United Oil & Gas has provided an update on the conditional sale of the UK Central North Sea Licence P2519 containing the Maria discovery in Block 15/18 to Quattro Energy, a UK North Sea focused company which is being acquired by Jesmond Capital Limited to form an enlarged entity to be listed on the TSXV.
On 1 August 2023 the Company announced that all the conditions under the asset purchase agreement (the 'APA') for the conditional sale of its UK Central North Sea Licence P2519 had not been met by the expiry of the long stop date on 31 July 2023. Further to this announcement United confirms that following the receipt by United of a US$100,000 non-refundable deposit from Quattro and a rescheduling of the total consideration payments, the parties have agreed an extension of the long stop date in the APA to 30 September 2023. It was also agreed that a further extension may be required for all conditions precedent to be met to allow completion of the sale, namely regulatory approvals to enable the transfer of funds to United, and the Licence assignment to Quattro, with such extension to be automatically granted on the satisfaction of the Quattro funding condition being met by 30 September 2023.
Whilst there has been no change to the maximum consideration under the APA of £5.7 million (cUS$7.2 million), following discussions with Quattro and their brokers the parties have agreed that revising the schedule of consideration payments will support the Quattro funding process and significantly increase the executability of the transaction. In considering this extension and revised payment terms, including the receipt of the non-refundable deposit, the Company has reviewed the other available options to deliver value to shareholders from this Licence and have concluded that the sale to Quattro remains the best option at this time.
Revised consideration payments:
- Payment by Quattro to United of US$100,000 non-refundable deposit on 7 August 2023
- £1million of initial cash payment to United now included in Contingent bonus payments, resulting in £1.45 million, less the non-refundable deposit due on completion (US$1.75 million)
- No change to the additional £1.0 million to be paid to United upon approval of an FDP for Block 15/18e
- Contingent bonus payments of up to £3.25 million (previously £2.25 million) upon reaching gross production thresholds from the field of three, four and five million barrels
Source: United Oil & Gas
