In 2011, through its then subsidiary PNG Energy Limited (“PNG Energy”) and that company's wholly owned subsidiary Gini Energy Limited (“Gini Energy”), UMC Energy plc acquired one on-shore (PPL 378) and two off-shore (PPLs 374 and 375) Petroleum Prospecting Licences (PPLs) in Papua New Guinea. In May 2012, Gini Energy acquired a further on-shore PPL (PPL 405).
On 26 March 2012, the Company entered agreements with CNOOC Australia Limited (“CNOOC”), a subsidiary of CNOOC Limited, the Chinese multi-national oil and gas company listed on the New York and Hong Kong Stock Exchanges, whereby CNOOC subscribed for a 70% equity interest in PNG Energy and UMC Energy retained a 30% equity interest.
Pursuant to the agreements, and in consideration for the share subscription, CNOOC will be responsible for funding all expenditure in respect of the PPLs required to comply with the minimum work obligations during the exploration phase. Such expenditure will be repaid to CNOOC out of production revenues and off take of oil and gas once the assets of Gini Energy enter production, should such production occur. If exploration and appraisal work indicates the probable existence of commercial reservoirs of oil or gas in any part of the PPLs at the end of the exploration phase, the parties must each finance their pro-rata share of all expenditure required in respect of the development plan either themselves or by procuring sufficient finance from a third party.
In addition, the agreements entitle CNOOC to appoint two directors to the boards of each PNG Energy and Gini Energy, with the Company entitled to appoint one director to each board.
The Company owns an 80% equity interest in URAMAD S.A. URAMAD S.A. holds a number of exploration permits issued by the government of Madagascar (the "Exploration Permits").
The Exploration Permits, which have been granted for 10 years expiring in 2015 and 2016, are located in the Morondava Basin in western Madagascar, which is infilled and layered with sediments, most notably the Karoo formation that hosts uranium mineralisation.
The areas were previously identified and explored during the uranium cycles of 1956 to 1963 and 1979 to 1982 by the United Nations (PUND) and the Office of National Mines and Strategic Industries, a Malagasy State body, ("OMNIS") respectively. Later, the French uranium company Cogema took on large permits and continued regional exploration that terminated in the late 1990s with the downturn in uranium prices and demand.
URAMAD is the owner of a data base for the Morondava Basin that includes the results of airborne geophysical and radiometric surveys, drill logs for 790 drill holes (approximately 83,000 metres of drilling) with indicated uranium values, and visible uranium mineralisation associated with targets picked from 7,000 radioactive anomalies, recorded and plotted.