RTO with Anio Oil & Gas Sha.
In
The Company has experienced significant delays in completing the Transaction as a result of unfavourable market conditions and oil prices and more recently due to delays resulting from the COVID-19 pandemic. As a result of improved market conditions, the Company and Anio are now seeking to move forward with the Transaction, which the parties hope to close by the end of 2020, subject to any additional delays which may result from the COVID-19 pandemic and satisfaction of all conditions of closing, including the approval of the
To date, the Company has completed the required due diligence and necessary preparation to initiate the RTO with Anio. The due diligence included a complete review of present status of Anio and the legal framework related to the license. Also the development program in place by Anio and future plans for production growth was compared with the development plan prepared by the Company so necessary adjustments can be made once the Transaction is complete. Amid the COVID-19 pandemic limitations, the Company and Anio are in discussions to finalize all requirements on the basis of the MOU and obtain the authorizations from the local authorities in order to proceed with the Transaction. The Company expects that these discussions will conclude shortly and the Company will provide an update at that time.
The Ballsh-Hekal oil field is approximately 1000m deep carbonate anticline structure containing heavy oil. The field is divided into two sections by a saddle ridge; the smaller Hekal section is a gas cap reservoir that seems to lack the aquifer support enjoyed by the larger Ballsh section.
The reservoir was discovered in April of 1966 and production began in 1967. The reservoir produced a peak of 370,000 tonnes (376,000m3, 2,364,000 bbl) of oil in 1972 (6,500 bopd) and has since declined despite the major infill drilling operations that reduced the well spacing to less than 200 meters (10 acre).
Production from the Ballsh field is not achieving the reservoir's potential. The technology applied to the reservoir is outdated, recent investment has been extremely limited, and the workforce has become fragmented and de-motivated. Notwithstanding, the Ballsh reservoir has achieved tolerable results despite the roadblocks which prevented it from being truly successful. The Ballsh reservoir appears to have the potential to again become a significant oil producer.
Loans to Anio
In connection with the Transaction, the Company previously announced that it intended to loan up to
Financing Update
Pending receipt of
The Company previously raised aggregate gross proceeds of
Quote from
'We are excited for the contribution of these investors to our private placement as they confirmed their support and confidence in Letho. This support will initiate a momentum for funding the transaction with Anio and increase our shareholder value by increasing production of the Ballsh-Hekal oil field. We are now ready to start planning to complete the Anio transaction as quickly as possible.'
About
Completion of the business combination transaction with Anio is subject to a number of conditions, including but not limited to,
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the proposed business combination transaction, any information released or received with respect to the business combination transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company, once resumed, should be considered highly speculative.
Contact:
Email: info@lethoresources.com
Web: www.lethoresources.com
Forward-Looking Statements
Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. Such statements include the terms of the proposed private placement (including proposed use of proceeds) and the terms of the proposed business combination with Anio. These statements reflect management's current estimates, beliefs, intentions and expectations and are not guarantees of future performance. Such statements are based upon certain assumptions which Letho's management believes to be reasonable, including assumptions relating to the availability of funds to complete the private placement, the nature of Anio's assets and the expected conditions to closing. Letho cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Letho's control. Such factors include, among other things: risks and uncertainties relating to Letho's ability to complete the proposed private placement and satisfying the conditions to closing of the business combination transaction, including the completion of satisfactory due diligence. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward looking information. Except as required under applicable securities legislation, Letho undertakes no obligation to publicly update or revise forward-looking information.
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