Kairiki Energy has entered into agreements, through its wholly owned subsidiaries, to sell its 30% interest in each of the Sicily Channel exploration permits, Pantelleria and Kerkouane, to AuDAX Resources. AuDAX, either directly or indirectly via subsidiary companies, operates and holds a 70% interest in the permits.
According to the company, the divestment of the Sicily Channel permits has eliminated Kairiki’s financial obligations in 2009 and 2010 to a 2D seismic program on Kerkouane and a well commitment on each permit with a total estimated cost, net to Kairiki, of $14 million ($47 million gross).
As a result of the divestment, Kairiki is free of any further obligations with respect to these permits. As consideration, AuDAX will pay Kairiki $280,000 cash for each permit approximately equating to the acquisition cost. The payment will be made when AuDAX disposes of an interest in these permits.
Laurie Brown, managing director of Kairiki Energy, said: The financial obligations in respect of maturing these exploration ventures would require significant funding in the near term.
Given the current economic conditions for funding exploration activities we believe that our funds and resources are better leveraged towards developing our lower risk Philippines asset base in order to provide a greater certainty of generating shareholder value.
