News Releases
Date: May 21, 2010
CommonShares: 16,096,084
TSX: “ISR”
Settlement Agreement reached for Sukkur and Sujawal Blocks, Sind Province, Pakistan
International Sovereign Energy Corp. ("ISR" or the "Company") reports that it has finalized a settlement agreement (the "Sukkur Agreement"), with Mari Gas Company Limited ("MGCL"), and Petroleum Exploration (Private) Limited ("PEL"), its partners in Sukkur Block, and has also finalized a settlement agreement (the "Sujawal Agreement") with MGCL its partner in Sujawal Block on May 14, 2010. Both blocks are located in the Province of Sind.
Sukkur Block.
The Sukkur Agreement:
- is a general release and a final settlement which will discharge and extinguish all of the claims, liabilities, cash calls, surcharges claimed by MGCL on the Company, which amounted to US$1.9 million on July 24, 2009. MGCL and PEL undertake to settle any outstanding obligations of ISR
- ISR will withdraw its litigation including a suit for declaration along with application for Injunction against MGCL and PEL.
- ISR will assign its 15% working interest held in this block to MGCL and PEL.
Sujawal Block.
The Sujawal Agreement:
- is a general release and a final settlement which will discharge and extinguish all of the claims, liabilities, cash calls, surcharges claimed by MGCL on the Company, which amounted to US$973,000 on July 24, 2009. MGCL undertake to settle any outstanding obligations of ISR
- ISR will withdraw its litigation including a suit for declaration along with application for Injunction against MGCL
- ISR will assign its 15% working interest held in this block to MGCL.
The Company is in the process of filing applications for consent decree in terms of the agreements with the courts in Islamabad, Pakistan. Upon grant of the consent decree, ISR would request for approval by the Government of Pakistan of assignment of its working interest in Sukkur and Sujawal blocks in terms of the agreements. With the submission of deeds of assignment by MGCL and PEL along with their respective guarantees, ISL's bank guarantees would likely be released forthwith.
Of the total settlement amount of $2.873 million (Sukkur US$1.9 million, and Sujawal US$973,000) the Company had made a provision of US 725,000 in the Q2 2009 interim financials. In addition the Company also made provisions for the bank guarantees related to these blocks amounting to $771,000 at the end of Q2 2009 interim financials. The impact of the settlement agreements is expected to reduce the Company's liabilities by $1.5 million, and reverse the charge to operations of the same amount in Q2 2010 interim financials. In addition the anticipated release of the performance guarantee of PKR 25 million ($314,000) will enable the Company to have access to previously restricted cash. Expenses related to reaching this settlement is anticipated to be in the region of $250,000.
Settlement with the Company's partners in Pakistan will enable the Company to focus on its Canadian operations, and reduce anticipated liabilities recorded, improving its net debt position.
International Sovereign Energy Corp. is an oil and gas exploration development and production company with offices in Calgary, Alberta and is active in the exploration and development of hydrocarbon reserves in western Canada.
For further information, please contact:
Sharad Mistry
Interim Chief Executive Officer
Chief Financial Officer
T: [403] 263 - 2472
F: [403] 264 - 7035
E: smistry@isove.com
|
Reader Advisories
Forward-Looking Statements: This news release contains certain forward-looking statements including management's assessment of future plans and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. These statements include matters related to procedure and timing in the Pakistani court system. These statements are based on a number of assumptions and risks including the general uncertainty inherent in litigation proceedings, particularly in a foreign jurisdiction. The news release also contains forward looking statements relating to Q2, 2010 financial. These statements are based of current information at the date of this release and are subject to management approval for Q2 reporting.
The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
The statements with respect are intended to explain the expected outcome of the settlement and should not used for any other purpose.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
This news release is not for dissemination in the United States or to United States persons.
|
 |
