American International Petroleum Receives $2.9 Million Debenture and Warrants as Settlement for Litigation.Business Editors NEW YORK--(BUSINESS WIRE)--January 19, 2000 Settlement Provides $2.9 Million Cash Flow Over Two to Three Years American International Petroleum Corporation (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 NMS See NetWare Management System. : AIPN AIPN Association of International Petroleum Negotiators AIPN Australian Injury Prevention Network AIPN Advanced Industrial Property Network (Japanese Patent Office) AIPN Asian Industrial Property Network ) announced that it settled a lawsuit filed against Mercantile International Petroleum, Inc. ("MIP MIP See: Monthly income preferred security ") in July 1999. The Company received a secured $2.9 million 11 1/2% convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. that combines settlement of the lawsuit, which sought to recover approximately $1.6 million that was past due, and a remaining production earn-out obligation payment of $1.3 million that was current. MIP agreed to issue the Company a secured 11 1/2% convertible debenture for approximately $2.9 million. The new debenture replaces an old debenture of $1.6 million that was issued as partial compensation for the purchase of the Company's South American oil and gas reserves in February 1997, and $1.3 million, originally scheduled to be paid in three annual installments beginning February 2000, for a remaining oil production earn-out obligation for the purchase of the reserves. Beginning this month, depending on the level of MIP's oil production in Columbia, the debenture is to be repaid in monthly installments over an approximate two to three-year period, and is secured by oil production from MIP's Colombian subsidiary. The agreement calls for MIP's Colombian subsidiary to pay the Company the greater of $70,000 per month or 80% of its net income during the first year, and the greater of $80,000 per month or 80% of its net income thereafter, until the debt is retired. Additionally, the Company will be issued three-year warrants entitling it to purchase an aggregate of 2,347,000 common shares of MIP at various prices. American International Petroleum Corporation is a diversified petroleum company which, through various wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , is involved in oil and gas exploration and development in Kazakhstan, and in refining, marketing and transportation of refined products in the United States. The Company's wholly-owned subsidiary, American International Petroleum Kazakhstan, owns two licenses in the Republic of Kazakhstan: License 1551, the Shagyryl-Shomyshty gas field, in which it has a 100% interest, has technically proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. of 450 billion cubic feet of gas as independently estimated by Ryder Scott Co., and License 953, a 4.7 million acre exploration license, in which AIPC AIPC Androgen-Independent Prostate Cancer AIPC American Italian Pasta Company (Kansas City, MO) AIPC Aquidneck Island Planning Commission (Rhode Island) has a 70% working interest. On December 21, 1999 the Company entered into a protocol to form a joint venture for the financing and development of License 1551 in Kazakhstan with Tyumen Oil Company, one of the leading oil and gas companies in Russia. Statements herein may be identified as forward-looking for purposes of safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions under Section 21E of the SEC Act of 1934. Such statements relating to the Company's future business are subject to risks and uncertainties that could cause actual results to differ materially from those statements, and other risks and factors, identified in the Company's SEC filings. |
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