YEP thus becomes a strategic investor in Magellan through the issuance to YEP of 8,695,652 shares and warrants to acquire an additional 4,347,826 shares . Magellan received today the gross proceeds of $10 million, which will be used for working capital and general corporate purposes.
Magellan’s President and Chief Executive Officer, William H. Hastings said, "It has been a long, but rewarding process in gaining our first successful equity investment closing. This is particularly true given the unprecedented external market conditions. This financing will provide an initial boost to the Company’s financial position as we pursue our strategic plan, the sale of our existing, uncommitted natural gas reserves and the operational reorganization of our producing fields in the Amadeus Basin."
YEP’s chairman, Nikolay V. Bogachev, is pleased about the transaction as it adds a new dimension to YEP’s investment portfolio allowing it to become a truly global player in the Energy business with oil and gas assets in Western Africa, Russia, the United States and now in Australia.
Edison Capital Partners s.a., the company founded by YEP’s former CFO, Patrick Hansen and Knut Reinertz, advised on how to raise the financing necessary to close the transaction. ‘This has been a challenging project for us, as we were called in very late in the game. The financing environment is still terrible and to raise 10 Mio $ within a short period of time was quite a task, as banks are still reluctant to provide credits and loan-to-value ratios are terribly low. The most important point is that we managed to assist YEP to close this strategic investment’ says Knut Reinertz, CEO of Edison Capital Partners.
About Magellan
Magellan’s common stock is quoted on the NASDAQ Capital Market (symbol: MPET) and on the Australian Stock Exchange in the form of CDI’s (symbol: MGN). The Company is engaged in the sale of oil and gas resulting from the exploration for and development of oil and gas reserves. Magellan’s most significant asset is its 100% equity ownership interest in Magellan Petroleum Australia Limited ("MPAL").
About YEP
YEP was founded in 2007 by recognized entrepreneur Nikolay V. Bogachev, who has had partnerships with Enterprise Oil (now Shell), Marathon Oil, and other major oil companies in developing earlier investments. YEP is building a portfolio of energy investments worldwide with current efforts within the Western United States, in West Africa, and now, in Australia.
Forward-Looking Statements
Statements in this release which are not historical in nature are intended to be, and are hereby identified as, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. These statements about Magellan and MPAL may relate to their businesses and prospects, revenues, expenses, operating cash flows, and other matters that involve a number of uncertainties that may cause actual results to differ materially from expectations. Among these risks and uncertainties are pricing and production levels from the properties in which Magellan and MPAL have interests, the extent of the recoverable reserves at those properties, the future outcome of the negotiations for gas sales contracts for the remaining uncontracted reserves at both the Mereenie and Palm Valley gas fields in the Amadeus Basin, including the likelihood of success of other potential suppliers of gas to the current customers of Mereenie and Palm Valley production.
In addition, MPAL has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. Any forward-looking information provided in this release should be considered with these factors in mind. Magellan assumes no obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.