Petroleum Africa
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Tuesday, September 17, 2013
Molopo Energy has entered into an agreement that will have it exiting its South African biogenic gas assets. The company plans to focus on its North American exploration and development assets, making the South African assets no longer core to Molopo’s business.
The agreement with the unnamed South African-based party includes production rights granted in 2012. The transaction, which has a potential value of up to 53 million rand, will be effected via a sale of the shares of Molopo’s South African subsidiary. Completion of the transaction is subject to approval by South African authorities, which is expected to be received by the end of the year.
Under the agreement the buyer would assume all future development obligations; Molopo recovering the expenditures incurred subsequent to May 2, 2013 (estimated to be approximately 3 million Rand); and Molopo receiving distributions equaling 36% of future net distributable profits of Molopo South Africa during the ten years immediately following completion of the transaction, subject to a maximum payment of 50 million rand.
Steve Cloutier, Molopo’s MD and CEO stated “The structure of this transaction will allow Molopo and its shareholders to continue to participate in the potential of this project, without assuming any capital risk.”
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