29th Jan 2015 08:49
LONDON (Alliance News) - Shares in Red Emperor Resources NL dropped heavily in early trade on Thursday after the company said it is shutting down its Puntland joint venture in Somalia.
Shares in the company dropped 23% to 1.45 pence, one of the worst performers in the AIM All-Share, after it said its joint venture for the Puntland licences in Somalia had withdrawn from the project.
The decision follows negotiations held between the Somalian government and states in the country, including Puntland, over revisions to the country's hydrocarbon laws, particularly as regards revenue-sharing legislation.
In September, Red Emperor had warned the talks were "delicate" and also noted that though it had received verbal confirmation that its joint venture in the country had valid rights over the licences, it had not received written confirmation.
It said the joint venture, which held an interest in two licences in the country, is in the process of closing down its office. All contracts will be terminated, with the exception of the production sharing agreements, it said. All remaining inventory in Puntland is to be disposed of or sold.
Meanwhile, the group said work on its interests in Georgia is progressing, with Strait Oil & Gas stepping up preparations for the drilling programme at the Block Vlb prospect.
By Sam Unsted; [email protected]; @SamUAtAlliance
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