After receiving partial payment of CAD 0.2 million of a total transaction value of CAD 3.2 million (including CAD 0.1 million for granting an extension to Mercom Oil Sands Plc (“Mercom”) under Amendment #1), CAD 3 million remained unpaid by Mercom Oil Sands on the agreed latest Completion date of 31.7.2012. Mercom closed its IPO on 29.5.2012 and Mercom announced that they have raised their capital budget for the Chard operation program plus working capital needed. Despite this success, Mercom requested a further extension of 90 days from August 1st. The stated reason for Mercom’s request is that the newly employed CEO wants to further analyze the project. This was turned down by our Board of Directors. Our Board has, however, offered an extension of up to 60 days on payment of a further non-refundable deposit. So far Mercom Oil Sands has not accepted this, but will announce their decision after a board meeting later this week.
We are in dialogue with alternative local and potential contractors for execution of the work program. If the program is approved by the joint Operating Committee before 1st September the physical part of the work program can be executed at reduced prices now pre-season. The field activity costs increase considerably from 1st December until the end of March, states the interim Project Manager Garry Mihaichuk from Calgary.
Fredrikstad, Norway 7.8.2012
Nordic Petroleum AS
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