9th May 2014 09:27
LONDON (Alliance News) - San Leon Energy PLC Friday said it was continuing talks with TransAtlantic Petroleum PLC about the details of a proposed work programme on sites in Poland that the US-based company is farming in to, after TransAtlantic said Thursday that it had decided not to proceed with the full acquisition.
In late March, San Leon Energy said it has signed a farm-out deal under which TranAtlantic Petroleum Ltd will fund all of a six well programme on nine concessions in Poland, earning a 50% stake in the sites in Poland's Permian basin and becoming their operator. At that time, San Leon said the estimated value of the work programme was between USD60 million and USD70 million.
TransAtlantic was expected to pay USD5.0 million to San Leon as a contribution to back costs and a further USD5.0 million once a total of 150,000 barrels of oil equivalent have been sold.
The deal would have left TransAtlantic with a 50% interest in the concessions, San Leon with 37.5% and Hutton Energy with 12.5%.
"TransAtlantic is pursuing ongoing discussions with San Leon Energy PLC and Hutton Energy PLC about an acquisition of certain assets in Poland. However, after conducting geological and engineering due diligence on the original properties under consideration, TransAtlantic decided that it will not proceed with the full acquisition in Poland as previously described in its March 27, 2014 press release," the US company said Thursday.
"The company confirms that it is in continuing discussions with TransAtlantic over the details of the proposed work program to be completed following execution of the farm in agreement and will update the market once the final detailed work program has been agreed," San Leon said Friday.
San Leon shares were down 10.2% at 2.506 pence Friday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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