LONDON (Alliance News) - Sefton Resources Inc Thursday said it has entered into a development agreement with UTAS Petroleum Services Ltd to to explore a potential transaction involving producing oil and gas assets in Indonesia.
The deal will not only lead to a potential new project for the company, but may also see Rob Shepherd, who has previously worked for the likes of Royal Dutch Shell PLC, Ophir Energy PLC, Imperial Energy PLC and AIM listed Azonto Petroleum PLC, take the helm at Sefton.
Under the terms of the agreement, Sefton will make an advanced payment under commercial terms of GBP500,000 to UTAS to allow the joint venture to progress the due diligence and possible funding arrangements for certain oil and gas properties in Indonesia.
The joint venture is targeting assets that are currently producing 250 barrels of oil equivalent per day, with the potential to produce up to 1,000 barrels per day within 12 months "if developed appropriately", it said.
Furthermore, a joint venture committee will be formed on which Sefton directors will form a majority of the representatives and will be responsible for the decisions made at all levels of the venture.
Sefton has highlighted that UTAS is controlled by "an experienced and well respected oil and gas executive" Robert Shepherd, who will play a key role in the agreement.
Sefton has the option to acquire the subsidiary created by UTAS to pursue the potential transaction for a "nominal amount", and said if that option is exercised then Shepherd would become the company's new chief executive, together with a number of additional non-executive directors who have been identified.
"Under the terms of the agreement, Rob Shepherd will be paid a market day rate on a monthly basis from the proceeds of the payment advance. With the exception of these payments, neither UTAS, nor any of the individuals associated with it, will personally profit from the terms of the development agreement," said Sefton.
Sefton shares were up 3.7% to 0.0985 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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