Adira Farms Out 25 pct of Interest in Yitzhak License Offshore Israel

Adira Energy Ltd.  has entered into a series of agreements to farm-out part of its interest in the Yitzhak license (the “License”) to strengthen its operating and business profile in the License and to reduce its working interest from 85% to 60%.

Adira has entered into a Farm-out Agreement with the AGR Group , to farm-out 5% of the working interest in the License to AGR.  Subject to the terms and conditions set out in the said Farm-out Agreement, in the event Adira solicits a strategic investor into the License, AGR will reduce its working interests pro rata to the entry of such investor. Pursuant to the agreement, AGR will be designated Lead Operator in accordance with Israeli regulations defining “Operator”, with the continued involvement of Adira as Co-operator. In addition, AGR has been appointed as engineering services contractor on the License with continued involvement of Adira as part of the core professional team led by AGR.

The Company has also entered into a Farm-out Agreement with Ellomay Oil and Gas 2011 LP, a limited partnership (“Ellomay”) whose general partner is a wholly-owned subsidiary of Ellomay Capital Ltd. (“Ellomay Capital”), to farm-out 20% of the working interest in the License to Ellomay. Pursuant to the Agreement, Ellomay will reimburse Adira for its proportionate share of the costs incurred by Adira to date of closing, plus interest at LIBOR + 1%. Ellomay will also pay Adira a 3% ORRI on Ellomay’s share of revenues from sold petroleum, until repayment of Ellomay’s expenditures in the work program plus interest (LIBOR + 1%) and 4.5% ORRI from that date forward. Subject to the terms and conditions set out in the said Farm-out Agreement, in the event Adira solicits a strategic investor into the License, Ellomay will reduce its working interests pro rata to the entry of such investor.

In addition, Adira has formalized a Letter of Intent with Brownstone Energy Inc. (“Brownstone”) in respect of the License, enabling the formal registration of Brownstone’s 15% working interest, in the Petroleum Registry.

[mappress]
Offshore Energy Today Staff , December 5, 2011