BULA Resource's new exploration project in Libya holds very "exciting" prospects for the company, according to the chairman, Mr Jim Stanley.
Speaking to shareholders at the annual general meeting in Dublin yesterday, Mr Stanley said on the back of the deal, two of Bula's major institutional shareholders, Morgan Grenfell and Capital International, had increased their interest in the group.
Capital International had increased its holding from 112 million shares to 162 million, raising its stake in the group to 10 per cent. Morgan Grenfell increased its holding from 112 million shares to 193 million, representing close to 12 per cent of its issued share capital.
On Thursday, Bula said it had agreed an exploration and production sharing agreement with the national oil corporation of Libya covering two blocks in the Sirte Basin and one block in the Ghadames Basin. Bula also agreed to join an international Canadian oil corporation in exploring for hydrocarbons on the blocks. Bula has stated that its investment in Libya will not be affected by the recent US sanctions to be imposed on investments of more than $40 million (£25 million) a year in Iran and Libya's oil and gas industries.
Meanwhile, shareholders overwhelmingly voted to remove its two Russian directors from the board of the company. More than 100 shareholders voted down a resolution to re-elect Mr Alexander Marichev and Ms Tatyana Kirillova to the board of directors. The proposal, which the company was obliged to put to shareholders for technical reasons, was unanimously passed.
The two directors, who are major shareholders in a former partner company, Russian Corporation, had agreed to resign from the board following agreement of a settlement with Bula which is likely to cost the company around £8 million.
Responding to shareholders questions on the settlement, Mr Stanley said the company was still considering its options on whether it would take any action against the legal advisers which had acted for the company in the controversial Russian deal. "We are keeping all options open.
Mr Stanley said that, following the settlement, it had continued to make progress in negotiations on the exploration of the Aki-Otyr oil fields in Russia, over which the dispute with the Russians arose.
The company has overcome certain mechanical problems encountered in the drilling of well 705 in the Salymskoye Oilfield and drilling on its second well in that field has been successful to date, he said.
