Victoria Oil & Gas Plc
22�Dec�2005
West Medvezhye Acquisition
Victoria Oil & Gas Plc (�VOG�), the AIM-quoted oil and gas company operating in the Former Soviet Union has completed the process begun in early 2005 for the acquisition of the remaining 25.2% of ZAO SeverGas-Invest, the owner of the West Medvezhye gas and gas condensate licence in Western Siberia, to bring its total shareholding to 100%.
VOG announced on 17 May 2005 that it had agreed commercial terms to acquire a further 15.2% but it subsequently discovered a problem with the vendors' title and suspended the proposed acquisition. Negotiations continued and, having resolved the title issues, VOG agreed to proceed with the transaction and has further agreed to increase the purchase to cover the entire minority interest.
The consideration for the acquisition was satisfied by US$3.2 million cash, the issue of 1,230,000 new ordinary shares in VOG, the waiver of VOG's outstanding claim of US$2.6 million against the vendors of the 74.8% of SGI acquired in November, 2004 and release of 1,855,000 shares from escrow. A total of 3,734,314 shares, are to be held in escrow until 30 April 2006 in support of warranties that have been given by the vendors.
A recent report by independent reservoir auditors DeGolyer & MacNaughton estimated an expected recoverable gas resource for the field surrounding the first exploration well at West Medvezhye of half a trillion cubic feet of gas.
Chairman Kevin Foo said today, �I am very pleased that we have been able to achieve a breakthrough and bring these negotiations to a conclusion. This will allow our shareholders to enjoy the benefits of 100% ownership of our exciting discovery at West Medvezhye.�
Source: Victoria Oil & Gas Plc announcement
Kerman & Co LLP, led by Michael Bennett and assisted by Fiona McGuinness, advised VOG on the acquisition.
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