PEBERCAN INC. (The “Company”), (TSX: PBC) Pebercan announces that Cuban authorities, through Cubapetroleo S.A. («Cupet»), have notified its subsidiary Peberco Limited that Cupet wishes to prematurely terminate the production sharing contract, entered into in 1993 and scheduled to expire in 2018.
In light of this early termination of the production sharing contract and settlement of debts owed to Peberco for the sale of crude oil and in consideration of Cupet assuming all of Peberco’s obligations relating to its activities in Cuba, Peberco will receive a total net lump sum payment of 140M US$.
As well, and given the relationship between Peberco et Sherritt International (Cuba) Oil and Gas, the latter will receive its portion of the lump sum, equivalent to approximately 60M USD$.
Peberco and Cupet have entered into an agreement that provides for the transfer by Peberco of all of its rights to the benefit of Cupet, conditional to the acknowledgment of receipt by Peberco of the lump sum payment. The agreement stipulates that Cupet will assume all of Peberco’s rights and obligations, including taking charge of any Cuban personnel and assets required for oil and gas production, thereby discharging Peberco.
The agreement provides that the transfer and acknowledgment of the lump sum payment will be completed by mid February 2009. The company will recognize the depreciation of its assets in its first quarter financials of 2009.
Pebercan will examine future opportunities upon receiving the lump sum.
Pebercan is involved in the exploration, development and exploitation of oil reserves in the Republic of Cuba. Pebercan sells its entire production to the Cuban government but is not bound by any restrictions regarding the sale of its oil. The Company’s shares are listed on the TSX and trade under the symbol PBC.
Legal Notice—Forward-Looking Statements
Forward-looking statements contained in this press release involve known and unknown risks, uncertainties or other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We consider that these forward-looking statements are reasonable given the hypothesis on which they are based and which the Board of Directors of the Company has reviewed and ascertained as being well founded. Pebercan disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important additional information identifying risks and uncertainties is contained in the Company’s most recent annual and interim reports and forms filed with the applicable Canadian securities regulatory authorities.
For more information, please contact:
750 Marcel-Laurin Blvd., Suite 106, Saint-Laurent, Quebec H4M 2M4 - Canada
Tel.: 514 286-5200; Fax: 514 286-5177
RENMARK Financial Communications Inc.
Montreal - Tel: 514 939-3989 / Fax: 514 939-3717
Toronto – Tel. : 416 644-2020 / Fax : 416 644-2021
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