American International Petroleum Completes Acquisition of 25% Minority Interest in Proved Reserves in Russia
NEW YORK--(BUSINESS WIRE)--Dec. 14, 1998--American International Petroleum Corporation (Nasdaq NMS:AIPN) today announced it has completed acquisition of a 25% interest in Zao Nafta ("ZN"), a Russian oil and gas exploration and production company.
ZN owns 17 oil and gas licenses in the Samara and Saratov regions of European Russia covering 877,000 acres. Total recoverable oil reserves of the licenses, based upon Russian government estimates, is about 200 million barrels, of which 33.5 million barrels are proven reserves and 167.5 million barrels are probable reserves. As a consequence of a default by ZN in the exclusive option purchase agreement signed between the Company and ZN on March 18, 1998, the Company paid only $300,000 in cash for its 25% interest instead of $11 million for a 75% interest in ZN as provided by the option agreement.
Because the dispute between the Company and the principal owner of ZN since July 1998, the Company has had no access to any of ZN's technical or operational data. The Company will now resume its review and initiate an audit of all ZN activities.
Discussions are in progress to structure an acquisition for a controlling interest in certain of the above ZN license areas where, given the present conditions in Russia, an expeditious program for commercial development may be implemented.
American International Petroleum Corporation is a diversified petroleum company which, through various wholly owned subsidiaries, is involved in oil and gas exploration and development in Kazakhstan, and in refining, marketing and transportation of petroleum products in the United States.
Statements herein may be identified as forward-looking for purposes of safe harbor provisions under Section 21E of the SEC Act of 1934. Such statements relating to the Company's future business are subject to risks and uncertainties that could cause actual results to differ materially from those statements, and other risks and factors, identified in the Company's SEC filings.
Due to the uncertainties of Zao Nafta honoring its obligations under the default clause in the option agreement, the Company did not feel it was prudent to incur additional expenses to update its due diligence since July 1998 when it was seeking to acquire a majority interest in Zao Nafta under terms of the option agreement.
CONTACT:
American International Petroleum, New York
Michael Dodge, 212/688-3333
www.aipcorp.com
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