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Extension of Contract to Acquire Turkish Oil and Gas Production Companies

Source: 10/11/2016, Location: Europe

Park Place Energy Inc. (PKPL) previously announced it had entered into an agreement to purchase three oil and gas exploration and production companies operating in Turkey. The "Tiway Companies" own interests in three producing oil and gas fields, one offshore and two onshore.

The Company and the seller have now agreed to extend the purchase contract up to December 15, 2016. The Company has initiated a private placement to raise the funds to complete the purchase; it is anticipated the private placement will close in the next 20-30 days. The purchase price of the acquisition is $2.1 million. Park Place paid a deposit of $500,000 when the agreement was signed. The effective date of the purchase is January 1, 2016.

Closing of the transaction is conditional on Park Place obtaining approvals from two Turkish regulatory agencies. One of the approvals has been received; the other approval is pending. Park Place expects to close the acquisition following receipt of the second approval. The Company believes the delay in obtaining the second approval is attributed, in part or in whole, to the Turkish Government declared State of Emergency which expires later this month. However, recent public announcements suggest the State of Emergency will be extended another three months into January 2017.

The Tiway Companies report that year to date, production has averaged 414 BOE/D (barrels of oil equivalent per day). Approximately 75% of the production is gas (selling now at about $6.50 per mcf) and 25% of the production is oil (selling at a slight discount to Brent).

The Company's focus in the acquisition is the offshore gas field called the South Akcakoca Sub-Basin located in the Black Sea where the Tiway Companies own a 36.75% working interest. Based on the large amount of research and investigation of the field, the Company believes there are substantial behind pipe reserves which can be accessed through a low cost work program. It is anticipated such work program will dramatically improve production. The Tiway Companies, with input from the Company, have been working with the operator to develop plans to commence this work program later this year.

Additionally, the Company has identified a number of proved undeveloped locations in the offshore gas field which can be drilled from the four existing production platforms. Accordingly, the Company believes there is the potential to produce substantial additional volumes of gas through the existing infrastructure.

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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  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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