EastSiberian Plc: Farm-in Agreements with East Siberian Resources Have Expired
EastSiberian Plc (“EastSiberian ” or the “Corporation”), an international junior oil exploration company incorporated in the Bailiwick of Jersey, announces that the previously announced Farm-in Agreement with East Siberian Resources Ltd. (“ESR”) expired on March 31, 2013, due to unsuccessful fund raising initiatives. The Company is currently engaged with specific investors examining existing producing properties and other development opportunities in Russia that may be a viable alternative to the farm-in agreement.
Farm-in Agreement
The Farm-in Agreement announced on June 27, 2012, provided the Corporation an opportunity to earn up to a 51% equity stake in two wholly-owned Cyprus subsidiaries of ESR, Elranio Holdings Ltd. (“Elranio”) and Lesona Holdings Ltd. (“Lesona”) collectively, the (“Holding Companies”). Elranio indirectly holds a Russian entity, a 100% interest in an exploration and production license located on the eastern onshore portion of the Sakhalin Island. Lesona indirectly holds one oil production licence and one exploration and production licence located in Eastern Siberia.
The Corporation was pursuing fund raising initiatives for approximately USD$50 million to fully fund the work program contemplated by the Farm-in Agreement (the “Work Program”) and for general corporate purposes. The fund raise was being pursued by a brokered private placement of common shares of the Corporation at a market determined price (the “Private Placement”). Given the difficult financial investment conditions, the Corporation was unsuccessful in obtaining the investment funds specific to this farm-in agreement by March 31, 2013, and the farm-in agreement expired.
The Corporation is presently involved with some specific investors looking at various strategic oil property investments that could involve existing oil production and/or development in Russian-based oil properties. The Corporation will report on the results of these investment discussions in due course.