VANCOUVER, BC / ACCESSWIRE / April 1, 2015 / Avanti Energy Inc. (TSXV: AVN) ("Avanti" or the "Company") is pleased to announce that it has amended the terms of the purchase and sale agreement ("PSA") with Dove Energy B.V. ("Dove") for the purchase of CMI Energia SpA ("CMI") (the "Acquisition") as announced January 6, 2015. The revised terms have facilitated Avanti's leveraging of the CMI assets to finance the acquisition and to secure a carried interest through the field development permitting.
CMI owns a 90% working interest in a natural gas permit covering 35.72 square kilometers onshore in Central Italy, including an application for the conversion of the natural gas discovery in the permit into an exploitation concession (the "Project"). The permit area includes two new wells, along with other older wells, that have fully delineated the field limits and reserves. The two new wells tested combined production in excess of 20,000 Mcf/d (3,333 barrels of oil equivalent (boe)/d). As of December 31, 2014 CMI has Net Proved Reserves of approximately 52,597 mmcf natural gas; and Net Proved plus Probable Reserves of 61,293 mmcf. These figures are based on a detailed independent reserve report commissioned by Avanti dated February 27, 2015 from Chapman Petroleum Engineering Ltd.
Under the terms of the amended PSA, the Company is acquiring CMI for a cash payment of US$1.53 million and 12,970,000 common shares of Avanti valued at $0.30 per share. In addition, Dove will retain a 15% working interest in the Project.
Concurrent with closing of the Acquisition, Avanti has arranged for a syndicate of investors to acquire a 41.66% working interest in the Project for US$1.43 million, plus the commitment of US$1.3 million to finance the 2015 operating budget for the Project. The operating budget is designed to complete the development work and engineering required to secure a production concession from the Italian authorities.
At the conclusion of the above transactions, CMI will be owned by Avanti, CMI will remain the operator of the Project and CMI will retain a 33.33% working interest in the Project - carried through the expected costs of permitting.
"Italy has a long history of oil and gas production and with recent legislative changes to encourage industry investment, now is the perfect time to enter the market. Avanti is very excited about applying its operating skills to what will be the second largest onshore gas development project in Italy in the past twenty years. Avanti looks forward to working closely with local, regional, and national stakeholders to develop the field using state of the art technology, while creating meaningful and sustained economic benefit. We expect Italy to remain a high value gas market over the next decade, given the potential for supply disruptions from North Africa or Russia" stated John McIntyre, CEO.