The option gives Island access to stakes in Valiexchimp’s Moldova and Tatarstan assets. The option can be exercised by Island until November 30, 2007, and is subject to satisfactory technical, commercial and legal due diligence.
The cost of acquiring the equity stake in the Valiexchimp oil and gas assets is E10 million, of which E5 million will be paid on formation of the JV. The balance of the acquisition price is payable after 90 days of continuous oil production from the Valeni Field. The gross cost of the investment program over two years is capped at $13.36 million.
Island is issuing 100,000 ordinary shares to Valiexchimp in accordance with the terms of the agreement in respect of securing an option to acquire the assets.
