CALGARY, March 8, 2013 /CNW/ -Canadian Overseas Petroleum Limited ("COPL" or "the Company") (TSX-V:
XOP), and its wholly owned subsidiary, Canadian Overseas Petroleum
Bermuda Limited ("COPL Bermuda"), is pleased to announce that a
Restated and Amended Production Sharing Contract ("PSC") for Block
LB-13 offshore Liberia has been agreed with ExxonMobil Exploration and
Production Liberia Limited ("ExxonMobil") and the National Oil Company
of Liberia ("NOCAL"). The President of Liberia, Mrs. Ellen Johnson
Sirleaf, has approved and signed the appropriate paperwork related to
the PSC so that it can be sent to the Liberian Legislature for a
ratification vote. The terms of the PSC will take effect once
ratification has occurred and the PSC is enacted into law. Completion
of the transactions contemplated is expected to occur shortly after
ratification and remain subject to a number of conditions.
In addition, certain terms of the previously announced purchase
agreements between COPL, COPL Bermuda, and Peppercoast Petroleum plc
("Peppercoast"), and between COPL Bermuda and ExxonMobil have been
amended. COPL Bermuda and ExxonMobil have amended the Asset Purchase
Agreement announced November 16, 2011 such that COPL Bermuda will now
have a 20% working interest in Block LB-13 and ExxonMobil as operator
will have an 80% working interest. ExxonMobil will continue to pay COPL
Bermuda's working interest portion of drilling expenses for the first
$120 million of gross drilling costs committed under the PSC, and COPL
Bermuda's share of joint venture costs up to the completion of those
operations. As part of the new arrangements, the payment terms as
between COPL Bermuda and Peppercoast have also changed from the
agreement announced in May 2011.
The new arrangements call for the completion of the acquisition of the
original Production Sharing Contract by COPL Bermuda to be funded by
NOCAL such that NOCAL shall pay the obligations of COPL Bermuda to
Peppercoast. Following that transfer, the ExxonMobil affiliate will
pay to NOCAL (1) all funds previously owed to COPL Bermuda under the
Asset Purchase Agreement, and (2) on behalf of COPL Bermuda and the
ExxonMobil affiliate, all amounts owed by COPL Bermuda and the
ExxonMobil affiliate to the Government of Liberia on account of the
issuance of the PSC. Upon that payment, the PSC shall be owned 20% by
COPL Bermuda and 80% by the ExxonMobil affiliate. All payments will
follow the approval by the Legislature of the Republic of Liberia of
these arrangements to assure transparency and compliance with law.
As a result of these changes, COPL will no longer issue any shares to
Peppercoast to complete the transaction. Further, other than legal
costs, usual closing costs and on-going fees under the PSC, COPL and
COPL Bermuda will have no net cash outlay or cost in connection with
the closings other than forgiveness of accounts receivable related to
the $15 million 3D seismic license fee owing by Peppercoast to COPL and
other inter-company amounts and $7 million of fees payable to the
Government of Liberia.
Mr. Arthur Millholland, President and CEO of COPL commented, "We are very pleased to have been able to reach agreement with
representatives from the Government of Liberia, NOCAL and ExxonMobil
for an amended PSC for Block LB-13, and believe that this represents a
great opportunity for our shareholders and the citizens of Liberia.
The revised Sale and Purchase Agreement with Peppercoast and the
revised Asset Purchase Agreement with ExxonMobil provide a low risk
method for our involvement in Block LB-13. We look forward to working
with ExxonMobil to begin planning exploration activities offshore
Liberia."
About the Company
COPL is an oil and gas exploration company focused on oil prospects in
the offshore West African continental margin and shale oil prospects
onshore New Zealand. COPL's Common Shares are listed under the symbol
"XOP" on the TSX Venture Exchange.
Forward Looking Statements
This press release may contain forward-looking statements based on
COPL's current expectations and assumptions as to a number of factors
including weather, regulatory approvals and general economic and
industry conditions. If those expectations and assumptions prove to be
incorrect, or factors change, then actual results could differ
materially from the forward-looking statements contained in this press
release.
Generally, statements included in this press release that address
activities, events or developments that COPL expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Such forward-looking statements involve substantial known
and unknown risks and uncertainties, certain of which are beyond COPL's
control, including: the fact that the completion of the transactions
with Peppercoast and ExxonMobil are subject to conditions that may not
be satisfied or waived, the impact of general economic conditions in
the areas in which COPL operates, civil unrest, industry conditions,
changes in laws and regulations including the adoption of new
environmental laws and regulations and changes in how they are
interpreted and enforced, increased competition, the lack of
availability of qualified personnel or management, fluctuations in
commodity prices, foreign exchange or interest rates, stock market
volatility and obtaining required approvals of regulatory authorities.
In addition there are risks and uncertainties associated with the oil
and gas industry, therefore COPL's actual results, performance or
achievement could differ materially from those expressed in, or implied
by, these forward-looking statements will transpire or occur, or if any
of them do so, what benefits, including the amounts of proceeds, which
COPL will derive therefrom. Such statements are based on assumptions
made by COPL based on its experience perception of historical trends,
current conditions, expected future developments and other factors it
believes are appropriate in the circumstances.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Canadian Overseas Petroleum Limited
<p> </p> <p> Mr. Arthur Millholland, President and CEO </p> <p> Phone: 403.262.5441 </p> <p> Or, </p> <p> Rob Elgie, Manager of Investor Relations </p> <p> Phone: 403.262.5441 </p> <p> Or </p> <p> Pelham Bell Pottinger Public Relations<br/> James Henderson, Managing Director or Mark Antelme </p> <p> Phone: +44 (0) 207 861 3160 </p>