Island to sell Netherlands assets

Island Oil & Gas PLC’s wholly owned subsidiary, Island Oil & Gas BV (IOGBV), has signed a Term Sheet with Delta Hydrocarbons B.V. (Delta) for the sale of the entire issued share capital of Island Netherlands BV (INBV) to Delta, subject to execution of the fully termed sale and purchase agreement .

The assets (the ‘Assets’) being disposed of include INBV’s 83.33% interest in the Q13a Production Licence, which contains the undeveloped Amstel Oil Field, and its 100% interest in the recently awarded Q13b Exploration Licence, covering the shallow part of the Licence and including the undeveloped Zaan oil field and several appraisal and exploration prospects.

The consideration for the Transaction will be US$ 25,000,000 payable immediately on completion. In addition, Delta will advance to Island US$ 10,000,000 (the “Advance”). It is intended that the Advance will be repaid from an Overriding Royalty Interest (“ORI”) granted to IOGBV of 2.5% of the gross export production from the Amstel Oil Field; and 2% and 1.5% respectively of the gross export production from the Zaan oil field and any tie-backs via the future Amstel facilities or any other operated tie-backs resulting from any of the licence areas that are the subject of the Transaction. In the event that the ORI does not cover the full amount of the Advance any remaining would be repayable in cash or at Delta’s discretion can be converted into Island shares at the average weighted 20 day trading price prior to conversion.

Source : www.islandoilandgas.com/