Griffiths Signs an Agreement for Mangara & Badila Fields

Source: www.gulfoilandgas.com 9/18/2012, Location: Africa

Griffiths Energy International Inc is pleased to announce it has signed a Heads of Terms Agreement with Glencore International plc for the development of the Mangara and Badila oil fields.

Under the terms of the Agreement, Glencore will earn 25% working interest in the Mangara and Badila Exclusive Exploitation Authorizations leaving Griffiths with working interest and Societe des Hydrocarbures du Tchad (“SHT”) with working interest. In consideration for the working interest in Mangara and Badila, Glencore will fund US$ 300 million of the Company’s working interest share of future joint venture expenditures in the Mangara and Badila oil fields up to a maximum of U $ 1 million per year (the “Carried Amount”). The effective date of the Agreement is July 1, 2012 (“Effective Date”). Under the terms of the EXA’s, the Company and Glencore are required to fund HT’s costs and are reim ursed through cost oil.

In addition, Glencore will acquire a 33.3% working interest in the Exclusive Exploration Authorizations, granted under each of the Company’s three production sharing contracts in the Republic of Chad (the “PSCs”). In consideration for the assignment of the working interest, Glencore will pay to the Company approximately US$ 31 million on closing representing 33.3% of the Company’s unrecoverable costs related to the three PSCs as of the Effective Date, subject to audit.

“This transaction, once closed, allows Griffiths to accelerate the development of the Mangara and Badila oil fields with a 2014 target exit rate of 50,000 bopd (gross). This Agreement, along with the recent capital raise of US$ 173.6 million and the expected cash flow from these fields, provides the required capital to fast track an aggressive exploration program in 13 and 14,” stated Gary Guidry, President and Chief Executive Officer.

Alex Beard, Director of Glencore’s Oil Commodity Department, commented: “We are pleased to announce our investment in the Republic of Chad. This is an exciting opportunity to work in a joint-venture with Griffiths and the Government of Chad to help fast track the development of a region with long term growth potential.”

The above transactions are subject to the Government of Chad approval, waiver of any pre-emption rights y the Company’s partner, and related definitive agreements based on the commercial terms in the Agreement. The transaction is expected to close within 90 days. 2


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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