(Sharecast News) - Upstream oil and gas company President Energy announced on Wednesday that the acquisition of the Angostura exploration contract in the Rio Negro province of Argentina from Compania General De Combustibles (CGC) has successfully completed, alongside the agreement for subscription for $1.825million of new ordinary shares in the company, by CGC becoming unconditional.
The AIM-traded firm said the province of Rio Negro had granted a decree agreeing to the acquisition, and was also extending the time period of the exploration phase of the relevant contract for a further four years from November, during which time President said it would receive the benefit of all revenues from the producing block.
It said the work commitment of around $9m, pertaining to the contract, was spread across the life of the extended contract.
In the first six months, that work would consist of sub-surface studies and some surface infrastructure work.
As part of the acquisition, up to three experienced employees were being transferred to the company, with the board saying they were currently being integrated into President's operational team at the same time as steps were being taken to capitalise on the synergies and economies of scale that had already been identified in the pre-acquisition due diligence.
Following the completion of the acquisition, the agreement by CGC to invest $1.825m in President by way of a subscription had now become unconditional, with the first tranche of the subscription completed.
CGC invested an initial sum of $0.5m, (£0.39m), and to satisfy the amount, 8,722,213 new ordinary shares had been issued to CGC at a subscription price of 4.45p each.
"CGC has agreed not to dispose of any interest in the initial subscription shares for a period of six months after their issue," the board said in its statement.
"CGC will thereafter invest the remaining $1.325m of the subscription in seven quarterly instalments in consideration for the issue of new ordinary shares, at the prevailing middle market price on the date prior to the relevant quarter date, with the first such quarterly payment being due on 25 January."
At 0931 GMT, shares in President Energy were down 2.38% at 4.1p.
President Energy Sinks To Huge 2019 Loss, Will Focus On Rio Negro