Niko Provides Updates
CALGARY, ALBERTA -- (Marketwired) -- 08/30/13 -- Niko Resources Ltd.
("Niko" or the "Company") (TSX:NKO) is pleased to provide the
Farm-outs, Non-core Asset Dispositions, and Other Arrangements Update
Niko is pleased to announce that it has executed two sets of
agreements which, subject to the required government approvals, will
provide proceeds of nearly $40 million.
Farm-out of Grand Prix PSC in Madagascar
Niko has signed a definitive farm-out agreement under which OMV, an
integrated international oil and gas company, will earn a 40%
interest in the Grand Prix PSC in Madagascar, with Niko retaining a
35% working interest. Closing of the deal is subject to the approval
of the Government of Madagascar.
Other Arrangements for Semai V and Kofiau PSCs in Indonesia
Niko has also signed a definitive agreement with Hess Corporation for
certain consideration in exchange for assuming a 100% interest in the
Semai V PSC, located offshore Papua province in eastern Indonesia.
Two wells have been previously drilled in the block, Andalan 1 and 2,
with one future commitment well yet to be drilled. Drilling results
from these wells indicate hydrocarbon potential remaining on the
block. The Company also signed an agreement to increase its working
interest (effective prior to the drilling of the Elit-1 well
discussed below) to 100% in the Kofiau PSC, also located offshore
Papua province, for nominal consideration. The closings of these
transactions are subject to the approval of the Government of
Indonesia Exploration Updates
The Elit-1 well, located in the Kofiau PSC offshore Papua province in
eastern Indonesia, has been drilled in water depth of 1,335 feet to a
total depth of 3,915 feet in 9 days by Diamond Offshore's Ocean
Monarch drilling rig, under budget and ahead of schedule. The well
encountered 10 feet of gas at the top of a 90 foot sand package and
has been plugged and abandoned.
Pending the Company's re-evaluation of its go-forward exploration
capital spending priorities, the Company has decided to temporarily
suspend its drilling program in Indonesia. The Company is working on
various options to drill for third parties or to assign the contract
for the Ocean Monarch rig and related service contra
cts to third
parties for an extended period of time. The Ocean Monarch is being
mobilized to the Makassar Strait area until the decision on the next
drilling location has been finalized.
The Company is continuing its discussions with its credit facility
syndicate banks regarding the re-determination of the borrowing base
under its credit facility and is working with the banks on a deferral
to September 30, 2013 for the re-determination date and a deferral to
October 31, 2013 for any required adjustment to outstanding
borrowings to reflect the new borrowing base.
Potential Refinancing of the Credit Facility
The Company is working on options to potentially refinance its credit
facility to provide increased funding for its future capital
Certain statements in this press release constitute forward-looking
information. Specifically, this press release contains forward
looking information relating to various governmental approvals,
proceeds from various agreements, the Company's working interest in
various PSCs, the re-determination of the Company's borrowing base
under the credit facility and the re-financing of the Company's
credit facility. These forward looking statements are based on
certain key expectations and assumptions of management, including
anticipated market conditions. The reader is cautioned that the
assumptions used in the preparation of such forward looking
information, although considered reasonable at the time of
preparation, may prove to be incorrect and there can be no assurance
that the expected proceeds from agreements will occur or occur on
terms acceptable to the Company. Actual results achieved may vary
from the information provided herein as a result of numerous known
and unknown risks and uncertainties and other factors and such
variations may be material. Such factors include, but are not limited
to: risks associated with market conditions; risks associated with
oil and gas operations including equipment failures or accidents; the
ability of suppliers and third party contractors to meet commitments;
pressure or irregularities in geological formations; and adverse
weather conditions. Niko makes no representation that the actual
results achieved during the forecast period will be the same in whole
or in part as those forecast.
Niko Resources Ltd.
Chairman of the Board,
VP Finance & CFO
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