Pan Orient Energy Corp. has entered an agreement to sell its 50% equity interest in subsidiary Pan Orient Energy (Siam) Ltd. to a wholly owned subsidiary of Sea Oil Public Co. Ltd. of Bangkok, Thailand, for $42.5 million, including a working capital adjustment of $2.4 million, a news release said.
Pan Orient Energy (Siam) Ltd. holds Pan Orient's 100% interest in Concession L53/48 in Thailand and will remain as the operator.
The transaction is anticipated to close on or about Jan. 12, 2015. The sale and purchase agreement contains customary representations, warranties, covenants and indemnities in favor of Sea Oil. Closing is subject to Sea Oil shareholder approval at a meeting scheduled for Dec. 17, 2014, financing, certain regulatory and other third party approvals and waivers, as well as other customary closing conditions, the release said. A $4 million break fee is payable by Sea Oil if shareholder approval or financing is not obtained. It is anticipated that net proceeds to Pan Orient, after closing adjustments, a 3% finder's fee, tax and other costs, will be approximately $40.9 million.
A two appraisal well and one exploration well drilling program in Concession L53/48 is expected to commence shortly after closing in January 2015, according to the release.
“In addition to the sale of a 50% interest in the Thailand L53/48 asset announced today, the company has also entered into exclusive negotiations and made significant progress towards the signing of farm-out agreements for the East Jabung production-sharing contract (PSC) and Batu Gajah PSC in Indonesia and hopes to finalize these negotiations in November,” Pan Orient President and CEO Jeff Chisholm said in the release. “The company has also been actively engaged with a third party working towards concluding a farm-in agreement on the Citarum PSC in Indonesia.”
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