PetroAsian Energy Holdings (HKG:0850) has terminated the letter of intent (LOI) for the possible acquisition of 52% participating interests in Modamuji Sag, Hailaer Oilfield Oil and Gas Project. Pursuant to a deed of termination, PetroAsian agreed that the vendor may deduct RMB5 million (HK$6.15 million) to cover the pre-operating expenses paid or incurred by the vendor for the project and the vendor shall return to the balance of the deposit of RMB30 million (HK$36.92 million).

Under the LOI, it is agreed that both PetroAsian and the vendor will proceed to the negotiation for a legally-binding formal agreement on or before the date falling on or before 31 December 2011 (or such later date as agreed by the parties thereto). However, as at 5 January 2012, it was unlikely that the formal agreement can be concluded and entered into. In light of the above, the parties to the LOI have mutually agreed to enter into the deed of termination to terminate the LOI.