Petromanas Energy Inc. has successfully completed its previously announced definitive farm out agreement with a wholly owned subsidiary of Royal Dutch Shell plc following the Albanian government's approval of the assignment of interest to Shell. Under the terms of the agreement, Shell will farm into the Company's rights on exploration Blocks 2-3 (the "Blocks") comprising approximately 852,000 acres onshore Albania. Shell is acquiring a 50% participating interest in the Blocks in exchange for payments and carried costs up to US$50.3 million. Petromanas continues to act as operator of the Blocks. Additionally, the Company has been notified that the Albanian government has approved construction permits for road and lease construction on the Blocks at the Shpirag-2 and Juban-1 drilling locations.
"Receiving these government approvals removes the critical barriers in executing the Company's 2012 business plan. Closing the Shell farm-out agreement sets the stage for our continued close collaboration with Shell," said Mr. Glenn McNamara, CEO of Petromanas. "Receipt of the construction permits allows us to immediately commence road and lease construction and we expect to spud the Shpirag-2 well by mid-year."