22nd Dec 2005 07:01
Victoria Oil & Gas PLC22 December 2005 22 December 2005 Victoria Oil & Gas Plc West Medvezhye Acquisition Update • Acquisition of remaining shares in ZAO SeverGas-Invest, bringing ownership of West Medvezhye gas and condensate licence to 100% • Total acquisition price of US$3.2 million cash, 1.23 million ordinary shares in Victoria and waiver of outstanding claim of US$2.6 million Victoria Oil & Gas Plc ("Victoria") (ticker: VOG), the AIM-quoted oil and gascompany operating in the Former Soviet Union, today announces that it hascompleted the process begun in early 2005 for the acquisition of the remaining25.2% of ZAO SeverGas-Invest ("SGI"), the owner of the West Medvezhye gas andgas condensate licence in Western Siberia, to bring its total shareholding to100%. Victoria announced on 17 May 2005 that it had agreed commercial terms to acquirea further 15.2% but it subsequently discovered a problem with the vendors' titleand suspended the proposed acquisition. Negotiations have continued and now,having resolved the title issues, Victoria has agreed to proceed with thetransaction and has further agreed to increase the purchase to cover the entireminority interest. The consideration for the acquisition is to be satisfied by US$3.2 million cash,the issue of 1,230,000 new ordinary shares in Victoria, the waiver of Victoria'soutstanding claim of US$2.6 million against the vendors of the 74.8% of SGIacquired in November, 2004 and release of 1,855,000 shares from escrow. A totalof 3,734,314 shares, are to be held in escrow until 30 April 2006 in support ofwarranties that have been given by the vendors. A recent report by independent reservoir auditors DeGolyer & MacNaughtonestimated an expected recoverable gas resource for the field surrounding thefirst exploration well at West Medvezhye of half a trillion cubic feet of gas. Chairman Kevin Foo said today "I am very pleased that we have been able toachieve a breakthrough and bring these negotiations to a conclusion. This willallow our shareholders to enjoy the benefits of 100% ownership of our excitingdiscovery at West Medvezhye." For further information please contact:Kevin Foo / George Donne Jamie Cumming / Tracy MackenzieVictoria Oil & Gas Plc Bell Lawrie+44 (0)207 921 8820 +44 (0)141 314 8103 +44 (0)141 314 8220Laurence Read/ Leesa PetersConduit PR+44 (0)207 429 6605+44 (0)7979 955 923 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
VOG.L