SURREY, U.K., May 15, 2002 (PRIMEZONE) -- Emerald Energy Plc (LSE:EEN) announced that its wholly owned U.S. subsidiary Cobham Gas Industries Inc. has exchanged contracts for the sale of three of its five oil and gas fields in West Virginia and Pennsylvania to three local operators. The sales are conditional inter-alia on regulatory approval by the State of West Virginia, Division of Environmental Protection.
The sales comprise the New Martinsville, Belmont North and Belmont South fields, which together contain 244 wells and cover 13,829 acres. During the past year, sales of oil and gas from these fields were in aggregate U.S. $788,000 and resulted in a pre tax loss of U.S. $761,000. The proven developed and undeveloped reserves being sold amount to 4,779,000 barrels and require capital expenditure in excess of U.S. $8.0m to drill new drills to bring the undeveloped reserves on stream. The cash sale was at the written down book value of the assets as at December 31, 2001 of U.S. $1,200,000.
The proceeds of the sale will be applied to the development of Emerald's Latin American operations and the reduction of debt. Negotiations for the sale of the balance of Emerald's U.S. assets are well advanced.
Iain Alexander, Chief Executive, commented: "We announced in our recent Preliminary Statement our objective of disposing of our non-core interests to concentrate on South America and Colombia in particular. Proceeds from this sale combined with other actions being taken, will allow us to develop our substantial South American assets.
"Farm-in negotiations on our Matambo Association Contract as outlined are progressing and we remain optimistic for the future."