Quarterly report pursuant to Section 13 or 15(d)

6. DISCONTINUED OPERATIONS AND SALE OF EMIR OIL

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6. DISCONTINUED OPERATIONS AND SALE OF EMIR OIL
 6 Months Ended
Sep. 30, 2012
Notes to Financial Statements  
DISCONTINUED OPERATIONS AND SALE OF EMIR OIL

Emir Oil LLP

 

On September 19, 2011 the Company completed the sale of all of its interests in Emir Oil LLP to a subsidiary of MIE Holdings Corporation.  In anticipation of the sale of Emir Oil all operations of Emir Oil have been reclassified as discontinued operations.

 

The sale of Emir Oil was valued at $170 million in cash, net of $10.4 million in purchase adjustments. In accordance with the Purchase Agreement, the Company placed $36 million in cash in escrow to indemnify the buyer for losses arising from the Company’s breaches of representations and warranties, failure to perform covenants, litigation matters, compliance with (and validity of) Emir Oil’s exploration contract, transfer of certain payables, defects in ownership of certain facilities and pipelines, or violations of applicable environmental law. On September 20, 2012 the escrow period expired and the entire $36 million that was being held in escrow for indemnification purposes was released to the Company without any depletion.

 

The components of discontinued operations for three and six months ended September 30, 2012 and 2011 were as follows:

 

    Three months ended   Six months ended
    September 30, 2012   September 30, 2011   September 30, 2012    September 30, 2011
                 
Revenue   $ —       $ 16,610,716     $ —       $ 41,633,064  
                                 
Operating expenses     —         13,491,217       —         29,914,188  
Other (income)/expense     —         (126,150 )     —         (180,838 )
                                 
Discontinued operations   $ —       $ 3,245,649     $ —       $ 11,899,714