26th Jun 2015 08:21
LONDON (Alliance News) - Red Rock Resources PLC Friday said it has entered into an option agreement for shares in West African oil and gas exploration company Elephant Oil Ltd.
Shares in Red Rock were trading up 12% at 0.0670 pence Friday morning.
The option, which is exercisable within seven days, allows Red Rock to subscribe for 1.1 million shares in Elephant Oil at 25.3 pence each, for an aggregate consideration of GBP275,000. It also includes the right to invest an additional GBP412,000 at the same price per share within a six month period.
Elephant Oil holds a 100% interest in the production-sharing contract on Block B, onshore Benin, on West Africa's oil province the West African transform margin. The block covers 4,500 square kilometres, which is approximately two-thirds of the coastal basin, Red Rock said, adding that Elephant Oil has started preparations for a new 2D seismic acquisition programme that will be used to define a drillable prospect for the first exploration well onshore in Benin.
According to Red Rock, Elephant Oil's strategy is to build a portfolio of low-risk and low-cost early-stage exploration assets onshore in West Africa, and is in advanced negotiations to acquire licence interests in other countries.
As at January 31, 2014, Elephant Oil had total assets of GBP1.6 million and made a loss of GBP46,668 for that year.
"Having finished the first stage of change at Red Rock by repayment of debt, by disposals, and by other actions, this begins the second stage. We have with our Ivory Coast investment focused on the emerging and neglected potential of some countries in Francophone West Africa, and this option to invest in Elephant potentially allies us with a like-minded company which has worked diligently to establish an early presence. Elephant has acquired, and is working on the acquisition of, onshore oil projects in West Africa," Chairman Andrew Bell said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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