Transeuro Energy Corp.: Proposed Resolution of Ukraine Joint Venture
Dispute 9/1/2009 10:27:41 AM – Market Wire
VANCOUVER, BRITISH COLUMBIA, Sep 1, 2009 (Marketwire via COMTEX News
Network) —
Transeuro Energy Corp. ("Transeuro" or the "Company") (TSX
VENTURE:TSU)(OSLO:TSU) announces that the Company has signed a Term
Sheet with Rohol-Aufsuchungs Aktiengesellschaft ("RAG") based on which
the parties plan to finalize binding agreements to settle the dispute
pertaining to the purported withdrawal by RAG from the joint venture
company ‘Scythian Energy BV’. The Term Sheet states that the final
settlement will be based on:
– The global mutual release from all accrued rights and obligations
with regards to the joint venture operations in Ukraine, including the
claim raised by RAG for repayment of USD 13,473,403 plus interest and
Transeuro’s potential counterclaim for costs, losses and damages.
– The transfer of RAG’s 50% shareholding in Scythian Energy BV to
Transeuro immediately upon entering into the Settlement Agreement for
no or nominal consideration.
– The granting by Transeuro to RAG of a call option for 12.5% of the
shares in Scythian Energy BV (the "Call Option"). The call option is
valid until Scythian Energy and its subsidiaries have invested a
further USD 70 million.
– Adjournment of the ICC arbitration proceedings during the validity
period of the term sheet, the negotiation of the full settlement
agreement (the "Settlement Agreement") and termination of the ICC
arbitration proceedings immediately after transfer of the Scythian
shares.
– At any time prior to the exercise of the Call Option by RAG,
Transeuro shall be entitled to buy back RAG’s Call Option for the
purchase price of USD 13,473,403 plus interest calculated at 12
months’ USD LIBOR + 3.5%.
– The call option shall be backed by a pledge by Transeuro on 12.5% of
Scythian Energy shares in favour of RAG. Transeuro shall be entitled
to divest, pledge and/or mortgage up to 87.5% of the shares in
Scythian Energy BV to any third party(ies)
investor or financing entity) without requiring any prior approval
from RAG and on such terms as may be negotiated by Transeuro with such
third party(ies) at its sole and unfettered discretion.
– This Term Sheet is valid for a period of thirty (30) days from 20th
August 2009. During the validity period, the parties shall make their
best endeavours to (i) finalize a Settlement Agreement (ii) draft the
Shareholder Agreement and (iii) transfer 50% of RAG’s shares in
Scythian Energy BV to Transeuro.
In addition the Company has agreed with the Ukraine government to
complete the process for renewing both the Karlavskoye and Povorotnoye
licenses for ‘Exploration and Pilot Production’. The licenses will be
re-issued to the local joint venture partner ‘Crymgeologia’ with whom
Transeuro holds Joint Activity Agreements. Initial payments have been
made towards each license renewal and the Company expects to receive
the final license in due course over the next few months.
The Company has retained ‘Integra Group’ ()
to inspect the ‘Uralmash’ type drilling unit provided by Crymgeologia
and to advice on the necessary rig upgrades required to complete the
sidetrack of the Karlavskoye 101 well. Integra Group are the new
owners of ‘Uralmash’ and are best placed to assess the rig condition
and to supply the necessary compatible equipment.
Given the difficulties experienced by many international companies
within the Ukraine E&P sector the Company has initiated an overall
review of the Ukraine Business Opportunity to be conducted by
AGR/Tracs (). The review will include an assessment
of the operating environment in Ukraine with particular emphasis on
the Joint Activity Agreement relationship with Crymgeologia; the legal
and regulatory framework governing industry activity; the potential
value of the Karlavskoye and Povorotnoye fields with particular
emphasis on the gas sales market and recommendations on how best to
resume activities. The report will be released to investors around
orrall, Transeuro President & CEO, commented, "RAG’s decision to
retain an interest in Scythian Energy emphasizes the underlying
potential of our Ukraine assets and supports our position that we can
progress operations through to a successful conclusion. We remain
aware of the challenges of operating in Ukraine and have initiated a
number of reviews to gain an objective assessment of the environment
that will assist us in deciding our way forward.."
Transeuro Energy Corp. is involved in the acquisition of petroleum and
natural gas rights, the exploration for, and development and
production of crude oil, condensate and natural gas. The Company’s
properties are located in Canada, Armenia, and Ukraine. In addition,
the Company owns shares in Eaglewood Energy Inc. and holds a back-in
option.
On behalf of the Board of Directors
Aage Thoen, Chairman
The statements contained in this release that are not historical facts
are forward-looking statements, which involve risks and uncertainties
that could cause actual results to differ materially from the targeted
results. The Company relies upon litigation protection for forward
looking statements.
SOURCE: Transeuro Energy Corp.
Transeuro Energy Corp. David Parry SVP +1 604 681-3939 Transeuro
Energy Corp. Karen Jenssen IR +47 91 729787
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