Ukraine Protec
Financing for Oil, Gas Projects
Protec Industries Inc. 8/26/2008
Protec Industries Inc. announced that, following the signed
agreements announced in last month's news release, the Company has
successfully arranged the financing for both Ukraine oil and gas
projects.
Protec has negotiated and signed a Farm-Out Joint-Venture (JV) Letter
Agreement with Eurofund Capital Management Co. Ltd. and a high-profile
3rd party whereby the Company's new JV partners pay 100% of Protec's
working interest to earn 50% of Protec's revenue share and an Option to
participate with Protec in any new oil and gas projects in which Protec
acquires an interest.
The JV requires Protec's new partners to issue an irrevocable "Letter
of Credit" (LC) for USD 30 million. The Parties have agreed to execute
a final Joint-Venture Agreement within 30 days, assigning Protec as
"Operator" of the Joint-Venture. As Operator, Protec will immediately
draw the first tranche of $1 million to begin funding the Ukraine
projects.
According to standard oil industry operating procedures, Protec will
receive AFE's from the Ukrainian operating companies (KrymTexasNafta
Ltd or "KTN" - Aktash Oil Field and EEU Ltd - Moshkarev Fields) based
upon pre-approved work programs and budgets. These properly executed
AFE's will serve as the basis for release of funds from the LC to
Protec and from Protec to its Ukraine operations.
The Company expects to complete all paperwork and transfer of funds in
time to conduct field operations, including the drilling of a new well
at Moshkarev, during the good weather season. With the cooperation of
KTN's Ukrainian partner, Protec also expects to immediately begin
remediation of the best oil wells at the Aktash field.
Protec is very enthusiastic about the Company's prospects for near-term
oil-production revenues from its Ukrainian oil and gas interests.
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