LNG Energy Group Corp. has extended the binding exclusivity agreement and Letter of Intent with Fifth Ocean Management LP, in partnership with Westlawn Group, for a proposed joint venture focused on oil and gas assets in Venezuela. The agreement now runs to November 30, 2026, giving the parties additional time to complete due diligence, address conditions precedent and negotiate definitive transaction documents.
#Proposed joint venture structure
The proposed transaction would create a joint venture company organised in the United States. LNG Energy Group and Fifth Ocean would each hold 50% of the JV Company.
LNG Energy Group would contribute existing oil and gas assets in Venezuela. Fifth Ocean would provide an investment programme of up to US$200 million intended to support higher production and the potential acquisition of additional Venezuelan assets.
#Transaction remains conditional
The proposed transaction has not closed. It remains subject to completion of due diligence and certain conditions precedent, including the negotiation and signing of mutually acceptable definitive documentation within the binding exclusivity period.
Closing is also dependent on customary conditions precedent, required regulatory approvals and customary contractual approvals. The regulatory approvals identified include applicable Office of Foreign Assets Control, Ontario Securities Commission and TSX Venture Exchange approvals.
LNG Energy Group identified several risks to the proposed transaction, including the possibility that the parties may not reach or execute definitive agreements, that required approvals may not be obtained, that Venezuela’s political, legal or regulatory environment may change adversely, or that Fifth Ocean may not be satisfied with the due diligence process. The Company also referred to other factors in its public filings on SEDAR+.
#Sanctions compliance
The parties have acknowledged that activities connected with the proposed transaction will be conducted in compliance with applicable U.S. sanctions laws and regulations administered by OFAC. LNG Energy Group said it will proceed with activities involving the Venezuelan assets only in accordance with OFAC authorisations.
#Proposed Salamander technology programme
The proposed JV Company would also work with Salamander Solutions Inc. on a pilot programme involving Salamander’s heating technology in Venezuela. The stated purpose of the technology partnership is to assess and unlock prospective heavy oil resources within the JV Company’s assets.
#Company background
LNG Energy Group Corp. is identified in the announcement by the trading symbols TSXV:LNGE, TSXV:LNGE.WT, OTC PINK:LNGNF and FWB:E26. The Company focuses on acquiring and developing hydrocarbons production and exploration assets in Latin America.
#Key Takeaways
- LNG Energy Group and Fifth Ocean extended the binding exclusivity agreement and LOI to November 30, 2026.
- The proposed U.S.-organised JV Company would be owned 50/50 by LNG Energy Group and Fifth Ocean.
- Fifth Ocean would fund an investment programme of up to US$200 million, while LNG Energy Group would contribute existing Venezuelan oil and gas assets.
- The transaction remains subject to due diligence, definitive documentation, customary conditions and regulatory approvals.
- Activities involving the Venezuelan assets are subject to applicable OFAC authorisations and sanctions requirements.
#What has LNG Energy Group announced?
LNG Energy Group Corp. agreed with Fifth Ocean Management LP, in partnership with Westlawn Group, to extend the binding exclusivity agreement and Letter of Intent to November 30, 2026. The extension allows the parties to complete due diligence, work through conditions precedent and negotiate definitive transaction documents in good faith.
#Has the proposed joint venture been completed?
No. The proposed transaction remains subject to due diligence, the negotiation and entry into mutually acceptable definitive documentation, customary conditions precedent, required regulatory approvals and customary contractual approvals. The identified risks include an inability to execute definitive agreements, failure to complete due diligence to Fifth Ocean’s satisfaction and failure to obtain the required approvals.
#What are the proposed ownership and funding arrangements?
The proposed joint venture company, which would be organised in the United States, would be owned 50/50 by LNG Energy Group and Fifth Ocean. LNG Energy Group would contribute existing oil and gas assets in Venezuela. Fifth Ocean would fund an investment programme of up to US$200 million for increased production and the potential acquisition of additional assets in Venezuela. These arrangements remain subject to the conditions applying to the transaction.
#What regulatory and sanctions conditions apply?
Closing is subject to required regulatory approvals, including applicable OFAC, Ontario Securities Commission and TSX Venture Exchange approvals, along with customary contractual approvals. The parties have acknowledged that activities connected with the transaction will comply with applicable U.S. sanctions laws and regulations administered by OFAC. LNG Energy Group will proceed with activities involving the Venezuelan assets only in accordance with OFAC authorisations.
#What other partnership is proposed for the joint venture company?
The proposed JV Company would partner with Salamander Solutions Inc. on a pilot programme to deploy Salamander’s heating technology in Venezuela. The partnership would be used to evaluate and unlock prospective heavy oil resources in the JV Company’s assets. It is described as part of the proposed joint venture and does not establish that the transaction has closed.
#What risks does the Company identify regarding the proposed transaction?
LNG Energy Group identifies risks including the inability to negotiate and execute definitive agreements; failure to obtain required regulatory approvals, including those of OFAC, TSX Venture Exchange and applicable Canadian securities commissions; adverse changes in Venezuela’s political, legal or regulatory environment; and failure to complete due diligence to Fifth Ocean’s satisfaction. The Company also refers to other factors described in its public filings on SEDAR+.
#Where is LNG Energy Group listed, according to the announcement?
The announcement identifies LNG Energy Group Corp. under TSXV:LNGE, TSXV:LNGE.WT, OTC PINK:LNGNF and FWB:E26. It describes the Company as focused on the acquisition and development of hydrocarbons production and exploration assets in Latin America.
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