2nd Jun 2015 07:14
LONDON (Alliance News) - Paternoster Resources PLC shares rose on Tuesday after it said it has entered into an agreement with an oil and gas investment company to jointly evaluate, acquire and develop oil and gas assets in North Africa, initially in Algeria.
Paternoster shares rose 13.8% to 0.228 pence per share on Tuesday morning.
The agreement with Littoral Oil and Gas Ltd has been signed after Littoral spent 12 months evaluating existing subsurface data over the areas where assets will now be sought in Algeria. Paternoster has incorporated a new company, to be known as Atlas Oil and Gas Ltd for the deal, with Paternoster to hold a 90% stake and Littoral 10%.
"This agreement is in line with Paternoster's strategy of investing to create companies that can acquire and secure material assets, and then progress as independent entities," said the company.
"Using Paternoster's corporate experience and Littoral's North African expertise, we will work together to acquire assets in known, hydrocarbon-producing basins," it added.
Paternoster said Algeria had been initially chosen because of the country's "stability, contract terms and excellent infrastructure", adding Atlas will focus on undeveloped discoveries and shut-in fields within proven petroleum basins, using technology to keep production costs down, with a quicker path to production and revenues.
The cost of assessing the assets prior to making an investment will be "minimal" and funded through existing resources.
"This is a great opportunity for Paternoster to get a foothold in the exciting North African oil sector, with partners who have a good deal of experience in the region," said Chairman Nicholas Lee.
"Through working with Littoral, Paternoster will be able to identify assets in North Africa at an early and low cost stage and then, as appropriate, position them to move rapidly up the valuation curve whether through public or private markets as the company has done with a number of its other investments," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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