2009-09-25-2009-09-15

To buy company, gaining assets in Ghadames Basin in Libya, with 17 exploration and appraisal wells drilled and cased in Area 47, gaining 99,320 BO/d, 92.7 MMcf/d.

Privately held, Tripoli, Libya-based Libyan Investment Authority plans to acquire Verenex Energy Inc., Calgary, (Toronto: VNX) in a deal valued at approximately C$315 million. The LIA will offer C$7.09 per Verenex share. Verenex had approximately 44.4 million shares outstanding as of June 30. Verenex has oil and gas assets in the Ghadames Basin in Libya, with 17 exploration and appraisal wells drilled and cased in Area 47. Verenex is operator and holds a 50% working interest in the initial five-year exploration period that reduces to 25% for any commercial developments retained in a subsequent 25-year exploitation period. Gross production from 12 of these wells has been flow-tested at approximately 99,320 barrels of oil and 92.7 million cubic feet of gas per day. These wells have been suspended as potential future oil and gas production wells. Libya's national oil company exercised its right of first refusal to acquire Verenex Energy back in March, pre-empting the announced acquisition by Chinese national oil company CNPC International Ltd. in a deal valued at C$499 million. LIA executive director Mohamed Layas says, "The Libyan Investment Authority has assets of over US$65 billion and is pleased to add the Verenex business to its oil and gas portfolio." The memorandum of understand contemplates that a definitive agreement will be signed by Oct. 20, and that the LIA will escrow funds or establish an irrevocable letter of credit or bank guarantee arrangement for the purchase of Verenex at the time the definitive agreement is signed. Verenex president and chief executive James D. McFarland says, "The Libyan Investment Authority is a highly respected Libyan institution with a solid track record of doing deals. Our focus has always been on doing the best for our shareholders and the board of Verenex unanimously endorses this deal as in the best interests of Verenex shareholders."