Northcote Energy Ltd, together with Springer Oil and Gas LLC have cut a deal to purchase the US interests of Aminex for $5 million.
The payment will be transferred as $150,000 in cash; $350,000 worth of Northcote stock; and the remaining $4.5 milion as production payment at $10/barrel. Payments are scheduled to begin on January 1, 2015.
The buyers have also agreed to invest a minimum of $1 million in development capital into the company over the coming 12 months in order to increase production. The sale will be finalized upon approval by the shareholders.
“I am very pleased to announce the proposed sale of Aminex USA Inc which would deliver on the company’s stated intention to focus on its highly prospective assets in Tanzania and to grow in Africa as a production and development business,” said chief executive Jay Bhattacherjee.
“With the commitment of Northcote and Springer to boost production by deploying capital into the assets and with the fact they are proven operators in USA, the company would be able to retrieve significant value from this non-core asset for our shareholders once the transaction is finalized. This would allow the management team to continue their focus on growing the business in Africa and in particular Tanzania.
“With first gas scheduled for 2015 from the Kiliwani North field and significant progress being achieved on the seismic program in Ruvuma, the management team looks to the future with confidence.”