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Romgaz will pay over 12 mln dollars to be partner of Petrom and Exxon in Black Sea block

ROMGAZ will pay over 12 million dollars if it enters ExxonMobil - OMV Petrom partnership for exploration and development of Midia block in the Black Sea , but has this right only if commercial deposits are discovered there, Romgaz floating prospectus informs.

On February 13, 2013 Romgaz signed an agreement with OMV Petrom and Exxon, according to which the state-held company has the option to acquire 10 percent in the deep-water exploration Midia block in the Black Sea.

'At the moment when taking this option, Romgaz has to pay an initial amount of 9 million dollars and, after the first commercial production, another 3 million dollars plus 10 percent of the total exploration costs incurred by ExxonMobil and OMV Petrom until the date of notification of the commercial discovery, plus an amount representing the interest calculated from the time of making the exploration costs and until the payment by the company ( Romgaz - editor's note). Development costs Romgaz has to contribute, starting with 2016, are estimated at 10 million dollars', the prospectus also informs.

Exxon and Petrom bought in October 2012 the concession rights on this block from Sterling Resources - Petro Ventures Europe consortium. The acquisition has not been completed, still waiting to be approved by the Government.

According to the leaflet, Romgaz has the right to take the option of purchasing 10 percent of this block within two months since receiving a notification from Exxon and Petrom on the fact that the two companies discovered commercial deposits in this block and notified the National Agency for Mineral Resources in this regard.

'The option contract provides that, if there is a change of control over the company, following which the company is controlled by an entity that ExxonMobil and OMV consider, by mere appreciation, as impeding commercial relations and/or having conflicting interests, then ExxonMobil or OMV Petrom, as appropriate, shall be entitled to terminate the option contract', the listing prospectus also reads.

At the same time, Romgaz holds 10 percent in two other blocks in the Black Sea, Trident and Rapsodia, where Lukoil has a participation of 72 percent and Vanco International - 18 percent.

The Initial public offering of 10 percent of Romgaz will run from October 21 to 31, and the price range is 24-32 lei per share.