Transeuro Energy Corp announces the completion of the sale of the Company's four petroleum prospecting licenses (the "Licenses") in Papua New Guinea to Surge Resources Inc. ("Surge") together with all related geological, seismic, and technical data owned by the Company in relation to the lands represented by the Licenses (collectively, the "Assets"). Surge is an Alberta based public company listed on the NEX under the symbol "SRH". Surge will soon commence trading as a Tier 2 company on the TSX Venture Exchange.
As consideration for the Company transferring the Assets to Surge, Surge has issued to the Company 30,000,000 common shares (the "Consideration Shares"), with a deemed price of $0.85 per Consideration Share for a total deemed consideration of $25,500,000. The Consideration Shares will be subject to a three year value security escrow agreement under TSX Venture Exchange rules with an initial release occurring upon final TSX Venture Exchange approval of the transaction and further releases occurring every 6 months thereafter. Transeuro now owns approximately 53% of the issued and outstanding share capital of Surge and does not currently have any intention of acquiring more securities of Surge in the market.
Surge has agreed to grant the Company a pre-emptive right to acquire up to 50% of any securities to be issued by Surge pursuant to any financing of Surge involving the issuance of common shares or securities convertible into common shares completed within two years from the closing of the transaction. Further, Hal Hemmerich has been appointed President, CEO and to the Board of Directors of Surge and an additional nominee of the Company will be nominated by management of Surge for election as a director at the next shareholders' meeting. Additionally, the Company will be granted a "back in right" whereby, after Surge has drilled and tested three exploration wells on the Licenses, Transeuro may elect to acquire a 10% working interest in the Licenses by paying to Surge an amount equal to 10% of the exploration and development costs incurred up to that date with respect to the Licenses and agreeing, on a go forward basis, to pay 10% of the exploration and development costs incurred after that date.
Hal Hemmerich, Transeuro’s CEO and President, stated, "this transaction will benefit all of the Company's shareholders by unlocking the value of one of the Company's assets and expediting the exploration program on the Licenses".
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