Business
Resource Star Ltd - Binding Term Sheet Signed
Resource Star Ltd - Binding Term Sheet Signed.
About this update from Red Rock Resources Plc
[{"type":"text","content":"\n \nRNS Number : 8257K Red Rock Resources plc 02 August 2013 \n \n\nRed Rock Resources plc\n(\"Red Rock\" or the \"Company\")\nResource Star Ltd - Binding Term Sheet Signed \n \n2 August 2013\nRed Rock Resources Plc, the mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia, and advanced gold and copper exploration in Kenya, announces the signing of a binding term sheet by its 39% owned associate Resource Star Ltd (ASX:RSL) (\"RSL\").\nRSL today announced in Australia that it had on 1st August 2013 entered into a binding term sheet with Searex Petroleum (BVI) Limited (\"Searex\") for the acquisition of an oil project in Abilene, Texas, U.S.A. \nUnder the term sheet RSL will acquire from Searex a 50% shareholding in D-Bar Leasing Inc. (\"D-Bar\"), which holds a 100% working interest in eight oil producing leases totalling 2,732 acres together with 10 acres of freehold land and buildings, drill rigs, and other equipment.\nThe leases are reported to contain 96 wells, and D-Bar has recently completed reworking 4 existing wells at an average cost of USD55,000 per well. The announcement states that each re-worked well is in the 2800'-3000' depth range and is currently producing 15 BOPD.\nThe rework programme is planned to cover the 80 producing wells, and D-Bar plans to expand production by additional drilling and by taking up an option of further acreage.\nThe purchase consideration will be 65m new RSL shares and AUD 1m cash, and a further 41,000 performance shares in RSL. Each performance share converts to 10,000 new RSL shares subject to the achievement of production milestones by performance dates. RSL will in addition assume certain payment obligations of Searex.\nThe transaction is subject to the raising of a minimum $5m by way of high yield debenture notes, regulatory and RSL shareholder approvals, and the completion of successful due diligence by RSL.\nFurther details of the transaction may be found at: http://www.asx.com.au/asxpdf/20130802/pdf/42hg11p5bxmtj3.pdf\nRed Rock holds 46,908,584 shares in RSL, 38.6% of the total issued shares, and is entitled to be issued a further RSL 4,803,357 shares. \nRed Rock and RSL Chairman Andrew Bell comments: \"This transaction fulfils RSL's recently announced commitment to identifying new resource sectors and ac...