Interoil Exploration and Production ASA Colombian subsidiary ("Interoil") is pleased to provide an update on the guarantee for LLA-47.
The Colombian regulatory entity, the Agencia Nacional de Hidrocarburos ("ANH"), has issued a new rule for O&G companies with investment commitments in the country regarding the guarantees that must be put in place to support their licence obligations.
After consultation with its local lawyers, Interoil's understanding of this new resolution, is that O&G companies' commitments for each phase will be divided into three segments, the first of which shall be guaranteed in an amount equal to the 10% of the aggregate outstanding commitment for the first segment; 20% for the second segment and 50% for the third segment.
Interoil's additional investment commitment for LLA 47 for the second segment of the current phase is US$24,000,000. Based on Interoil's interpretation of the provisions of the new resolution, Interoil would be required to provide a guarantee of US$4,800,000, equivalent to 20% of its additional investment commitment, to satisfy its guarantee obligations. Interoil has already provided guarantees totalling US$10,800,000 for LLA 47.
The new resolution issued by the ANH, therefore, should reduce Interoil's current guarantee exposure and avoid the need for Interoil to issue any further guarantees during the second segment of this phase.
After discussions with its local lawyers, Interoil has presented a letter to the ANH requesting a reduction in the amount of the guarantees currently in place consistent with the provisions of this new resolution.
Interoil Exploration and Production ASA is a Norwegian based exploration and production company - listed on the Oslo Stock Exchange - with focus on Latin-America. The Company is operator of several production and exploration assets in Colombia. Interoil currently employs approximately 95 people and is headquartered in Oslo.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.