Abacan Announces Settlement and Restructuring.HOUSTON--(BUSINESS WIRE)--July 7, 1998--Abacan (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ABACF) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. .) Abacan Resource Corporation, (TSE: "ABC", NASDAQ: "ABACF"), announces that its wholly-owned subsidiary Liberty Technical Services, Ltd. ("Liberty") has reached a settlement agreement with its Nigerian partner Amni International Petroleum Development Company Limited ("Amni") respecting the IMA (Interactive Multimedia Association, Annapolis, MD) An earlier trade association founded in 1988 originally as the Interactive Video Industry Association. It provided an open process for adopting existing technologies and was involved in subjects such as networked services, scripting Field located on Nigerian Concession OML OML Object Manipulation Language (ODMG) OML Ordinary Maternity Leave (UK) OML Order of Merit List OML Orquestra Metropolitana de Lisboa (Portugese) OML Oil Mining License 112 (formerly OPL OPL Open Publication License OPL Olympus Product Line (Sun) OPL outer plexiform layer OPL Organiser Programming Language (PSION) OPL On-Premise Laundry OPL Optical Path Length OPL Open Public License 469) and OPL237. Under this agreement, Amni and Liberty have agreed to restructure their joint venture relationship. Liberty will relinquish all rights and interests with respect to the "shallow" zones located in the IMA Field on OML112/OPL237. The "shallow" zones encompass all of Liberty's share of current production. In exchange Amni will (1) assume outstanding claims against Liberty (including trade claims) related to the IMA Field and (2) assume all lease obligations related to the service providers to the IMA Field. In addition, Amni will forgive its claims against Liberty and release to Liberty any interest in the Langley (described below). Liberty will retain a 10 percent working interest in the "deep IMA prospect" which was previously encountered by the IMA No. 9 well. Utilizing dedicated proceeds from certain insurance claims, Amni and Liberty expect to drill a well to test this prospect in the near future. Concurrent with its agreement with Amni, Liberty has exchanged the topside equipment on the Mobile Offshore Production Unit, the "Langley", in a transaction with Schlumberger Overseas S.A. and Total International Limited. Under the terms of the exchange, Liberty will convey the topside processing equipment on the Langely to Schlumberger in return for (1) the extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of all debt to the Schlumberger Group and (2) a restructuring of the Total-Credit Suisse/First Boston loan (the "Loan") with a future credit thereon as described below. As restructured, the Loan in the approximate amount of $30,700,000 continues with Abacan and Schlumberger has agreed to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose the Langley with approximately 40 percent of the proceeds from such disposition to be applied against the outstanding principal balance on the Loan. The Loan will be due in 12 to 18 months. The first interest payment is due in six months with interest-only due thereafter until maturity. Abacan is pleased with the outcome of these extensive negotiations because it benefits all of Liberty's creditors by reducing Liberty's debt by $73,000,000, with additional future debt reduction to occur at the time of the disposition of the Langley. It also allows Abacan to better focus on the recently announced venture to develop a gas fired electrical power generation plant in the Republic of Benin and exploit its extensive inventory of exploration concessions in the Benin Basin. Certain statements in the News Release constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.
CONTACT: Abacan Resource Corporation
Timothy Stephens, 281/721-0552
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