By OGJ editors
HOUSTON, Nov. 18 -- Ivanhoe Energy Inc. said its Asian subsidiary plans to acquire interest in a production-sharing agreement (PSA) held by PanAsian Petroleum Inc., which holds exploration and production rights to a large block in central Mongolia.
Ivanhoe’s Sunwing Energy Ltd. plans to acquire interest in PanAsian's Mongolian interests for up to 3 million share of Ivanhoe common stock. Transaction terms do not involve any cash payment to PanAsian.
A private company based in Alberta, PanAsian has a PSA with the Petroleum Authority of Mongolia. The contract provides PanAsian with the exclusive right to explore, develop, and produce oil or gas within Block XVI in Mongolia's Nyalga basin.
The structure of the merger is such that the holder of the PSA, PanAsian Energy, and its wholly-owned Mongolian subsidiary, Shaman LLC, remain unaltered.
PanAsian has invested $4 million in the acquisition and development of Block XVI, which covers 16,839 sq km and contains four subbasins. The target is light oil, Ivanhoe said.
A Russian driller initially explored part of the block in the 1950s, and the area was included in a regional appraisal conducted by BP International for the Mongolian government in 1990.
Photo from Odfjell Drilling.
