Business
Update on Discussions with Core Oil & Gas Inc.
Update on Discussions with Core Oil & Gas Inc..
About this update from Tern Plc
[{"type":"text","content":"\n \nRNS Number : 6665G Chalkwell Investments PLC 16 May 2011 \n \n\n \n16 May 2011\n \nChalkwell Investments plc \n(\"Chalkwell\" or the \"Company\")\n \nUpdate on Discussions with Core Oil & Gas Inc. (\"Core\") and Funding Requirements\n \nChalkwell is an AIM-quoted investment company with a focus on the resource sector and as previously announced is in discussions with Core. \n \nCore is a US-focused oil and gas company, which has a 33.3% working interest and a 25.0% (not 29.13% as previously stated) net revenue interest in respect of Block 818L, Mustang Island, in Kleburg County, Texas (\"the Mustang Island assets\"). The Mustang Island assets are shallow inshore oil and gas assets, located in the Gulf of Mexico, with infrastructure in place and nearby oil and gas pipelines available. \n \nOn 1 November 2010, the Company announced a placing to raise £600,000, of which £500,000 was used to make an unsecured loan to Core, and on 26 January 2011, the Company announced a subscription to raise £1 million (\"Subscription\") of which £300,000 was used to make a further unsecured loan to Core, as announced on 7 February 2011. The advances to Core were to allow it to meet its obligations under the joint operating agreement (\"JOA\") with Dominion Resources and in order to meet its own working capital requirements.\n \nOn 24 February 2011, the Company made a further loan to Core of £428,000, as a result of unforeseen cost over-runs, taking the aggregate advanced to Core to £1,228,000 (excluding interest). The terms of the loan were the same as those of the previous loan made to Core: it was unsecured, carried interest at a rate of ten per cent. per annum and was repayable on 1 October 2012 or earlier in certain circumstances. \n \nAs announced on 17 March 2011, Chalkwell requires additional working capital in order to meet its own short term obligations and also to allow further advances to be made to Core which itself requires funds to meet its obligations to its JOA partners. Prior to seeking to raise such additional capital, Chalkwell believed it necessary to agree the terms on which it would acquire the Mustang Island assets, and that security be granted in connection with all advances made to Core to date and any future advances.\n \nAccord...