Avanti Energy (
TSX: V.AVN,
Stock Forum) made tremendous headway in its bid to acquire CMI Energia SpA when the company announced today that it had amended the terms of its previously announced purchase and sale agreement with Dove Energy B.V.
According to the
news release, the revised terms enabled the company to leverage CMI assets to finance the acquisition and secure a carried interest through the field development permitting,
CMI owns a 90% interest in a natural gas permit encompassing 35.72 square kilometres onshore in Central Italy, including an application for the conversion of the natural gas discovery in the permit into an exploitation concession.
The permit area contains two new wells, on top of older wells, that have fully delineated the field limits and reserves, with the two new wells testing combined production levels in excess of 20,000 Mcf/d or 3,333 boe/d.
The acquisition will be facilitated with a combination of shares and cash with the company picking up CMI’s assets for US$1.53 million and 12.97 million common shares valued at $0.30 per share. Dove will still retain 15% working interest in the project.
At close, the company has arranged for a syndicate of investors to purchase a 41.66% working interest in the project for US$1.43 million, plus a commitment of US$1.3 million to finance the 2015 operating budget for the project.
As a result of the transaction, CMI will be owned by Avanti. CMI will also remain operator of the project and will retain a 33.33% working interest in the project – carried through the expected costs of permitting.
Company CEO, John McIntyre, commented, “Italy has a long history of oil and gas production and with recent legislative changes to encourage industry investment, now is the perfect time to enter the market. Avanti is very excited about applying its operating skills to what will be the second largest onshore gas development project in Italy in the past twenty years. Avanti looks forward to working closely with local, regional, and national stakeholders to develop the field using state of the art technology, while creating meaningful and sustained economic benefit. We expect Italy to remain a high value gas market over the next decade, given the potential for supply disruptions from North Africa or Russia.”
Avanti Energy was in the news recently when
the Vancouver-based company announced it would alter articles to include an advance notice provision back at the beginning of February.
Shares were down 8.70% on the news to $0.315 per share.
Currently there are 47.1m outstanding shares with a market cap of $14.8 million.