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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (6558)	5/22/2014 8:27:53 AM
From: Goose94	Read Replies (2) \| Respond to of 202736

Rift Basin Resources (RIF.H-V) May 20, '14 has signed binding definitive agreements through its wholly owned subsidiary Petrodyn Holdings SA (Holdco) to acquire a direct 70-per-cent equity interest in PT Sinergi Wijaya Kusumah through a joint venture agreement for total consideration of $700,000 (U.S.), and finance and complete workovers of PT Sinergi's initial onshore multireservoir oil fields through a participation agreement with Grosco International Sdn. Bhd. PT Sinergi is the holder of a 100-per-cent interest under a technical service agreement to produce oil from the onshore Dandangilo and Beji oil fields containing 110 existing oil and gas wells, located in Kedewan subdistrict, Bojonegoro district, East Java province, Indonesia. The technical service agreement grants PT Sinergi special rights as an operator to produce oil from existing shut-in oil wells in the working area of the fields. PT Sinergi intends to complete, in accordance with the requirements of the underlying agreements, workovers on the fields' shut-in wells currently drilled into the Wonocolo formation, as well as complete exploration on deeper targets. Crude oil produced from the wells will be delivered to PT Pertamina EP's crude oil storage tank in Menggung, Cepu. The joint venture agreement serves to govern the operations of PT Sinergi between its shareholders to efficiently carry out certain minimum rights and obligations as operator of the fields. It has an initial term of 30 years and is extendable upon mutual agreement between the parties. Holdco's commitment to finance the joint venture agreement for the initial $1-million (U.S.) operating capital is fully financed by Grosco in accordance with the participation agreement's terms and conditions. Under the terms of the participation agreement, Grosco is required to advance minimum operating capital of $1.5-million (U.S.) to finance secondary and enhanced oil recovery (EOR) methods to develop the initial wells on the fields in compliance with the underlying contractual obligations with state oil company PT Pertamina EP. The objective is to maximize oil and gas production and profits, which will be shared by the company on a 50/50 pro rata basis with Grosco. Upon completion of the minimum work program, Grosco shall have earned a 50-per-cent participating interest in Holdco's 70-per-cent interest in the initial fields. PT Sinergi and Grosco are both arm's-length parties to Rift Basin, and no finders' fees are payable in connection with the joint venture agreement. The joint venture agreement is subject to applicable regulatory approval, including the approval of the TSX Venture Exchange and NEX, a separate board of the TSX-V. There can be no assurance that the transaction will be completed as proposed or at all. Commenting on the signing of the definitive agreements, Rift Basin chief executive officer Wayne Koshman commented: "With our first acquisition and a committed funding partner in place, our objective to develop a project with early cash flow is sharply in focus. We look forward to working with Grosco to advance the development of our first fields and to pursue additional opportunities in Southeast Asia." Grosco chief executive officer Hesham Fathi Mohamed Khalil added: "Southeast Asia offers a business-friendly environment for entrepreneurial efforts in a resource-rich setting. With a strong local partnership in place and access to exceptional oil and gas opportunities, we are ready to apply investment capital and technology to grow shareholder value, and look forward to a long and fruitful relationship with Rift Basin." Stock options The company has granted incentive stock options to certain Grosco consultants to purchase up to two million common shares of the company at a price of 10 cents per common share. The stock purchase options are exercisable on or before May 16, 2019, and vest in stages over the course of a year, with 25 per cent to vest immediately and a further 25 per cent of the options to vest in each three-month period thereafter. The stock options are being granted pursuant to the terms of the company's stock option plan and are subject to regulatory approval. About the participation agreement Upon commencement of commercial oil production from the fields' existing wells, the participation agreement specifies that Grosco will be entitled to priority recovery of its operating working capital advanced, on a 70/30 basis of the field profit, until full recovery. Upon Grosco achieving full recovery, Rift Basin will be entitled to 70 per cent of field profit until it has in turn recovered its operating working capital advanced, plus an additional $1-million (U.S.). Subsequent to the complete satisfaction of these recoupment conditions, the parties will proceed to jointly commercialize the fields' existing wells on a 50/50 pro rata basis. About Grosco Grosco is a Malaysian-based company with offices in Kuala Lumpur representing the interests of a group of Middle East investors seeking to acquire advanced oil and gas assets in Southeast Asia. Grosco is led by its managing director, Heshameldin (Hesham) Fathi Mohamed Khalil. Mr. Khalil has extensive Middle East and Malaysian large-project management experience, including positions as managing director of Algahanem Group (Tarek Algahamen-Kuwait), which had $4.5-billion (U.S.) turnover and completed inspection and surveillance on the Rawdten Field 134 platforms (2000); managing director of Snas Group (Sheikh Mohammed Rihan) with oversight for 14 operational companies (2005); managing director of Golden Group Heritage (Sheikh Saleh Al Monsor), which initiated and completed the $1.2-billion (U.S.) Arab City project in Malaga province, Malaysia; managing director of Arab Gulf Oilfield Equipments (AGC), which was the first United Arab Emirates company to win a drilling tender in Iraq after the war. In 2009, Mr. Khalil was listed as the 11th most important influential person in Malaysia (Oxford Business Grp). About the Dandangilo and Beji fields The fields have historic and current oil production. PT Sinergi holds the exclusive rights to the fields, which contain 110 existing wells within an 80-square-kilometre area, located in Kedewan subdistrict, Bojonegoro district, East Java province, Indonesia. The company has received 2-D seismic, well-log data, past production records and geological data in support of the opportunity, and will immediately commission a National Instrument 51-101 technical report. Approximately 15 kilometres to the south of the fields, ExxonMobil has discovered very substantial oil accumulations in the Kujung formation at its Banyu Urip Cepu block to a depth of approximately 1,700 metres. Public reports suggest the block will be producing over 35,000 barrels per day this year (the Rig Zone website) and is expected to produce 165,000 barrels per day once fully developed (the Platts website). The block is estimated to contain up to 600 million barrels (6.7 per cent of Indonesia's total reserves) and 1.7 trillion cubic feet of natural gas (The Geo ExPro website).