over the next several years.
Accelerated development of Western Canada: A portion of the proceeds will beused to accelerate development of Sonde's position in Western Canada. Theseassets contain significant under-developed oil resource opportunities thatmanagement intends to exploit with a view to improving the Company's corporateoil and gas mix.
Drilling of Zarat North-1 well in North Africa: Proceeds will also be usedto fund ongoing costs required to complete and test the Zarat North-1 well (100%working interest), and other near-term activities on the 7th ofNovember Block. The well spudded Nov. 24 and has reached terminal depth, withtesting and evaluation in progress. Sonde anticipates that it will be able toprovide an update of the well in early Q1 2011.
Strategic review of Liberty LNG: Sonde is continuing to review alternativeswith respect to its 100% working interest in the Liberty LNG project.
"The sale of Trinidad assets is part of a progression of strategicinitiatives within Sonde to allow the Company to focus its business strategy,increase profitability and improve its balance sheet position", said JackSchanck, President and CEO of Sonde. "This sale will enable Sonde to refocus itsefforts on its core, operated exploration and development opportunities inWestern Canada and North Africa and will better position the Company for growthin production, cash flow and reserves over the next several years."
RBC Capital Markets is acting as financial advisor to Sonde with respect tothe proposed transaction and has provided the Board of Directors of Sonde withan opinion that as of December 21, 2010, the consideration to be received bySonde under the proposed transaction is fair, from a financial point of view, toSonde.
Sonde Resources Corp. is a Calgary, Alberta, Canada based diversified globalenergy company engaged in the exploration and production of oil and natural gasand in the development of a liquefied natural gas ("LNG") project. Itsoperations are located in Western Canada, offshore Trinidad and Tobago, NorthAfrica, and offshore Eastern United States. See Sonde Resources' website at www.sonderesources.com toreview further detail on Sonde Resources' operations.
This news release contains "forward-looking information" (within the meaningof applicable Canadian securities laws) and "forward -looking statements"(within the meaning of the U.S. Private Securities Litigation Reform Act of1995). Such statements or information are identified with words such as"anticipate", "believe", "expect", "plan", "intend", "potential", "estimate","propose", "project" or similar words suggesting future outcomes or statementsregarding an outlook. Such statements include, among others, those concerningexpected timing for closing of the proposed sale transaction and satisfaction ofclosing conditions, Sonde's go-forward business strategy including developmentof Western Canadian assets, and anticipated timing with respect to the ZaratNorth-1 well in North Africa.
Such forward-looking information or statements are based on a number ofrisks, uncertainties and assumptions which may cause actual results or otherexpectations to differ materially from those anticipated and which may prove tobe incorrect, including estimating timing for obtaining required approvals andcompleting the sale transaction with respect to Block 5c. Additional assumptionshave been made regarding, among other things, operating conditions, management'sexpectations regarding future growth, plans for and result of drilling activity,availability of capital, and capital and other expenditures. Actual resultscould differ materially due to a number of factors, including, withoutlimitation, operational risks in development, exploration and production; delaysor changes in plans with respect to exploration or development projects orcapital expenditures; the uncertainty of reserve and resource estimates, theuncertainty of estimates and projections in relation to production, risksaffecting the Company's ability to execute projects and market oil and naturalgas, risks inherent in operating in foreign jurisdictions, the ability toattract key personnel, and the inability to raise additional capital. Additionalassumptions and risks are set out in detail in the Company's Annual InformationForm, available on SEDAR at www.sedar.com, and the Company'sannual reports on Form 40-F or Form 20-F on file with the U.S. Securities andExchange Commission.
Although the Company believes that the expectations reflected in theforward-looking information or statements are reasonable, prospective investorsin the Company's securities should not place undue reliance on forward-lookingstatements because the Company can provide no assurance that such expectationswill prove to be correct. Forward-looking information and statements containedin this news release is as of the date of this news release and the Companyassumes no obligation to update or revise this forward-looking informationexcept as required by law.
FOR FURTHER INFORMATION PLEASE CONTACT:
Investor RelationsSonde Resources Corp.(403) 294-1411(403) 216-2374 (FAX)
OR
Suite 3200, 500 - 4th Avenue S.W.Sonde Resources Corp.Calgary, Alberta, Canada T2P 2V6www.sonderesources.com