ORLANDO, Fla., Oct. 11, 2012 (GLOBE NEWSWIRE) -- IAHL Corporation (Other OTC:IAHL) is pleased to announce that their subsidiary, Altenesol LNG Colombia S.A.S., has entered into a letter of intent ("LOI") with Geoproduction Oil and Gas Company of Colombia a wholly-owned subsidiary of Shona Energy Company Inc. for the supply of natural gas to the Nataly 1 LNG Plant. A definitive agreement is anticipated to be signed in the 4th quarter, upon completion of certain milestones, and would replace the LOI.
Pursuant to the LOI, Geoproduction will supply up to 17 million standard cubic feet of natural gas per day under a ten year take or pay contract with option to extend the supply contract for an additional five years. The starting price will be determined in the definitive agreement but the starting price is expected to be within a range of $4.50 and $5.25 per million BTU. The approximate value of the proposed contract is $260 million for the ten year period; exact amount will depend on the final agreed price. All of the numbers are in U.S dollars.
"IAHL is committed to growing the use of liquefied natural gas ("LNG"), which is a more cost-effective and cleaner fuel, in Colombia. The targeted market for the LNG is the residential sector particularly in areas where there is no connection to the gas pipelines. Also, the LNG is expected to be used in the heavy duty transportation sector where LNG will replace diesel fuel oil (DFO). These efforts will significantly minimize the green gas emissions and directly contribute to the elimination of CO2 emissions. A portion of the natural gas purchased from Shona will be used to produce the plant's electricity, which will lower the production costs by about approximately $7.5M per year compared to purchasing the electricity from the local utility company. The Nataly 1 plant is projected to generate about $65M per year in revenue or $650M over the 10 year contract period. IAHL will generate additional revenues in its Colombian subsidiary from the distribution of the LNG business and the regasification business in the amount of $53 million and $9.7 million, respectively, over the 10 year contract period. We expect that Nataly 1 will be followed by a total of 5 plants in Colombia within the next 7 years," said Nelson De La Nuez, CEO of IAHL.
We thank the shareholders for their patience and continued support. Our goals and expectations are continually scrutinized to ensure no changes occur to our share structure. We are in the process of acquiring the land where the Nataly 1 plant will be located, completion of the FEED study and the project financing. The financing is expected to be completed in Altenesol LNG Colombia S.A.S. and therefore will not dilute our existing shareholders. Our longer term goal is to seek a listing on a larger North American exchange. Feel free to visit our website at: www.altenesol.com.
Shona is an international oil and gas exploration, development and production company with a focus on South America with assets in Colombia and Peru. The common shares of Shona trade on the TSX venture exchange under SHO.V and the OTCQX under SHOAF. More information on Shona can be found at www.shonaenergy.com.
This press release does not constitute an offer of any securities for sale. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although IAHL believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because IAHL can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: the ability of IAHL to complete transactions described in this press release, the timely receipt of any required regulatory approvals, anticipated expenses, cash flow and capital expenditures, and economic conditions. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. IAHL undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development and production; delays or changes in plans with respect to development projects or capital expenditures; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to the development of the project or capital expenditures.