AMG Oil Ltd., through its wholly-owned subsidiary Adira Energy Corp., explores for oil and gas in Israel within areas located on-shore in the Hula Valley and also 10 kilometers offshore between Netanya and Ashdod. The company currently holds two oil exploration licenses, the Eitan license and the Gabriella license, which together cover an aggregate total of about 129,000 acres.
The company has announced that it has entered into a letter of intent with Brownstone Ventures, a Canadian-based energy investment company that holds interests in numerous international oil and gas properties. Pursuant to this agreement, Brownstone will have the right to earn a 15% participating interest in any existing or future oil & gas blocks acquired by AMG Oil in offshore Israel for a three year period commencing July 15, 2009.
In exchange, Brownstone will contribute 15% of all costs associated with such projects, in addition to its expertise and industry experience. The parties will also work towards an agreement under which they are entitled to participate in certain new Israeli offshore oil and gas exploration and development blocks where the other party may become involved.
The two parties plan to evaluate the Gabriella offshore license as their first joint exploration opportunity with a view to fulfilling the license obligations. AMG’s CEO, Ilan Diamond, stated, “We are very pleased to have Brownstone as our partner as we evaluate the Gabriella license area with a view towards moving the exploration program forward.”
Mr. Diamond continued, “Brownstone and its principals have extensive experience in the oil and gas industry and bring with them tremendous skill in the specialized area of offshore drilling as well as access to significant capital.”