Sea Dragon Announces Extension to Closing of Acquisition of NPC Egypt

Sea Dragon and Golden Crescent Investments Ltd. have reached a non-binding understanding to extend the date by which Sea Dragon shall be required to complete its acquisition, directly or indirectly, of all of the issued and outstanding shares of National Petroleum Company Egypt Limited.

Extension of Closing Date
Under the terms of the non-binding understanding, which is subject to the negotiation and finalization of a formal amending agreement between the parties by no later than May 4, 2012, it is expected that Sea Dragon will have until August 8, 2012 to complete the Acquisition (subject to a 10 day extension). It is also expected that Golden Crescent will be entitled until August 1, 2012, to solicit and entertain alternative proposals. In the event that Golden Crescent receives a proposal it wishes to accept prior to August 1, 2012, it may terminate the existing Amended and Restated Share Purchase Agreement (the “Amended SPA”), as further amended by the amending agreement noted above, without any: (a) penalty or payment in favour of Sea Dragon of the previously contemplated termination fee; or (b) right of Sea Dragon to match any alternative proposal. In addition, prior to August 1, 2012, Golden Crescent may, at its option without terminating the Amended SPA and in consultation with Sea Dragon, seek a farm-in partner for the North El Maghara concession (to a maximum participating interest of 50% of such concession), as well as a buyer for its 12.75% participating interest in the South Ramadan concession. Should any such transaction be completed, the consideration therefore will remain, directly or indirectly, with NPC Egypt and will not be included as part of the working capital adjustment between Sea Dragon and Golden Crescent at closing.

Other than the foregoing proposed amendments, the material terms and conditions of the Amended SPA, including the requirement of Sea Dragon shareholder approval to the Acquisition prior to May 1, 2012, the completion prior to closing of the proposed International Finance Corporation financing announced by the Corporation on January 31, 2012, the receipt of the necessary consents and approvals from Sea Dragon’s senior secured creditors and the completion of certain amendments to Sea Dragon’s senior secured reserve-based credit facility agreement and related agreements, are expected to remain unchanged.

Use of Escrow Amount
Sea Dragon and Golden Crescent have further reached a non-binding understanding for Sea Dragon to continue to oversee ongoing detailed engineering work on the Muzhil Field prior to closing and for the escrow amount of US$2.5 million deposited by Sea Dragon under the terms of the Amended SPA (the “Escrow Amount”) to be released from time to time to satisfy third party costs that may be incurred by National Petroleum Company South Abu Zenima Ltd. (“NPC SAZ”) and/or South Abu Zenima

Petroleum Company (“Petrozenima”) with respect to the development of the Muzhil Field. In the event that the Acquisition does not proceed and Escrow Amount becomes payable to Golden Crescent under the terms of the Amended SPA, only the balance of the Escrow Amount (after payment of all third party obligations incurred by NPC SAZ and/or Petrozenima with respect to the development of the Muzhil Field as aforesaid) will be paid to Golden Crescent. Due to the utilization of the Escrow Amount to pay for ongoing work by NPC SAZ and/or Petrozenima on Muzhil Field, the extension of the closing date of the Acquisition is not expected to have a detrimental effect on the anticipated date of Muzhil Field first oil.

Press Release


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