HOUSTON, Dec. 24, 2003 (PRIMEZONE) -- Transmeridian Exploration, Inc. (OTCBB:TMXN) announced today that EurAsia Holding AG has defaulted on a portion of its obligations under the previously announced $3.0 million private placement of common stock. The private placement will be closed with total proceeds of $1.2 million in exchange for 3,333,333 shares. EurAsia requested an extension of time to complete the second tranche of the investment, and the parties discussed terms of a settlement. EurAsia did not accept the Company's proposal and also defaulted on its remaining payment obligation which was due on December 23, 2003. The Subscription Agreement provides for default payments totaling $200,000, which EurAsia has agreed to pay within 10 days of December 23, 2003.
Under the original terms of the private placement, EurAsia had the right to acquire a total of 10,000,000 shares at $0.30 per share. The Company is surprised that EurAsia did not timely consummate the transaction, in light of the large spread between the fixed purchase price and the current market price of the stock. EurAsia cited other investment priorities within its investor group for the default.
Management Comments
Randall D. Keys, Chief Financial Officer of the Company, commented, "The proceeds received from this private placement have provided important liquidity to the Company. At the time we entered into this transaction, we viewed it as having significant financial and strategic benefits. Given the current market price of our equity, we consider it beneficial that we are not diluting our current shareholders at the fixed price of $0.30 per share."
Operational Update
The Company currently has two wells drilling in the South Alibek Field. The South Alibek #4 has reached its programmed depth of 13,780 feet. Based on indications of hydrocarbons in several intervals during the drilling of the KTII sections, the Company will log and run production casing to begin testing the well. The South Alibek #2 lost drilling time in December waiting on parts for mechanical repairs to the drilling rig. It is currently drilling at approximately 12,200 feet, with approximately 1,500 feet remaining to reach its programmed depth.
About Transmeridian Exploration
Transmeridian Exploration, Inc. (OTCBB:TMXN) is an independent oil and gas company with headquarters in Houston, Texas. Founded in 2000, its primary objective is to acquire and develop oil properties in the Caspian Sea region of the former Soviet Union. TMXN primarily targets medium-sized fields with proved and probable reserves and upside reserve potential. Its first major project is the South Alibek Field in Kazakhstan.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created therein. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including but not limited to those discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. Although Transmeridian Exploration, Inc. believes the assumptions underlying the forward-looking statements contained herein are reasonable, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion herein should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. TMXN discloses proved reserves that comply with the Securities and Exchange Commission's (SEC) definitions. Note that the Company's use of terms such as "ultimate potential" and "recoverable reserves" include quantities of oil that are not yet classified as proved and which the SEC guidelines do not allow us to include in filings with the SEC.