Paladin Resources PLC
9 August 2001
Paladin Resources plc
('Paladin' or 'the Company')
US$35 million Acquisition of Enterprise Oil Denmark Limited
Paladin announces that it has signed a Sale and Purchase Agreement with
Enterprise Oil Exploration Limited, a wholly owned subsidiary of Enterprise
Oil plc (together 'Enterprise'), for Paladin to acquire the entire issued
share capital of Enterprise Oil Denmark Limited ('EODL'), which holds all of
Enterprise's Danish oil and gas interests.
The consideration is US$35 million in cash subject to adjustments for
interest, for working capital as at the effective date of 1 July 2001 and for
cash flow movements in respect of the period between the effective date and
completion, which is expected to take place during the third quarter. The
consideration will be satisfied from existing bank facilities.
As a result of the acquisition of EODL, Paladin will hold the following
non-operated stakes in Danish fields and discoveries, all of which are
operated by Statoil:-
- a 20 per cent interest in the Siri Field. This field came on stream
in March 1999 and is currently producing at 29,000 barrels of oil per day
('bopd') (5,800 bopd net) with production forecast to continue until 2005;
- a 20 per cent interest in the Stine 2 Field. This field located
circa. 4 km to the east of the Siri platform was discovered by the Siri 4
exploration well in June 2001 and is currently being developed with an
extended reach development well from the Siri platform. This well is
forecast to produce at rates of circa. 9,000 bopd (1,800 bopd net) when it
is brought on stream in September; and,
- a 20 per cent interest in the Stine 1 oil discovery. This 1996
discovery, which lies circa. 9 km to the east of the Siri platform, has the
potential to be developed as an additional satellite to the main Siri Field
using a small monopod platform with one producer and one injection well.
Proven and probable reserves booked on acquisition as at the effective date of
1 July 2001 would be approximately 4 million barrels of oil and NGLs, with the
potential for significant future upgrades primarily from infill drilling on
the Siri Field and satellite development opportunities.
The acquisition is subject, inter alia, to the approval of the Danish
regulatory authorities and Paladin's shareholders.
An Extraordinary General Meeting of Paladin's shareholders will be convened in
due course. Further details of the transaction will be provided in a circular,
which will be mailed to shareholders in the near future.
Roy Franklin, Chief Executive of Paladin Resources plc commented:
'This is a natural addition to our Scandinavian business which will boost
Group production by some 25 per cent in 2002. The acquisition fits all
Paladin's criteria, offering attractive incremental investment opportunities
and the potential for significant reserve upgrades in the future.'
9 August 2001
Paladin Resources plc Tel: 020 7534 2900
Roy A. Franklin, Chief Executive
Cuth McDowell, Finance Director
College Hill Tel: 020 7457 2020