Sea Dragon Energy Inc. announced that it has now paid Dana Gas Egypt Ltd. the sum of US$28.48 million for its purchase of a fifty (50%) percent participating interest in the Kom Ombo (Block-2) Concession, located approximately 1,000 km south of Cairo on the West Bank of the Nile River (the “Kom Ombo Concession”).
Sea Dragon had previously paid an initial instalment of US$10 million to DGE in January 2010 concurrent with becoming the registered holder of the Kom Ombo Concession under Egyptian law. There continues to be a small balance due from the Company to DGE of approximately $3.0 million which will be paid once all working capital and other adjustments have been finalized between the parties.
The aggregate purchase price for the Company’s 50% participating interest in the Kom Ombo Concession is approximately US$41.27 million, inclusive of Sea Dragon’s reimbursement to DGE of approximately US$4.0 million of Sea Dragon’s participating interest share of costs paid by DGE for the period after the effective date and prior to the closing date and inclusive of certain working capital adjustments of approximately US$4.0 million. Under the terms of the acquisition, Sea Dragon is also responsible to pay approximately $4.0 million of DGE’s share of costs incurred after the effective date.
Commenting on the acquisition of the Kom Ombo Concession, Mr. Said Arrata, Sea Dragon’s Chairman and CEO said:
“We are delighted with this significant acquisition for Sea Dragon. We have already commenced work with our partners in preparing on our development drilling programme in the 2nd quarter of 2010. Plans for the Al-Baraka oil field will include the drilling of some 30 development wells over the next several years. Horizontal drilling and specialized fracturing are the techniques being considered in order to maximize production rates and oil recovery.”