Shareholders of Dominion Petroleum on Monday rejected a $50 million placing in a Maltese farm-out deal with Mediterranean Oil and Gas and the two companies are now discussing how to proceed with the deal.
MOG in June signed an agreement to farm out a 75% operated working interest in a production sharing contract for four blocks offshore Malta to Dominion.
The farm-out deal was conditional on the $50 million fundraiser by Dominion, but this was rejected by the company’s shareholders on Monday.
The proposed placing secured 63.5% of the vote at Monday’s general meeting, falling just short of the 66% threshold needed to complete the funding.
Dominion said then that it would proceed with farm-out discussions as planned, adding that it had the money to cover its existing obligations.
The farm-out deal covered Blocks 4, 5, 6 and 7 of Area 4 offshore Malta, situated north of Libya.
Independent assessments suggest prospects at Area 4 have gross recoverable un-risked prospective oil resources of 115 million barrels of oil with an 18% chance of success.
MOG holds a 90% operated working interest through PEL under a Maltese production sharing contract, with Leni Gas & Oil Investments Limited holding the remaining 10% of working interest.
The first exploration period for the prospects runs until January 2013 with a minimum spend requirement of $5 million.
MOG anticipates that the 3D seismic survey will cost between approximately $8 million and $10 million gross to undertake, which would satisfy the minimum spend requirement.
Dominion has previously said that it planned to use a big chunk of the placing proceeds, $12 million, on exploration and development in Malta.
Source: The Malta Independent
[mappress] Source: The Malta Independent, July 27, 2011;