11 Jun 2012 08:11
For Immediate Release | 11 June 2012 |
GLOBAL ENERGY DEVELOPMENT PLC
(the "Company")
SALE OF REMAINING INTEREST IN PERU BLOCK 95 CONTRACT
Global Energy Development PLC, the South America focused petroleum development and production company (LSE-AIM: "GED"), with operations in Colombia, South America announces it has closed on the sale of its remaining 40% working interest of the Peruvian Block 95 License Contract ("Block 95") through its wholly-owned subsidiary to Gran Tierra Energy, Inc. (NYSE MKT: "GTE", TSX: "GTE").
Block 95 is the Company's only Peruvian asset, located in the Marañon Basin in the north-east area of the country, with net 2P reserves of 8.4m barrels of oil as reported in the Company's annual report and accounts for the year to 31 December 2011. The contract is in its third exploration phase although is currently under force majeure, pending approval of certain environmental licensing requirements. Block 95 did not generate any revenues in the year to 31 December 2011.
Under the terms of the purchase and sale agreement, the Company sold its 40% working interest to GTE for cash consideration of $5.4 million with $2 million payable upon closing and the remaining $3.4 million payable upon the earlier of either approval of the assignment from Perupetro, Peru's national agency of hydrocarbons, or one (1) year from the closing date. The effective date of the sale is 1 June 2012. The proceeds from the sale will be used for working capital generally.
Commenting, Stephen Voss, Managing Director, said: "Prolonged force majeure status of the Block 95 Contract and rising anticipated exploratory well costs led to our decision to sell our remaining working interest. This sale allows the Company to remain focused on our core value contract areas in the Middle Magdalena Valley and Llanos Basin in Colombia, South America."
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