Oryx Petroleum Corporation Limited (Oryx Petroleum or the Corporation) and Zeg Oil and Gas Ltd (Zeg Oil), have announced that they have entered into a definitive agreement whereby Zeg Oil has subscribed for and been issued 75.7 million common shares of the corporation for consideration of US$30 million. In addition, Oryx Petroleum intends to contract with an affiliate of Zeg Oil for the provision of US$40 million of drilling and other services related to the appraisal and early production of the Zey Gawra field in the Hawler license area in the Kurdistan Region of Iraq (the Zey Gawra contracts). It is intended that US$20 million of consideration for work performed under the Zey Gawra Contracts will be paid through the issuance of an additional 50.5 million common shares of Oryx Petroleum.
As of December 31, 2015, Netherland, Sewell & Associates, Inc. (NSAI), an independent oil and gas consulting firm, estimates that the Zey Gawra field contains gross (100%) proved plus probable oil reserves of 112 million bbls, representing 31% of the 366 million bbls of gross (100%) proved plus probable oil reserves attributable to the Hawler license area.
Zeg Oil is a privately held company based in the Kurdistan Region of Iraq that provides a broad range of engineering and construction services to the energy sector.
The corporation has also entered into a definitive agreement with the Addax and Oryx Group (AOG) to extinguish US$57 million of principal and accrued interest under the US$100 million credit facility provided by AOG to Oryx Petroleum in March 2015, in consideration for 143.4 million common shares of the Corporation. The closing of the subscription by AOG for common shares of the Corporation in consideration of extinguishing debt is subject to minority shareholder approval and acceptance by the Toronto Stock Exchange.
All share issuances in connection with the aforementioned agreements have been, or are proposed to be, based on an Oryx Petroleum share price of C$0.55 per common share and a fixed Canadian Dollar-United States Dollar exchange rate of 0.7207. Provided all of the transactions contemplated above are approved and are completed, AOG will own 58% and Zeg Oil will own 32% of the corporation's common shares outstanding.
Adapted from a press release by Louise Mulhall
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/02032016/oryx-petroleum-and-zeg-oil-and-gas-announce-strategic-investment/