East West Petroleum strikes deal to sell Cheal block

2023-11-01 15:25 ET - News Release

Mr. Nick DeMare reports

AGREEMENT FOR THE SALE OF NEW ZEALAND OIL & GAS PROPERTIES

East West Petroleum Corp. has entered into an interim agreement for the sale of its oil and gas interests in New Zealand (the Cheal block).

The company currently holds a 30-per-cent interest in PMP 60291 and the interim agreement contemplates the purchase of the company's interest in the Cheal Block by the 70-per-cent owner. The key terms of the interim agreement are as follows:

• Purchase price of $1-million (U.S.);

• Effective date of sale is July 31, 2023;

• Purchaser assumes all reclamation obligations, which are estimated to be $633,820 (U.S.);

• Contingent consideration of $350,000 (U.S.) should an additional well be drilled and completed;

• Deposit of $250,000 (U.S.) on signing definitive agreement.

The terms described herein are binding under the interim agreement but subject to the negotiation and execution of a definitive agreement.

In addition to the definitive agreement, the transaction is conditional upon all necessary New Zealand government approvals, regulatory and exchange approval as well as approval of the East West shareholders.

In connection with the required shareholder approvals, an annual and special meeting of the shareholders of the company has been scheduled for Dec. 15, 2023.