View:
BONTAN CORPORATION INC.
47 Avenue Rd. Suite
200
Toronto, ON MR
2G3
T: 416-929-1806 F:
416-929-6612
PRESS RELEASE
March 26th,
2010
NEWS
RELEASE
BONTAN
CORPORATION PARTNERS WITH MAJOR ISRAELI INVESTORS TO RAISE US$16 MILLION OF NEW
CAPITAL FOR
ISRAEL
OFFSHORE NATURAL GAS EXPLORATION PROJECT
Toronto, Ontario, March 26,
2010 – Bontan Corporation Inc. (OTCBB: BNTNF) is pleased to announce that
it and its indirect majority-owned subsidiary, Israel Petroleum Company, Limited
(“IPC”), entered into an agreement on March 24, 2010 (the “Agreement”) with Tel
Aviv-based Emanuelle Energy Ltd. (“Emanuelle”) and IDB-DT Energy (2010) Ltd.
(“IDB-DT”) for approximately $16.1 million of new
financing to assist in further developing the natural gas exploration
project offshore from Tel Aviv, Israel (the “Project”).
The
Agreement also settles the litigations amongst IPC, PetroMed Corporation
(“PetroMed”), Bontan and their respective affiliates relating to ownership of
the 95.5% interest (“PetroMed’s Share”) in the “Sarah” and “Myra” drilling
licenses (the “Licenses”), and the now expired “Benjamin” drilling permit (the
“Permit”), acquired by IPC from PetroMed in November 2009.
PetroMed’s
Share in the Licenses is currently listed in PetroMed’s name on the registry
(the “Registry”) maintained by the Israel Ministry of National Infrastructures
(“MNI”). Conditioned on the MNI’s transfer approval, IPC, Emanuelle
and IDB-DT will receive respective working interests on the Registry of 14.325%,
54.025% and 27.15% in the PetroMed’s Share of the Licenses and the
Permit.
Bontan’s
working interest in PetroMed’s Share of the Licenses and Permit is 11% held
through its holding of 76.8 % equity interest in IPC.
As part
of their working interest acquisition, Emanuelle and IDB-DT agreed to contribute
approximately US$ 16.1 million of which approximately US$ 10.5 million will be
paid to WesternGeco, a geophysical services firm and a subsidiary of
Schlumberger Limited, for joint title with IPC for the delivery of
2-dimentional data, and for the processing an estimated 11 weeks of
3-dimensional geophysical mapping data on the License sites; these were shot and
completed in November 2009 (the “Data”). The MNI required the Data to be
submitted by April 1, 2010 as a condition of the Licenses and will need to agree
to an extension of the due dates under the Licenses for the submittal of the
Data in order for the Licenses to be maintained. The balance of
approximately US$ 5.6 million will be used for operational needs and for the
benefit of PetroMed’s creditor’s through a Trust.
The terms
of the agreement also include a commitment by all parties to seek reinstatement
of the Benjamin permit and the conversion of the permit to one or more drilling
licenses for the joint benefit of the parties.
1
PetroMed agreed
to the cancellation of the 8.6 million shares of Bontan common stock, and
the 22.8 million Bontan common stock warrants, issued to it as part of the
consideration for the transfer of PetroMed’s Share in the Licenses and Permit to
IPC in November 2009. PetroMed will retain the $1 million cash
payment made by IPC.
Kam Shah,
CEO of Bontan, commented, “This is a very significant milestone for Bontan,
partnering with strong local Israeli partners like Mr. Nimrodi and Mr. Sultan
will allow this world class gas exploration project to advance to the next
stage. This is particularly timely in light of the new March 2010 MNI
regulations requiring applicants for offshore projects to demonstrate the
financial capability to cover the full estimated cost of their initial project
work program and half the estimated drilling cost per offshore well, as well as
experience in operating large oil and gas exploration projects. We
also believe that settlement of the PetroMed litigations will enhance our joint
request to the MNI for official re-registration of PetroMed’s Share in the
Licenses in IPC’s name and that of our other partners. After the 3-dimentional
data is processed and analysed, we expect to be in a position to begin the
preparation leading up to the drilling of wells with an international operator.
We look forward to a very successful partnership with our new
investors.”
About
the Project Area
The
Licenses cover approximately 310 square miles and are located in the Levantine
Basin near the recent Tamar 1, Tamar 2, and the Dalit natural gas discoveries.
