Magellan Petroleum Corporation Announces Young Energy Prize S.A. Commitment and Extension Of Evans Shoal Agreement

Magellan Petroleum Corporation has received and accepted a legally binding commitment from its largest shareholder, Young Energy Prize s.a. (YEP), to provide the necessary funds required for MPET's wholly-owned Australian subsidiary to close out the acquisition from Santos Offshore Pty Ltd (Santos) of a 40% ownership interest in the Evans Shoal natural gas field in the Bonaparte Basin offshore Northern Territory Australia.
MPET and Santos have agreed to extend the date for closing the acquisition of the Evans Shoal interest by MPET's Australian subsidiary until January 31, 2011 in order to allow additional time for the parties to obtain customary transaction approvals.
The agreement to extend the date for MPET to provide the balance of funds to Santos includes an extension of the date for forfeiture to Santos of monies being held in escrow should MPET be unable to achieve completion.
The total initial purchase price of the acquisition is AU$100 million.  On March 25, 2010, in connection with the execution of the acquisition agreement with Santos, MPET made an initial payment to Santos of AU$15 million leaving AU$85 million payable by MPET upon closing.  On August 9, 2010, MPET announced the agreement of YEP to purchase $15.6 million of MPET shares at $3 per share for purposes of the Evans Shoal acquisition.
Nikolay Bogachev, the Chairman and CEO of YEP, explained, "YEP has from the outset been a very strong advocate of the Evans Shoal project and has committed to provide the funds needed for Magellan to complete the acquisition of Santos' 40% interest in the project. YEP looks forward to continuing to work closely with Magellan to achieve its broad-scale potential."
Source: Press release