VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/20/13 -- Oculus Ventures Corporation (TSX VENTURE: OVX.H) ("Oculus" or the "Company") is pleased to announce that it has entered into a binding option agreement (the "Option Agreement") dated effective March 18, 2013 with Quest Oil & Gas Ventures Inc. to acquire an interest in an oil and gas exploration and production concession (the "Concession") covering an onshore area of 747km2 within the Emirate of Umm Al-Quwain, UAE. The rights to the Concession are held pursuant to a Petroleum Concession Agreement. Quest Oil and Gas Ventures Inc. is a wholly owned subsidiary of Quest Investments LLC, a private company incorporated in the U.A.E. whose founder, chairman and controlling interest holder is Mahmood Al Ansari, a U.A.E. national.
Pursuant to the Option Agreement, the Company has the right to acquire between a 59.5% and 85% equity shareholding in Quest's affiliate, UAQ Petroleum Limited, a Hong Kong company that holds the rights to the Concession pursuant to a Petroleum Concession Agreement with the Emirate of Umm Al-Quwain, United Arab Emirates. Quest will retain a working interest in the Concession, and will be a principal investor and will become the largest shareholder in the Company.
Pursuant to the Option Agreement, the Company holds an exclusive option (the "Option") to indirectly purchase 85% of the common shares of Quest's affiliate CanEmir Petroleum (UAQ) Corp. which in turn owns 70% of the common shares of UAQ Petroleum Limited. The remaining 30% interest is owned by a major international oil company ("IOC").
The IOC's 30% shareholding in UAQ Petroleum Limited is held under an agreement whereby the IOC can retain its 30% shareholding by reimbursing 100% of the costs of the Phase 1 and Phase 2 work programs on the Concession (as described below). In the event the IOC does not exercise its option to retain its interest in the Concession, the IOC's 30% interest will revert to CanEmir Petroleum (UAQ) Corp.
Based on the above, Oculus will acquire up to 85% of the rights in and to the Concession through its 85% shareholding in CanEmir Petroleum (UAQ) Corp. In the event that the IOC elects to retain its interest, Oculus' interest in the Concession will be reduced to 59.5% in exchange for the IOC reimbursing Oculus 100% of its Work Obligations (as described below).
The Company and Quest act at arm's length.
In order for Oculus to exercise the option and acquire an interest in the Concession, it must:
a. Issue and deliver to Quest 7,500,000 common shares in the capital of Oculus; andb. Assume the obligation to fund 100% of the phase 1 and phase 2 work programs on the Concession in accordance with the terms of the Petroleum Concession Agreement, to a maximum of US$17,500,000 (the "Work Obligations").
Following the exercise of the Option, Oculus and Quest will fund their proportionate share of all costs going forward.
The Company proposes to raise (conditional upon the acceptance by the TSX Venture Exchange ("TSXV") of the Option) on a non-brokered private placement basis concurrent with closing of the Option, a minimum of C$11,000,000 through the issuance of common shares in the capital of the Company (the "Private Placement") at a proposed price of C$0.50 per share. The proceeds of the Private Placement will be used to pay the costs of a Phase 1 exploration program, including a 250 km2 of 3D seismic to supplement existing seismic coverage over the Concession, a government signing bonus ($1,000,000), land rentals ($500,000 per annum), data interpretation costs, drilling preparation and general working capital purposes.