The wells were drilled by Noble Energy Inc. (NBL.NYSE), in partnership
with Delek Energy Systems (DEOL.TA), Isramco (ISRA.TA) and Avner Oil and Gas LP
(AVNR.TA). The wells have a reported 6.8 TCF (1.02 BBOE) of estimated
proved, probable and possible reserves in their licensed area, making these
wells the second largest gas discovery in the world since January
2008. South of the Licenses’ area is the existing Mari-B field, also
drilled by Noble, Delek and Avner, which contains a reported 1 TCF (150 MBOE) of
estimated proved, probable and possible reserves.
Chapman
Petroleum Engineering Ltd, an independent Calgary based consulting firm (http://www.chapeng.ab.ca/) prepared
a Prospective Resource Evaluation Report , effective January 1,
2010 in accordance with National Instrument 51-101, Section 5.9
standards for review and assessment of prospective resources , which provided a
low estimate of 5.71 TCF and high of 7.34 TCF of gross prospective resources on
the Sarah /Myra prospects.
2
About
Emanuelle Energy Ltd.
Ofer
Nimrodi controls Emanuelle and is the chairman of managing director of publicly
traded Israel Land Development Corporation (TASE: ILDC).
About
IDB-DT Energy (2010) Ltd
IDB-DT is
a joint venture of IDB Development Corporation Ltd. (affiliated with Avraham
Livnat Company) and Du-Tzah Ltd. (affiliated with Manor Holdings and Yitzak
“Zachi” Sultan). Avraham Livnat Company and Manor Holdings, purchased
47.5% of all Noya Oil and Gas shares as well as ½ of all participation units
held by Noya including a 70% stake in the Gabriella License, a 15% interest in
the Zurim License, and a 7.5% interest in the Carveout Halamish
License.
IDB was
recently ranked by leading international institutions as Israel’s largest top
tier leading diversified business group in Israel with assets totalling over
US$30 billion. IDB has subsidiaries in over 100 countries with over
40,000 employees. Yitzak “Zachi” Sultan, the owner of Noya Oil
and Gas, is the chairman of Clal Finance Underwriting (CFU), the leading
underwriter and investment banker in Israel with 50% of the total
market. In 2009, CFU raised over 30 billion Shekels (US $8.4
billion).
About
Bontan Corporation Inc.:
Bontan
Corporation Inc. is an oil and gas exploration company that operates and invests
in exploration prospects. Through its subsidiaries, Bontan seeks
highly visible opportunities in countries around the globe with a history of
natural resource production that offer exciting and attractive
propositions. Bontan seeks to minimize risk by bringing in either
joint venture, carried or working interest partners, depending on the size and
scale of the project.
Bontan
will have 60,284,076 common shares issued and outstanding after cancellation of
Petromed shares as above.
For
further information, refer to our website www.bontanoilandgas.com and
contact Bontan’s investor relations representative, John Robinson at Current
Capital Corp., at (416) 860-0211.
3
Forward-Looking
Statements
This news
release includes forward-looking statements within the meaning of the U.S.
federal and Canadian securities laws. Any such statements reflect
Bontan’s current views and assumptions about future events and financial
performance. Bontan cannot assure that future events or performance
will occur. Important risks and factors that could cause actual
results or events to differ materially from those indicated in our
forward-looking statements, include: the effect of economic and
political developments in Israel; the discretion of the MNI to
cancel, extend the time for compliance with or otherwise waive requirements of,
the Licenses or to reinstate the Permit; the discretion of the MNI to
officially transfer the Licenses on the Registry to IPC and our other
partners; the effect of the continuing litigation with East
Mediterranean Exploration Co. on our rights to the Licenses and the now expired
Permit; the reliance on Emanuelle, IDB-DT and IPC, as well as
third-party consultants and contractors, to develop the Project; the
ability of Bontan and IPC to raise sufficient capital and demonstrate adequate
financial capability to the MNI, and the associated dilution to current
investors’ interests associated with the issuance of additional debt and equity
securities; the risk that the Data may show or suggest, or that the
License sites ultimately may contain no, or limited amounts of,
hydrocarbons; the volatility in commodity prices for crude oil and
natural gas; the presence or recoverability of estimated
reserves; the potential unreliability or other effects of geological
and geophysical analysis and interpretation; exploration and
development, drilling and operating risks; competition for
development of the Project; environmental
risks; government regulation or other action; potential
disruption from terrorist activities or warfare in the region or at the Project
site; general economic conditions; and other risks we
identify from time to time in our filings with the U.S. Securities and Exchange
Commission and securities regulators in Canada. Bontan assumes no
obligation and expressly disclaims any duty to update the information in this
Press Release.
--0830928.01
4