5th Oct 2009 13:22
LENI GAS & OIL Plc
("LGO" or "The Company")
5 October, 2009
Hungary Investment Update
Leni Gas & Oil plc (LGO) the AIM listed international oil and gas exploration, development and production company announces the resolution of a dispute with Ascent Resources plc ("AST") regarding the Company's investment in ZalaGasCo Kft (LGO 14.54%), and the announcement by AST on 06 July 2009 regarding the venture between MOL Hungarian Oil & Gas ("MOL") and Ascent Hungary Limited ("AHL").
ZalaGasCo Kft ("ZGC") operates a joint development agreement with MOL for the development of petroleum licences in western Hungary with AST as majority owner and operator of the ZGC. AHL participates in a joint venture with MOL in an area covering 88 square kilometres in south western Hungary, which includes both the Lovászi and Ujfalu oil and gas fields.
Under terms of the dispute settlement agreement LGO shall have an option to become a 14.54% shareholder in a joint venture with AHL subject to LGO conducting technical and commercial due diligence on the venture and paying its pro-rata share of all reasonable costs to date as well as outstanding sums owing to ZGC and a one off payment of €65,000. Should LGO decide not to proceed with involvement in the venture by 28 October 2009, apart from the payment of outstanding sums due to ZGC, there shall be no further liability between AST and LGO regarding AHL.
LGO and AST have also agreed to convene a ZGC operating committee meeting before the end of October 2009 to decide the future options for the Bajcsa gasfield re-development project.
LGO shall announce its future involvement with AHL and ZGC subsequent to completion of the AHL due diligence and ZGC meetings.
David Lenigas, Executive Chairman, commented:
"LGO is very satisfied with the dispute settlement with Ascent Resources. The Company has secured an option to participate in the new venture with MOL, and a forward plan to maximise the value of the current ZalaGasCo venture."
Competent Person's Statement:
The technical information contained in this announcement has been reviewed and approved by Fraser S Pritchard, Executive Director for Leni Gas & Oil Plc (member of the SPE) who has over 20 years relevant experience in the oil industry.
Enquiries:
Leni Gas & Oil plc
David Lenigas / Fraser Pritchard
Tel +44 (0) 20 7016 5101
Beaumont Cornish Limited
Roland Cornish / Rosalind Hill Abrahams
Tel +44 (0) 20 7628 3396
Mirabaud Securities Limited
Rory Scott
Tel +44 (0) 20 7878 3360
Pelham PR
Mark Antelme / Henry Lerwill
Tel + 44 (0)20 3178 6242
NOTES TO EDITORS
Leni Gas & Oil Plc is an international oil and gas exploration, development and production company headquartered in London, trading on the London Stock Exchange's AIM index. LGO's strategy is to acquire projects and businesses within the oil and gas sector that contain a development premium which can be unlocked through a combination of financial, commercial, and technical expertise.
LGO operates a low risk portfolio of production expansion assets in the US Gulf of Mexico, Spain, Trinidad, Hungary and Malta with significant play upside using similar strategies to leverage technologies and proven production enhancement techniques. LGO specifically targets near term production with upside exploitation potential and manages its portfolio to ensure all assets have accelerated incremental reserves and production enhancement programs.
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