CGX Energy provides operational update
As previously announced, on April 18, 2016, the Company entered into a term sheet with a potential partner in respect of the Company’s wharf and logistics yard located in Berbice, Guyana (the ‘Berbice Port Project’). Pursuant to the Term Sheet, as amended, the Company provided the Partner and its advisors a seventy-five day exclusivity period within which to conduct further due diligence and to allow the parties time to negotiate definitive documentation. The Term Sheet was amended to extend the Exclusivity Period until August 20, 2016. Following the expiry of the Exclusivity Period, the Company lost confidence in certain counter parties to the Term Sheet for several reasons, including the Company’s inability to confirm the financial capacity of the funding parties to complete the transaction proposed by the Term Sheet. After subsequent discussions, the parties agreed not to enter into a definitive agreement at this time. In connection with the granting of the Exclusivity Period, the Company received U.S.$50,000 as non-refundable deposit as part of the Term Sheet.
Serafino Iacono, Co-Chairman of the Company, commented:
‘Unfortunately, we abandoned the proposed transaction for a number of reasons, including as a result of the Partner not being able to demonstrate the financial wherewithal to complete the purchase of the assets and fund the requisite capital expenditures required under our proposed partnership. Ultimately, the Company could not risk entering into a definitive agreement with a partner that could not demonstrate a baseline ability to meet their financial commitments under the proposed terms of the transaction.’
The Company is now actively seeking a new partner to help in the development of its Berbice Port Project. The Berbice Port Project consists of: (i) 15.6 acres freehold land asset containing an existing logistics yard; and
(ii) a 50-year land lease from the Government of Guyana for a 55 acre property near the mouth of the Berbice River. The objective of purchasing this land was to build a deep sea port to service the offshore oil and gas exploration industry in the Guyana-Suriname Basin (the ‘Berbice Port Project’).
The Company currently has interest from several parties and is seeking to enter into a definitive agreement in respect of the Berbice Port Project by year-end. For more information on the Berbice Port Project, please see the Company’s website at: www.cgxenergy.com.
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