Valiant Petroleum plc has entered into an Asset Purchase Agreement with Rocksource ASA (“Rocksource”) to take stakes in substantially all of Rocksource’s licenses on the Norwegian Continental Shelf (“NCS”) for a total post-tax effect consideration of NOK 104 million (18.13 million U.S. dollars)
The Transaction will add to Valiant’s existing acreage position in Norway including:
· Interests in an additional 12 NCS licences in the Norwegian North Sea, Mid Norway and the Barents Sea;
· A 13% stake in the large Norvarg gas discovery made in the Barents Sea during 2011, estimated by the operator (Total) to have gross resources between 60 and 300 mmboe; and
· Up to three NCS wells planned during 2013, including a high impact appraisal well on Norvarg during the year using the Leiv Eiriksson rig, pending formal decision by the joint venture partners.
The Transaction provides for an initial cash payment of NOK 60 million plus a carry of up to NOK 200 million of Rocksource’s exploration costs on its retained interests. The benefit of the Norwegian tax refund on the carried element of the consideration, reclaimed at 78% in the year following the expenditure, will accrue to Valiant in addition to the tax refund on any of its own exploration costs on the licences.
The Transaction grows Valiant’s presence across a range of acreage and plays in Norway operated by major companies without any significant increase in G&A expenditure. The Transaction follows on from Valiant’s successful entry into Norway during 2011 through its acquisition of Sagex Petroleum ASA and first operated license award in the NCS during the recent APA 2011 Round. A full list of the acquired licenses can be found at the bottom of this release.
Peter Buchanan, CEO, commented:
“Norway represents an exciting opportunity for Valiant, and we are delighted to be able to build so soon upon the platform created by our strategic acquisition of Sagex last summer. The transaction with Rocksource gives us access to a range of exciting acreage with excellent operators and a meaningful stake in the potentially large Norvarg gas discovery. We look forward to working together with our new partners and further deploying Valiant’s expertise on the NCS.”
Source: Valiant Petroleum, March 20, 2012