Longford Energy Inc.-Finalizes Payment Terms for Acquisition of Additional 20% Interest in Chia Surkh Block Production Sharing Contract in the Kurdistan Region-Iraq
CALGARY, ALBERTA--(Marketwire - July 15, 2010) - Longford Energy Inc. ("Longford" or the "Company") (TSX VENTURE:LFD) is pleased to provide the following update on the settlement of final payment terms with the Kurdistan Regional Government ("Government" or "KRG") with regards to the Company's option to acquire an additional 20% working interest in the Chia Surkh Block, as announced in July 27, 2009.
Capacity Building Payment "Profits Royalty"
As previously announced in July 2009, Longford had acquired a 50% interest in a subsidiary, jointly owned with the Government, which held a 40% direct net working interest in the Chia Surkh Block Production Sharing Contract. In addition, Longford had an option to acquire the remaining 50% interest in the subsidiary on terms to be negotiated with the Government.
The Company is pleased to report that it has reached an agreement with the KRG to acquire the remaining interest in the subsidiary resulting in Longford holding an aggregate 40% direct net working interest in the Chia Surkh Production Sharing Contract. As consideration for this transaction, the Company has agreed to pay the Government a 40% royalty, in the form of capacity building payments, on its profits from future production from the Chia Surkh Block. The Government will use payments to support and finance infrastructure and capacity building projects in the Kurdistan Region. All other terms in the original contract remain unchanged.
Mr. Ahmed Said, President & CEO, stated "We are extremely pleased to add to our position and conclude our negotiations to acquire a net 40% working interest. We look forward to the start of our exploration campaign with the commencement of the seismic acquisition program."