Operations - Garmian Block
Commenced 3D seismic survey on November 1, 2012 over the Sarqala and Mil Qasim oil discoveries and the Zardi Complex prospect and 2D seismic survey over the Chwar prospect. 2D seismic acquisition is completed and the 3D seismic survey is over 75 percent completed.
On the Baram prospect, the data from the Kurdamir-2 well resulted in the total mean estimate of gross unrisked prospective resources to increase by over 300 percent to 423 million barrels of oil. The Company now interprets that the Baram prospect has the potential to contain the extension of the Kurdamir Oligocene oil leg into the Garmian Block.
The Baram-1 exploration well has the possibility of being the highest impact well in 2013 with the potential to add gross mean contingent oil equivalent resources of 200-300 million barrels in the Garmian Block and 500-600 million barrels in the Kurdamir Block.
Non-brokered private placement completed with Crest Energy International LLC ("Crest"), of Houston, USA, at Cdn $1.25 per share for gross proceeds of $63.75 million for a placement of 51 million common shares in the Company at a 25 percent premium to the March 8, 2013, closing price. Upon closing Crest holds approximately 19.8 percent of the issued and outstanding common shares. Crest obtained the right under the Investment Agreement to appoint an additional nominee to the Company's Board of Directors and has elected John Howland to that position. Eric Stoerr, an officer of Crest, has been a member of the Corporation's Board of Directors since August 2012.
Also entered into a loan agreement with Crest for US$57.5 million that incurs interest at 6 percent per annum to be repaid within 18 months in which the funding of the loan occurs.
Subsequent to the Crest private placement, the Company announced the finalized terms of a further private placement of common shares issued at C$1.25 per share for gross proceeds of US$13.9 million which is anticipated to close on April 4, 2013. Proceeds from the second private placement will be used to reduce the principal amount outstanding under the Crest loan.
2012 financial results consistent with an early-stage exploration company, with a net loss of $10.3 million, a solid financial position and a track record of conservative financial management.
Fully funded for planned activities in 2013, with $79.6 million working capital in place at the end of 2012 and the funds received from the subsequent financing.
Capital expenditures estimate for the fourth quarter of 2012, including the requirement for the Company to fund 50 percent of Garmian activities and 60 percent of Kurdamir activities were $31.2 million.
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