14th Oct 2014 08:07
LONDON (Alliance News) - Global Energy Development PLC Tuesday said it has agreed to sell the rights and obligations of its contract areas within the Llanos Basin for USD50 million in cash to a subsidiary of TSX-listed oil and gas exploration company Platino Energy Corp.
Global Energy Development shares were Tuesday quoted up 40% at 54.97 pence.
In a statement, the Latin America focused petroleum exploration, development and production company, which has operations in Columbia, said it will use part of the proceeds after the expenses of the deal will be used to eliminate its its outstanding debt balance of USD7.5 million. Global Energy Development said it will decide how to use the remaining net proceeds following the closing of the deal.
The USD50 million payment is to be adjusted upon closing in respect of any operating income received, or any capital expenditure spent, by Global Energy Development in respect of Colombia Energy Development Co, the subsidiary it is selling to Platino Energy Corp in order to effect the disposal of the Llanos Basin rights and obligations.
Colombia Energy Development Co holds only the assets and liabilities relating to the Llanos Assets, according to Global Energy Development, following the subsidiary's corporate restructuring completed earlier in the year.
Global Energy Development said the sale is in line with its policy of focusing its efforts on developing its oil reserves in the Bolivar block and the Bocachico block located in the Middle Magdalena basin. In March and May 2014, the company entered into farm-out agreements in respect of the Bolivar and Bocachico assets as part of that policy.
"Although the farm out agreements are intended to partially fund the near-term development plans for the Middle Magdalena properties, further exploration and development will require additional capital," Global Energy Development said.
By Samuel Agini; [email protected]; @samuelagini
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