Dominion Petroleum’s Shareholders Reject Maltese Farm-Out Deal

Shareholders of Dominion Petroleum on Monday rejected a $50 million placing in a Maltese farm-out deal with Mediterranean Oil and Gas and the two companies are now discussing how to proceed with the deal.

MOG in June signed an agreement to farm out a 75% operated working interest in a production sharing contract for four blocks offshore Malta to Dominion.

The farm-out deal was conditional on the $50 million fundraiser by Dominion, but this was rejected by the company’s shareholders on Monday.

The proposed placing secured 63.5% of the vote at Monday’s general meeting, falling just short of the 66% threshold needed to complete the funding.

Dominion said then that it would proceed with farm-out discussions as planned, adding that it had the money to cover its existing obligations.

The farm-out deal covered Blocks 4, 5, 6 and 7 of Area 4 offshore Malta, situated north of Libya.

Independent assessments suggest prospects at Area 4 have gross recoverable un-risked prospective oil resources of 115 million barrels of oil with an 18% chance of success.

MOG holds a 90% operated working interest through PEL under a Maltese production sharing contract, with Leni Gas & Oil Investments Limited holding the remaining 10% of working interest.

The first exploration period for the prospects runs until January 2013 with a minimum spend requirement of $5 million.

MOG anticipates that the 3D seismic survey will cost between approximately $8 million and $10 million gross to undertake, which would satisfy the minimum spend requirement.

Dominion has previously said that it planned to use a big chunk of the placing proceeds, $12 million, on exploration and development in Malta.

Source: The Malta Independent

Source: The Malta Independent, July 27, 2011;

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