Category: Amira

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Petrel Resources takes €4.1m Impairment on Iraq

By John Lee.

Irish-based Petrel Resources has taken a €4.1 million impairment of its investment in Iraq:

“In August 2013, Petrel did a deal with Amira in Iraq whereby, for US$500,000 in cash plus 18,947,368 initial consideration shares (which were to be locked-in until spudding of the first oil well by our partners), Petrel acquired a 5% full free carry in Amira’s activities in the Wasit province in Iraq which was then, and still is, a relatively stable Shia dominated province. 

“The expectation was that provinces in Iraq would offer licences in their own right rather than solely through the central government in Baghdad.  This did not happen.  In fact, nothing happened.  As mentioned above, we have therefore impaired our investment.“

However, the company said it remains interested in oil opportunities in Iraq:

“Iraq remains one of the very best oil provinces in the world.  The oil exploration potential is outstanding.  The improving political situation in Iraq has resulted in Petrel re-awakening an interest.  We have been there since 1999 and like the country. 

“We are discussing with Amira, our partner, how best to declare an interest in certain fields.  We are also re-establishing contacts in the administration.  It is very early days, but it does look as if Iraq is slowly re-opening for business, and we want to be there.“

(Source: Petrel Resources)

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Petrel Resources Shares Slump following Iraq Settlement

By John Lee.

Shares in Irish-based Petrel Resources were trading 20 percent down on Friday after the company said it had reached a settlement in respect of the disposal of 2.2 million Petrel shares by Amira Petroleum‘s advisers notwithstanding a lock-in agreement entered into on 19 August 2013.

According to the company:

 On 14 August 2013, the Company announced that it had agreed to acquire from Amira Petroleum N.V. (“Amira Petroleum”) a 20 per cent shareholding in Amira Hydrocarbons Wasit B.V. (“Amira”), the holder of a 25 per cent carried interest in certain oil and gas exploration and production licences in the Wasit Province of Iraq.

The consideration for the acquisition included the issue of 18,947,368 shares in Petrel (representing 19.82 per cent of the enlarged issued share capital of Petrel (“the Initial Consideration Shares”). The Initial Consideration Shares were agreed to be locked-in until the date of spudding the first conventional oil well in respect of Amira’s interest in the Wasit province (the “Spudding Date”) but that, if the Spudding Date had not occurred by 19 August 2018, Petrel could, amongst other things, elect to re-acquire the Initial Consideration Shares for a nominal amount.

As part of the agreement with Amira Petroleum, 2.8 million of the Initial Consideration Shares were, at the direction of Amira Petroleum, issued to its advisers in satisfaction of fees payable by Amira Petroleum (“the Adviser Shares”) and were subject to a lock in agreement as detailed above.

As of the date of this announcement, the Spudding Date has not occurred.

During December 2017, Petrel learnt that 2.2 million of the Adviser Shares had been sold between March and July 2017, notwithstanding the lock-in agreement.

The parties have reached a settlement and agreed that the vendors of the 2.2 million Adviser Shares shall make a payment of £100,000 to the Company (representing approximately 4.5p per Adviser Share sold).  The remaining Adviser Shares shall remain subject to the lock-in agreed in 2013.

This announcement contains inside information for the purposes of Article 7 of EU Market Abuse Regulation 596/2014.

(Sources: Petrel Resources, Google Finance)