TORONTO, May 9 /CNW/ - Exile Resources Inc. ("Exile" or the "Corporation") (TSXV: ERI) has been notified by Aladdin Middle East Ltd. ("AME") that AME's Rubai exploration licences Nos. 2759, 2598, 2599, 2600 and 2601 (the "Rubai Licences") in southeast Turkey have been cancelled by the General Directorate of Petroleum Affairs of the Republic of Turkey ("GDPA"), for a failure to meet the district timing requirements for drilling. Exile has confirmed that the cancellation notification appeared in Turkey's Official Gazette on May 7, 2011. The cancellation order was signed by the Minister of Energy on April 26, 2011, but Exile had not been notified or provided with a copy of the order.
This unexpected development concerns Exile since the Rubai Licences were the farm-in lands associated with the AME farm-in signed in July 2010. Under the farm-in terms, Exile earns up to 35% equity in proportion to expenditures capped at $5.526 million in the five Rubai Licences. Exile had expected to earn this equity by mid-2011, associated with continued drilling on the Bostanci-1 well. As announced on April 28, 2011, Exile had spudded the Bostanci-1 well on April 24, 2011 on Licence 2600 in order to fulfill the district drilling requirement on the Rubai Licences.
The US$2.9 million invested to date by Exile under the AME farm-in has been invested in a well recompletion, new seismic, and drilling on Bostanci in the Rubai Licences. The Bostanci-1 exploration well had been undergoing pre-drilling work during March and April, and Exile had advanced US$1.525 million, representing its 50% share, to initiate drilling. Site preparation began in early March, the drilling rig was mobilized to the site in early April and the well was spudded on April 24, 2011. As a result of the latest developments, drilling has been suspended and the well is in the process of being temporarily abandoned.
Exile will be meeting with partners and the Turkish government officials in the coming days to clarify the situation, and develop next steps.
Exile will keep the market informed as more information becomes available.
ABOUT THE CORPORATION
Exile is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey, Nigeria and Zambia.
FORWARD-LOOKING INFORMATION
Forward-Looking Statements - This news release contains certain forward‐looking statements including, but not limited to: the Corporation's plans to seek remedies available to Exile with respect to the cancellation of the Rubai Licences, including its intention to re-apply for the Rubai Licences, and means to mitigate Exile's costs associated with the Rubai Licences.
These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Exile Resources Inc. including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of estimates, currency fluctuations, independent actions of its joint venture partners, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
Additional information relating to Exile is also available on SEDAR at www.sedar.com
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