Independent close to extracting revenue at East Ghazalat

Independent Resources was moving closer to extracting revenue from its East Ghazalat concession in Egypt on Tuesday, as it updated the market on the project’s recent developments.

The firm holds a 50% share in East Ghazalat, along with fellow AIM-traded company Nostra Terra Oil & Gas.

Its board said it was continuing to make progress on the registration process with the Egyptian government, which will allow it to receive its share of revenues from the concession from 1 July.

Independent confirmed it was still in dispute with North Petroleum International, the operator of East Ghazalat, but said it was still entitled to its share of revenues notwithstanding the dispute.

“[The company] will receive directly from Egyptian General Petroleum Corporation its shares of revenue from East Ghazalat,” Independent’s board said in a statement.

“We will make a further announcement on completion of those formalities.”

As part of the terms of the acquisition of the concession as announced in October, Independent issued a $2.5m loan note to vendor TransGlobe Petroleum International, repayable by 30 September 2017.

Independent is jointly and severally liable with Nostra Terra for the loan note.

“The amount to be repaid to TransGlobe pursuant to the terms of the loan note is subject to adjustment to reflect East Ghazalat's working capital position on 30 June 2015, together with the net cash flow attributable to the assets from 30 June 2015 until the 14 October 2015, the date of completion of the acquisition,” Independent’s board confirmed on Tuesday.

“The scale of the adjustment has not yet been agreed.”