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Wednesday, March 2, 2016
SacOil intends to reorganize its indirect participating interest in the DRC’s Block III that is currently held by its indirect subsidiary Semliki Energy. The reorganization is aimed at giving the company a “direct” line of sight into the activities of the block.
The impact of the reorganization is that the assets and liabilities related to fellow Semliki shareholder, Divine Inspiration Group Proprietary Ltd. (DIG), will be retained in Semliki.
Semliki has a direct 18.3% participating interest in Block III alongside partners Total E&P and the DRC government. Semliki is currently 68% directly owned by RDK Mining Proprietary with the remaining 32% held by DIG. RDK is a wholly owned subsidiary of SacOil whose effective interest in the asset is therefore 12.5%. The operator of Block III is Total.
The proposed reorganization will separate the respective interests of SacOil and DIG in Block III via a change in ownership of Semliki. SacOil has formed a new wholly owned subsidiary, SacOil DRC SARL, which will be directly owned by RDK. Semliki will dispose of a 12.5% participating interest in the PSC, and a proportionate interest in the Block III JOA and exploration permit, to SacOil DRC for a nominal cash consideration.
Concurrently Semliki will repurchase the entire shareholding of RDK in Semliki for a nominal cash consideration, resulting in Semliki becoming a wholly owned subsidiary of DIG. Semliki will also assign a portion of its future rights and obligations under the farm-out agreements to SacOil DRC, with the consent of Total. This assignment represents a transfer of SacOil’s rights and obligations attached to the 12.5% effective participating interest in the PSC now held through SacOil DRC pursuant to the disposal.
SacOil and DIG will retain their respective participating interests of 12.5% and 5.87% in Block III after the reorganization. SacOil and DIG concluded the transaction agreements implementing the reorganization on February 29. Closing is subject to all necessary approvals being procured.
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