re: things getting better all the time with krz

  1. 115 Posts.

    Finalises Petroasia Agreement

    Document date: Mon 28 Apr 2003 Published: Mon 28 Apr 2003 12:01:42
    Document No: 136428 Document part: A
    Market Flag: Y
    Classification: Progress Report

    HOMEX - Adelaide

    Kalrez Energy Limited is pleased to finally advise that all formal
    documentation with respect to the purchase of the balance of
    Petroasia Limited not owned by the company was executed on the 23rd
    April 2003.

    As from the 23rd April 2003 Petroasia Limited is a fully owned
    subsidiary of Kalrez Energy Limited.

    Kalrez earlier made an ASX Announcement on 9th January 2003
    confirming the company had entered into a Sales Agreement with
    Petroasia Group Limited to purchase the balance (25%) of Petroasia
    Limited it did not own for AUD$1.00 (one Australian dollar).

    However, though all legal documentation was agreed on 24th January
    2003, the Principals of Petroasia Group refused to proceed with the
    execution of the Sales Agreement until such time as the company
    entered into a satisfactory Termination Agreement with Kalgoorlie
    Mine Management Pty Limited ("KMM") with respect to KMM's Management
    Agreement with Kalrez Energy Limited.

    Though KMM held a five year Management Agreement with Kalrez,
    following the company's AGM on 28th November 2002, and changes to
    the composition of the Board, the new Board decided to not employ the
    services of KMM as Manager of the company.

    The Management Agreement that the previous Board had entered into
    with KMM gave KMM considerable powers, and in the event of
    termination substantial leverage. In the event of any type of
    termination by the company the Management Agreement gave rights to
    KMM to recover not only the management fee, but all "future" expected
    costs and expenses (based on past expenditure).

    The company and KMM have entered into a commercial settlement which
    resulted in a formal Termination Deed being executed simultaneously
    with the Petroasia Sales Agreement.

    The settlement consists of a payment of $160,000 to KMM in
    consideration of all charges, fees, and claims KMM may have in
    respect to the early termination of the Management Agreement. The
    company considers this to be a sizeable discount to the possible
    exposure the company had in this matter.

    The final acquisition of the balance of Petroasia Limited and the
    termination of the KMM Management Agreement is of relief to the
    company and brings corporate certainty to the company's future.

    In September 2000, Kalrez entered into a Sales Agreement with
    Petroasia Group Limited to purchase 75% of Petroasia Limited for an
    ascribed value (cash and shares) of approximately AUD$2.22 million
    dollars. (Note Kalrez's announcement 25th September 2000).

    Petroasia Limited's only asset was, and still is, the LTS Gas Plant
    originally from WAPET, Barrow Island, which is presently in
    protective storage in Jakarta.

    The company's original plan was to seek gas production plays in
    Indonesia, but with the down turn in certain areas of Indonesia the
    opportunities have been limited.

    The purchase of the 25% balance of Petroasia Limited brings about
    definite certainty in the company's actions with respect to the gas
    plant, as the September 2000 Sales Agreement had trigger clauses
    which restricted the company, and would have exposed the company to
    issuing shares to the value of $1,500,000 should even minor sales of
    parts of the gas plant occur.

    In recent days the present Board gained legal opinions on the
    enforcement of the 2000 Sales Agreement trigger clauses, which
    resulted in the opinion that the trigger clauses were enforceable
    should even minor events take place. There was no release from the
    trigger clauses even if the plant was sold for scrap.

    The present Board considers the execution of both the KMM Termination
    Deed and the Petroasia Sales Agreement to be prudent commercial
    exercises from which the company will gain in the future.

    hey old man river wont be long before we start making serious money here with all that oil and maybe gas as well soon:)

    JOHN ^_^
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