Taipan Resources Inc., Vancouver, BC, entered into a preliminary agreement to merge with Lion Petroleum Corp., London, which has interests in 9.7 million exploratory acres onshore Kenya. Closing is subject to reaching a definitive agreement.
Lion has a 20% working interest in Block 1 that covers 7.8 million acres in the Ogaden basin and is operated by Afren PLC and a 100% working interest in Block 2B covering 1.9 million acres at the southernmost extension of the northwest-southeast trending Anza graben near the juncture with the Mandera-Lugh and Mochesa basins.
In consideration for the merger, Taipan will provide Lion with irrevocable bank guarantees to fund the required work program on Block 2B and commitments on Block 1. In addition, Lion’s current shareholders and convertible bridge loan holders will receive 20.1 million shares of Taipan common stock representing 39.1% of the post-merger corporation.