President Energy said Nov. 28 it has completed the acquisition of its interests in the Las Bases and Puesto Prado Concessions, Rio Negro Province, Argentina (President operator and 90%, EDHIPSA 10%).
The acquisition of the new concessions from the Rio Negro Province has now been completed and paid for with the relevant provincial decrees having been issued formally awarding the new concessions to President. The province has granted President 90% operating interests over the new concessions, which have a 10-year term. President is pleased to partner with EDHIPSA, the Provincial energy company, who will hold a 10% interest. The 10 year terms are renewable.
The purchase price of the new concessions is $9.9 million in aggregate of which $8.7 million was paid to the province on Nov. 27 and the balance will be paid in 12 months’ time utilizing operational cash flow. The initial consideration has been partly financed through an additional $4 million of secured term loan bank facility and an additional $4 million unsecured loan made to the company by the company’s existing lender IYA Ltd. under the terms of President’s current line of credit facility with IYA. The balance of the initial consideration was paid out of the company's own cash flow.