Sky Petroleum, Inc. (OTCBB: SKPI), an oil and gas company with activities in Albania and the United Arab Emirates, announced today that it has agreed to obtain loans through the offer of 8% Convertible Promissory Notes due January 8, 2014 (the “ Notes ”) in the aggregate amount of up to US$1,000,000 (the “ Offering ”). The Notes are convertible into shares of common shares of the Company (“ Common Shares ”) at a conversion price of US$0.25 per share (the “ Conversion Price ”) and interest on the Notes is payable in cash or, at the option of the Company, in-kind in Common Shares at the Conversion Price.
The Note proceeds will be primarily used for the development of the Production Sharing Contract (“PSC”) with respect to the three exploration blocks, Four, Five and Dumre and to pay certain fees, expenses and obligations in connection with the arbitration related to the dispute with the Ministry of Economy, Trade, and Energy of Albania, acting by and through AKBN regarding the Company’s PSC.
The Notes offered by Sky Petroleum have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold absent applicable exemptions from such registration requirements. The Notes were offered and sold outside the United States to non-U.S. persons in reliance upon exemptions from the registration requirements of the Securities Act. This press release does not constitute an offer to sell or a solicitation to buy securities or the notes.
Exploration Blocks Four, Five, and DumreThe PSC has a seven-year term with three exploration periods. Upon commercial discovery of gas, the agreement allows for development and production periods of 25 years plus extensions at the Company’s option. Block Four is located in southeast Albania, bordering on Greece; Block Five is located in south west Albania next to the Adriatic Sea; and Block Dumre is located immediately north of the Kucova oil field. Based on analogous discoveries, it is believed that the prospects contain significant hydrocarbons.