Govt Warns Foreign Firms Against Operating in Puntland, Somaliland

Shabelle Media Network (Mogadishu)

19 June 2011

Mogadishu — The transitional federal government of Somalia on Sunday warned foreign ships against operations in regions of Somalia: the semi-autonomous state of Puntland and the break away republic of Somaliland in particular.

Abdirazak Sheikh Muhyidin, the minister of energy, water and minerals of Somalia, said at a news conference in Mogadishu foreign companies must get permission from the transitional government before launching exploration missions in Somaliland and Puntland.

He exclusively specified the African Oil Corp. which has a deal with Puntland administration.

Africa Oil Corp and Denovo Capital Corp have entered into a letter of intent dated May 11, 2011 for the creation of a new Puntland focused oil exploration company, to be named Puntland Petroleum Corp.

Puntland Petroleum will be created as a result of the transfer of Africa Oil’s interest in its oil and gas properties in Puntland Somalia to Denovo. Denovo is a capital pool company and intends for the Transaction to constitute the ‘Qualifying Transaction’ of Denovo, as that term is defined in the policies of the TSX Venture Exchange.

Under the terms of the letter of intent, Africa Oil and Denovo will negotiate and enter into a definitive agreement pursuant to which Africa Oil will transfer to Denovo all of the issued and outstanding shares of its subsidiary holding companies which hold participating interests in the Dharoor Valley and Nugaal Valley Production Sharing Agreements in Puntland (Somalia). Africa Oil will receive, in consideration of the transfer, 27,777,778 common shares of Denovo.

As a result of the Transaction, the Puntland Subsidiaries will become wholly owned subsidiaries of Denovo, which will change its name to Puntland Petroleum Corp., and the business of the Puntland Subsidiaries will be the business of Puntland Petroleum. The definitive agreement will contain representations and warranties between the parties that are customary for transactions of a similar nature.

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