Friday, March 2, 2012 - VANCOUVER, B.C., CANADA, Maxim Resources Inc., (Maxim or the Company), (TSXV:MXM Frankfurt:M5H OTCBB: MXMSF), is providing this shareholder update with respect to the Net Revenue Interest Agreement Maxim and New Scotland Oil & Gas Inc., (New Scotland) have with Jasmin Oil and Gas Ltd., (Jasmin).
Maxim, through New Scotland, entered into a Net Revenue Interest Agreement dated May 26 2009 with Jasmin. This Agreement was a reworking of the previous agreement between the companies that established an industry-standard Working Interest relationship for the investment made by Maxim.
Maxim at the time agreed to the Net Revenue Interest Agreement because Jasmin was withholding financial information Maxim required in order to complete its annual Audited Financial Statements under the previous agreement. These actions by Jasmin resulted in Maxim being placed under a Cease Trade Order by the British Columbia Securities Commission (BCSC) on May 4, 2009.
The Net Revenue Interest Agreement entitled New Scotland, and in turn Maxim, to 69% of the Net Revenue received by Jasmin from production within the South Erin Block. The property and sub-licence that Jasmin has with Petroleum Company of Trinidad and Tobago Limited (Petrotrin) covers 1,350 acres and allows for up to 42 wells to be drilled and produced. After payout of the principal investment to Maxim, the Net Revenue Interest would reduce to 41%. Jasmin has drilled and produced 5 wells to date.
Once Maxim agreed to the Net Revenue Interest Agreement, Jasmin provided the requisite financial information that enabled Maxim to file its annual Audited Financial Statements and make application to the BCSC for the Cease Trade Order to be revoked on August 5, 2009.
Since early 2009 Maxim and New Scotland have attempted to negotiate a purchase of Jasmin and its operations. During this period of time Jasmin and it’s shareholders have agreed in principle to multiple purchase and sale agreements with Maxim and in turn Maxim secured conditional financing and partners to conclude the acquisition of Jasmin. The financiers and partners agreed with Maxim's evaluation and opportunity to acquire Jasmin and preserve the value of the existing investment as well as develop the additional opportunity held by Jasmin through the sub -licence over the South Erin Block.
However, Jasmin and it’s shareholders were unable or unwilling to meet the requested disclosure conditions required by Maxim’s financiers. Jasmin has also not remitted any net revenue based on the 69% Net Revenue Interest Agreement since commencement of operations in the South Erin Block.
As a result of these factors, Maxim was left with little to no choice but to consider legal action to resolve this situation and secure its existing investment.
In accordance with the litigation rules in Trinidad, West Indies, Maxim was required to issue a Pre Action Protocol Letter to Jasmin in an attempt to resolve any issues before commencing litigation. Maxim’s litigation counsel completed this requirement but has not received a response from Jasmin.
Maxim recently requested the financial information from Jasmin it requires to complete its Annual Audited Financial Statements for 2011. This information is similar to the information requested and denied in 2009. Jasmin has once more refused in writing to provide the requisite financial information Maxim requires to substantiate and qualify its invested capital in Jasmin, and which is necessary information to permit Maxim to verify that Jasmin is complying with its obligations under the Net Revenue Interest Agreement.
As a result of the actions taken by Jasmin, it is with regret that Maxim is left with no choice but to commence litigation. Maxim has instructed its Trinidad Counsel to initiate court proceedings in the Trinidad Court.
Issued on behalf of the Board of Directors of
Maxim Resources Inc.
President & CEO
(604) 630-0280 or toll free at 1-888-882-8891
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