Continental will pay a total consideration of $27.32 million. The deal is effective as of June 1, 2008 and will close subject to and after receipt of a waiver or expiry of a right of first offer, an Alberta court order approving the disposition by Ernst & Young as Receiver of Fuel-X International, and approval of the assignment of the production sharing contract (PSC) interest by Indonesian authorities.
Continental has paid a cash deposit of $1.5 million on signing of the definitive sales and purchase agreement. At closing Continental will pay an additional $13.5 million cash, adjusted for production income since June 1, 2008, plus issue 12.32 million newly created Series-A preferred shares each having $1 face value.
Funding of the cash due at closing will be led by Macquarie Bank Energy Group of London under its August 2007 financing mandate with Continental.
The Tungkal PSC encompasses an area of 2,285sqkm held by production until August 25, 2022. It is operated by Pearl Oil Tungkal, a subsidiary of Abu Dhabi-based Pearl Energy, which holds the remaining 70% working interest.
