INTL PETR ADR 
By
NSX Announcement
14 October 2013
ABN: 76 118 108 615
Corporate Office
32 Harrogate Street
West Leederville, WA 6007
P.O. Box 1385
West Leederville, WA 6901
T +61 8 9388 0744
F +61 8 9382 1411
E admin@intpet.com.au
W www.internationalpetroleum.com.au
International Petroleum Limited (NSX: IOP) ("International Petroleum" or the "Company") has entered into two binding conditional terms sheets (individually "Terms Sheet" or together "Terms Sheets") with an unrelated company incorporated in Hong Kong ("Buyer") to sell its assets in Kazakhstan ("Kazakhstan Assets") and Russia ("Russian Assets") for US$60 million.
Commenting on the reaching of agreement for the sale of its Kazakhstan and Russian assets, International Petroleum Chairman, Mr Tony Sage, said, "While these assets have only been marketed for a short period, we have received a binding agreement for a good sale price in difficult markets, which is an extremely pleasing result."
"With these assets now under a binding agreement, we are able to move the Company and its assets forward with significant financial clarity."
The sale of the Russian Assets is expected to complete in approximately one month and the sale of the Kazakhstan Assets is expected to complete in approximately six months (on receipt of Government Approval).
The Company will apply the funds received from the transactions towards payment of creditors and loans, general working capital and future exploration expenditure.
It will also look to advance its assets in Niger, along with entering into negotiations with Range Resources Limited (ASX: RRS, AIM: RRL) ("Range Resources") about a potential merger of the two companies on revised terms, given the Term Sheets for the sale of the Kazakhstan Assets and Russian Assets is now in place.
"With the binding agreements for the sale of our Kazakhstan and Russian assets now in place, the board will now look to rapidly advance our Niger acreage and proactively re-engage with the board of Range Resources so as to advance the proposed merger of the two companies in a timely fashion, on terms to be renegotiated" Mr Sage added.
Full details of the Term Sheets are included in the appendix of this announcement.
The Company expects to despatch a notice of general meeting to seek the approval of its shareholders for the sales of the Kazakhstan Assets and Russian Assets within the week.
14 October 2013 - 2-
Yours faithfully
Tony Sage
Non-Executive Chairman14 October 2013 - 3 -
For further information, please contact:
Tony Sage Non-Executive Chairman International Petroleum Limited Ph: +61 8 9388 0744 | Chris Hopkinson Chief Executive Officer International Petroleum Limited Ph: +44 20 3435 7676 | Claire Tolcon Company Secretary International Petroleum Limited Ph: +61 8 9388 0744 |
Eloise von Puttkammer Investor Relations International Petroleum Limited Ph: +61 8 9388 0744 |
International Petroleum is an oil and gas exploration and production company. The Company is listed on the National Stock Exchange of Australia (NSX: IOP).
The Company owns:
1. a 100% equity interest in a licence over the Zapadno-Novomolodezhny field for geological study of subsoil, prospecting and extraction of oil and gas in the Khanty-Mansiysk Autonomous Region in Western Siberia, the largest oil-producing region of Russia (the "Zapadno- NovomolodezhnyProject").
2. a 100% equity interest in a licence over the Yuzhno-Sardakovsky field for geological study of subsoil, prospecting and extraction of oil and gas in the Khanty-Mansiysk Autonomous Region in Western Siberia (the "Yuzhno-Sardakovsky Project").
3. a 100% equity interest in a licence over the Yanchinsky block for geological study of subsoil and prospecting for oil and gas in the Khanty-Mansiysk Autonomous Region in Western Siberia (the "Yanchinsky Project").
4. a 100% equity interest in two production licences for the Vostochno-Kamskoye oilfield and the Yanlotskoye oilfield, covering a total area of 161 km², and in the exploration rights to four blocks, covering a total area of 1,467 km², located in the Khanty-Mansiysk Autonomous Region in Western Siberia (the "Krasnoleninsky Project").
5. a 75% equity interest in an exploration licence in the Tomsk region of Western Siberia (the "Tomsk
6. a 50% interest in an early stage project covering 24,649 km2 in eastern Kazakhstan (the "Alakol
Project"), which borders the western boundary of the People's Republic of China.7. a 100% interest in four production sharing contracts and four Exclusive Exploration Authorisations relating to four blocks in the Republic of Niger known as Manga 1, Manga 2, Aborak and Ténéré Ouest (the "Niger Project").
14 October 2013 - 4 -
Key terms of the Terms Sheets
Kazakhstan Assets
(a) Pursuant to the Terms Sheet between the Company and the Buyer, the Company will sell 100% of the issued shares in the Company's wholly-owned subsidiary company, Eastern Petroleum Corporation Limited ("EPCL"), which is the owner of 100% of the issued shares in North Caspian Petroleum Limited ("NCPL"), which is:
(i) the holder of a 50% interest in the subsurface use contract, which confers rights to conduct exploration of hydrocarbon resources in the Alakol Basin in the Republic of Kazakhstan and was registered by Ministry of Oil and Gas (formerly Ministry of Energy and Mineral Resources) under registration number 1766 on 13 June 2005 ("Subsurface Use Contract"); and
(ii) the owner of 100% issued shares in a Republic of Kazakhstan entity, North Caspian Petroleum Company (NCPK) Limited Liability Partnership ("NCPK"), which acts as an operator for the holders of the Subsurface Use Contract in Kazakhstan.
(b) The consideration for the acquisition is 10million US dollars.
(c) The completion of the transaction is conditional on the following:
(i) receipt of a letter from the Buyer to confirm satisfactory due diligence by the Buyer of the
Kazakhstan Assets;
(ii) receipt of the approvals by shareholders and/or directors of both the Company and the Buyer;
and
(iii) receipt of the approval from the Kazakhstan Ministry of Oil and Gas of the sale and purchase of the Kazakhstan Assets ("Government Approval").
(d) The Buyer will deposit 10million US dollars into an escrow account with an international law firm in two stages; 1million US dollars within 3 days of the signing of the Terms Sheet and 9million US dollars within 3 days from issuance of the satisfactory due diligence report and receipt of the Government Approval.
(e) Payments from the escrow account will be made to the Company in two instalments: 2million US dollars against presentation of the share transfer form, receipt of the satisfactory due diligence report and receipt of Government Approval and 8million US dollars against receipt of a letter from the Company certifying that all debts of EPCL, NCPL and NCPK have been fully and finally settled.
Russian Assets
(a) Pursuant to the Terms Sheet between the Company's wholly-owned subsidiary, International Petroleum Limited (a company incorporated in the Cayman Islands) ("Seller") and the Buyer, the Seller will sell to the Buyer 100% of the issued shares in the Seller's wholly-owned subsidiary company, IPL Siberia Limited ("IPL Siberia"), which is the owner of 100% of the issued shares in Vamaro Investments Limited (a company incorporated in Cyprus) ("Vamaro"), which owns:
(i) 100% of the issued shares in Yuzhno-Sardakovskoye LLC (a company incorporated in Russia), which is the holder of:
