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Statoil to Withdraw from PetroFrontier's Georgina Permits

Source: www.gulfoilandgas.com 11/14/2014, Location: Not categorized

Baraka Energy & Resources has advised that Statoil Australia Theta has informed Baraka that it has concluded the drilling and testing campaign on the Company’s permits, EP127 and EP128 in the Georgina Basin, Northern Territory, Australia, and based on the disappointing results, Statoil has decided to withdraw from any further activity on these permits. Baraka expects to receive a formal notice from Statoil regarding this in the very near future. Baraka has not yet been informed by PetroFrontier Corp or Statoil as to whether Statoil also intends to withdraw from any further activity on Petrofrontiers adjoining permits EP103 and EP104 and will pursue this with PetroFrontier immediately.

It is unclear as to whether Statoil will continue as Operator of Baraka’s permits and indeed of the permits EP103 and EP104 adjoining Baraka’s permits, or whether PetroFrontier will once again become Operator of all the permits. Baraka will be seeking clarification of all of these issues in the immediate future and will keep the market informed.

Whilst this is disappointing news from the perspective of Statoil withdrawing, Baraka has nevertheless been approached by a Canadian Group interested in pursuing exploration on the Conventional targets within EP127, and this will form part of the communications Baraka intends to seek with both Statoil and PetroFrontier in the near future. Baraka shareholders will recall that Baraka’s board pressed for these conventional targets to be considered in the 2014 work program, but were unsuccessful at that time.

Baraka’s final working interest on each permit is yet to be resolved as a result of dilution as previously announced to the market and this will also be subject to discussions with Statoil. Importantly, all minimum expenditures required on EP127 and EP128 permits for the 2015 year have been met and any further exploration on these areas will now be subject to discussions with the joint venture partners and regulator, including the offer of exploration by the Canadian Group to pursue conventional oil and gas targets within EP127.

Baraka has been in discussions on a number of different fronts and especially in regards to new projects, which includes distressed oil and gas permits in an unlisted Australian company in Texas and these discussions are ongoing but incomplete. Baraka is debt free, and as announced in its latest quarterly activity report, has some $4.69m of net current assets including cash, and as such is well placed to take advantage of any opportunity that arises in the near future as a result of the current market conditions, especially distressed assets.

In relation to the above, PetroFrontier made the following short announcement:
PetroFrontier Corp has received a notice from Statoil Australia Theta indicating that expenditures in excess of US$50 million have been incurred under the Amended and Restated Farmin Agreement, thus fully satisfying all of Statoil's Phase 2A commitments thereunder. Statoil is not expected to perform additional exploration expenditures beyond the approved 2014 Work Program and Budget and PetroFrontier anticipates receiving a notice from Statoil in due course that it will not be proceeding to Phase 2B in accordance with the Amended Farmin Agreement.

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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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