SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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Date of Report: October 20, 1999
ISRAMCO, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12500 13-3145265
(State or Other Jurisdiction Commission File IRS Employer
of Incorporation) Number) Identification No.)
1770 St. James Place, Suite 607, Houston, Texas 77056
(Address of Principal Executive Offices)
713-621-3882
(Registrant's Telephone Number, including Area Code)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
Isramco, Inc. (the "Company"), the operator of the offshore licenses in
Israel, and the below referenced license participants (collectively, the
"Isramco Group"), have on October 20, 1999, entered into an agreement with BG
International Limited, a subsidiary of BG plc (formerly British Gas plc)("BG"),
for the acquisition by BG from the Isramco Group of a 50% participation interest
in the offshore licenses in Israel and BG's replacement of the Company as
operator of such licenses (the "Transaction"). The licenses forming the subject
matter of the Transaction are Med Yavne, Med Tel Aviv, Med Hadera, Med Ashdod
and Med Hasharon (collectively, the "Subject Licenses"). Following the
completion of the Transaction, the Company's participation in the Subject
Licenses will be approximately .5% (reduced from 1.0043%).
Under the terms of the Transaction, BG will replace the Company as
operator of the Med Yavne license by no later than January 1, 2000. The Company
will continue to serve as operator of each of the remaining Subject Licenses on
the same terms and conditions currently existing among the Company and the other
license participants until each such license's expiration.
Pursuant to the Transaction, the Company and BG will coordinate their
respective efforts in consolidating and completing work programs in respect of
the areas included within the Subject Licenses (other than for Med Yavne) for
the purpose of jointly applying for new oil licenses in replacement of any
expiring license ("New Licenses").
In consideration of the Company's performance of its obligations under the
Transaction agreement, BG will remit to the Company approximately $1.9 million
following the execution of the agreement, with an additional approximate $1.9
million to be paid to the Company by no later than January 15, 2000.
Additionally, upon the issuance of each of the three first New Licenses, if any,
BG is to pay to the Company approximately $1.7 million. The Company's share of
the aggregate consideration payable by BG to the Isramco Group in respect of the
transfer of the Subject License rights is approximately $12,000.
With respect to the Med Yavne license, subject to the consent of all of
the license participants the Joint Operating Agreement will be revised to
provide, among other things, that BG will be appointed operator and that the
Company will furnish to BG consulting services of an administrative and
technical nature. In consideration therefor, the Company is entitled to a
monthly fee equal to $10,000. The Company is entitled to receive from each
member of the Isramco Group overriding royalties equal to 2% of each such
member's rights to any oil and/or gas which is produced within the offshore
licenses or within any other oil and gas rights which may be obtained in lieu of
these offshore licenses.
The assignment of the Isramco Group's rights in the Subject Licenses to BG
as contemplated by the Transaction is subject to the consent of the Petroleum
Commissioner of the State of Israel. If such consent is not obtained within 30
days of the signing of the Transaction agreement, then the amounts then paid to
Isramco Group and the Company are to be refunded to BG.
Participants
Naphtha Israel Petroleum Corp. Ltd.
Equital Ltd.
J.O.E.L. - Jerusalem Oil Exploration Ltd.
Negev 2, Limited Partnership
I.N.O.C. Dead Sea Limited Partnership
Naphtha Explorations Limited Partnership
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 20, 1999 Isramco, Inc.
By: /s/ Haim Tsuff
Haim Tsuff
Chairman of the Board