Longford Energy Inc.
TSX VENTURE : LFD

Longford Energy Inc.

July 15, 2010 03:00 ET

Longford Energy Inc.-Finalizes Payment Terms for Acquisition of Additional 20% Interest in Chia Surkh Block Production Sharing Contract in the Kurdistan Region-Iraq

CALGARY, ALBERTA--(Marketwire - July 15, 2010) - Longford Energy Inc. ("Longford" or the "Company") (TSX VENTURE:LFD) is pleased to provide the following update on the settlement of final payment terms with the Kurdistan Regional Government ("Government" or "KRG") with regards to the Company's option to acquire an additional 20% working interest in the Chia Surkh Block, as announced in July 27, 2009.

Capacity Building Payment "Profits Royalty"

As previously announced in July 2009, Longford had acquired a 50% interest in a subsidiary, jointly owned with the Government, which held a 40% direct net working interest in the Chia Surkh Block Production Sharing Contract. In addition, Longford had an option to acquire the remaining 50% interest in the subsidiary on terms to be negotiated with the Government.

The Company is pleased to report that it has reached an agreement with the KRG to acquire the remaining interest in the subsidiary resulting in Longford holding an aggregate 40% direct net working interest in the Chia Surkh Production Sharing Contract. As consideration for this transaction, the Company has agreed to pay the Government a 40% royalty, in the form of capacity building payments, on its profits from future production from the Chia Surkh Block. The Government will use payments to support and finance infrastructure and capacity building projects in the Kurdistan Region. All other terms in the original contract remain unchanged.

Mr. Ahmed Said, President & CEO, stated "We are extremely pleased to add to our position and conclude our negotiations to acquire a net 40% working interest. We look forward to the start of our exploration campaign with the commencement of the seismic acquisition program."

About Longford Energy Inc.

Longford Energy Inc. is a junior Canadian oil and gas exploration and production company. Longford has acquired a significant interest in the Chia Surkh Block Production Sharing Contract in the Kurdistan Region – Iraq. The Block offers both a field development opportunity and multiple exploration prospects.

Disclaimers:

Statements in this release that are not historical facts are "forward-looking information" within the meaning of applicable securities law. Forward-looking information typically contain words such as "anticipate", "plan", "expect", "potential", or similar words suggesting future outcomes and include, without limitation, statements regarding the impact of the sale of the assets, Longford's strategic plan; future performance of management and the board; the Company's operational plans; corporate strategy; the commercial terms of the production sharing contract, government relations, the prospective nature of the Chia Surkh Block acquired and the availability of further acquisition opportunities in the future. There can be no assurance that such information will prove to be accurate; actual results and future events could differ materially from such information. Factors that could cause actual results to differ materially include, among others, commodity prices, third party risks, acquisition risks, risks inherent in the oil and gas industry, licensing risks, financing risks, regulatory risks and environmental concerns. Investors are cautioned not to place undue reliance on forward-looking information.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Longford Energy Inc.
    Ahmed S. Said
    President & Chief Executive Officer
    +1 (403) 263 3000
    +1 (403) 263 3041 (FAX)
    asaid@forbesenergygroup.com
    or
    Longford Energy Inc.
    Greg Cameron
    Vice President Corporate Development
    +1 (416) 277 6174
    +1 (403) 263 3041 (FAX)
    gcameron@forbesmanhattan.com