By the OGJ Online Staff
HOUSTON, Mar. 2�Carpatsky Petroleum Inc., Houston, Friday announced a letter of intent to acquire Lateral Vector Resources Inc., Regina, Sask., in a stock-for-stock transaction that will add Ukrainian oil assets to Carpatsky�s existing Ukrainian gas assets.
The deal is expected to close in May. Both companies� boards approved the deal, which remains subject to shareholder and regulatory approval.
In exchange for 100% of LVR's stock, Carpatsky will issue to LVR new shares of common stock representing 16% of the total Carpatsky shares outstanding on a fully diluted basis.
Robert Bensh, Carpatsky chairman and CEO, said "We are very excited about the acquisition of LVR as it is in line with our vision to develop Carpatsky into the largest independent, foreign operator of oil and gas reserves in Ukraine and Eastern Europe."
Carpatsky�s current assets are primarily gas fields. LVR�s primary asset is its interest in the Bugruvativske oil field, which Bensh estimated could cost up to $25 million to develop. He expects to have financing in place for field development by the third quarter.
Bensh said the acquisition will diversify Catpatsky�s portfolio, reduce its exposure to commodity risk and provide a product that is readily exported. The additional Ukrainian holdings also will broaden Carpatsky�s existing relationship with Ukrnafta, the state oil and gas company.
Carpatsky is developing the Rudovsko-Chervonozavodskoye and Bitkov-Babchensky fields in Ukraine. Carpatsky presently has working interests in eight wells with net production of 4 MMcfd of gas equivalent.
Bensh said, �We look forward to working with Ukrnafta and aggressively moving forward on a work program that develops the significant reserve potential of this field."