EXPLANATORY
NOTE
This
Registration Statement on Form S-8 relates to the registration of 4,000,000
shares of common stock issuable on exercise of options to be granted under
the
1998 Stock Incentive Plan (the “Plan”) to selected employees, non-employee
members of the Board of Directors, and consultants or other independent advisors
who provide services to GeoGlobal Resources Inc., a Delaware corporation
(the
“Company”).
On
June
14, 2006, the shareholders of the Company approved the adoption of an amendment
to the Plan increasing the number of shares reserved for the grant of options
from 8,000,000 to 12,000,000. This registration statement is filed pursuant
to
paragraph E of the General Instructions to Form S-8 to register additional
securities of the same class as other securities for which a registration
statement has been filed on Form S-8 relating to the Plan.
This
Registration Statement is also a post-effective amendment to the Company’s
Registration Statements on Form S-8 (File Nos. 333-74245, 333-39450, 333-67720
and 333-130135) filed with the Securities and Exchange Commission on March
11,
1999, June 16, 2000, August 16, 2001 and December 1, 2005, respectively,
and is
being filed solely for purposes of including within the Registration Statements,
a re-offer prospectus, as defined in General Instrument C.1 of Form S-8,
3,237,000 shares of Common Stock issuable on exercise of options granted
under
the Company’s 1998 Stock Incentive Plan to certain Officers or Directors who are
or may be deemed to be affiliates of the Company (the “Selling Stockholders”)
for resale by the Selling Stockholders. The re-offer prospectus which is
filed
as a part of this Registration Statement has been prepared in accordance
with
the requirements of Form S-3, and pursuant to General Instruction C of Form
S-8,
may be used for re-offers or re-sales of the shares of Common Stock that
may be
made on a continuous or delayed basis in the future as provided by Rule 415
that
have been or may be acquired by the Selling Stockholders on the exercise
of
options granted pursuant to the Plan.
The
contents of the Company’s registration statements on Form S-8 (File Nos.
333-74245, 333-39450, 333-67720 and 333-130135) filed with the Securities
and
Exchange Commission on March 11, 1999, June 16, 2000, August 16, 2001 and
December 1, 2005, respectively, are incorporated by reference.
GEOGLOBAL
RESOURCES INC.
3,237,000
Shares of Common Stock
Certain
of our officers and Directors, who are named in this prospectus, may offer
and
sell from time to time, for their own accounts up to 3,237,000 shares of
our
Common Stock that they may acquire from time to time on exercise of options
granted under our 1998 Stock Incentive Plan. We will not receive any of the
proceeds from such sales.
See
“Risk Factors” on page 8 for information you should consider before buying
shares of our common stock.
The
Selling Stockholders propose to sell any shares issued to them on exercise
of
options granted to them from time to time in transactions occurring either
on or
off the American Stock Exchange, Inc. (the “AMEX”) at prevailing market prices
or at negotiated prices. Sales may be made through brokers or to dealers,
who
are expected to receive customary commissions or discounts.
The
Selling Stockholders and participating brokers and dealers may be deemed
to be
“underwriters” within the meaning of the Securities Act of 1933, as amended, in
which event any profit on the sale of shares by those Selling Stockholders
and
any commissions or discounts received by those brokers or dealers may be
deemed
to be underwriting compensation under the Securities Act.
Our
Common Stock is traded on the AMEX under the symbol “GGR.” On July 25, 2006, the
closing price of our Common Stock on the AMEX was $3.95 per share.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
Prospectus
dated July
[__],
2006
TABLE
OF CONTENTS
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Prospectus
Summary
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5
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Risk
Factors
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7
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Risks
Relating to Our Oil and Gas Activities
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Because
We Are In the Early Stage of Developing Our Activities, There Are
Considerable
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Risks
That We Will Be Unsuccessful
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8
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Our
Interests In the Production Sharing Contracts Involve Highly Speculative
Exploration
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Opportunities
That Involve Material Risks That We Will Be
Unsuccessful
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9
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Possible
Inability of Contracting Parties to Fulfill Phase One of the Minimum
Work
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Program
for the KG Block
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9
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Because
Our Activities Have Only Recently Commenced And We Have No
Operating
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History
And Reserves of Oil and Gas, We Anticipate Future Losses; There
Is No
Assurance
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Assurance
of Our Profitability
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10
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We
Expect to Have Substantial Requirements For Additional Capital
That May
Be
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Unavailable
To Us Which Could Limit Our Ability To Participate In Our Existing
Ventures
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Or
Pursue Other Opportunities. Our Available Capital is
Limited
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10
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India’s
Regulatory Regime May Increase Our Risks And Expenses Of Doing
Business
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11
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Our
Control by Directors and Executive Officers May Result In Those
Persons
Having
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Interests
Divergent From Our Other Securityholders
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12
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Our
Reliance On A Limited Number Of Key Management Personnel Imposes
Risks On
Us
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That
We Will Have Insufficient Management Personnel Available If The
Services
Of Any
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Of
Them Are Unavailable
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12
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Our
Success Is Largely Dependent On The Success Of The Operators Of
The
Ventures In
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Which
We Participate And Their Failure Or Inability To Properly Or Successfully
Operate
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The
Oil And Gas Exploration, Development And Production Activities
On An
Exploration
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Block,
Could Materially Adversely Affect Us
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12
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Certain
Terms Of The Production Sharing Contracts May Create Additional
Expenses
And
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Risks
That Could Adversely Affect Our Revenues And
Profitability
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13
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Oil
And Gas Prices Fluctuate Widely And Low Oil And Gas Prices Could
Adversely
Affect
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Our
Financial Results
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14
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Our
Ability To Locate And Participate In Additional Exploration Opportunities
And To
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Manage
Growth May Be Limited By Reason Of Our Limited History Of Operations
And
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The
Limited Size Of Our Staff
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15
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Our
Future Performance Depends Upon Our Ability And The Ability Of
The
Ventures
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In
Which We Participate To Find Or Acquire Oil And Gas Reserves That
Are
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Economically
Recoverable
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15
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Estimating
Reserves And Future Net Revenues Involves Uncertainties And Oil
And
Gas
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Price
Declines May Lead To Impairment Of Oil And Gas Assets
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16
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Risks
Relating To The Market For Our Common Stock
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Volatility
Of Stock Price
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16
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Cautionary
Statement for Purposes of The “Safe Harbor” Provisions of The Private
Securities
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Litigation
Reform Act of 1995
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17
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Use
Of Proceeds
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18
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Selling
Securityholders
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18
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Plan
of Distribution
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19
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Legal
Matters
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20
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Experts
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20
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Where
You Can Find More Information
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21
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You
should rely only on the information included in or incorporated by reference
into this prospectus. We have not authorized anyone to provide you with
information that is different. This prospectus may only be used where it
is
legal to sell these shares. The information contained in this prospectus
is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common
stock.
PROSPECTUS
SUMMARY
The
following summary is qualified in its entirety by the more detailed information,
financial statements and other data appearing elsewhere in this prospectus.
At
various places in this prospectus, we may make reference to the “company” or
“us” or “we.” When we use those terms, unless the context otherwise requires, we
mean GeoGlobal Resources Inc. and its wholly-owned subsidiaries.
GeoGlobal
Resources Inc.
GeoGlobal
Resources Inc. is engaged, through subsidiaries and joint ventures in which
we
are a participant, in the exploration for and development of oil and natural
gas
reserves. At present, these activities are being undertaken in locations
where
we and our joint venture participants have been granted exploration rights
pursuant to agreements we have entered into with the Government of India
("GOI"). As of July 25, 2006, we have entered into agreements with respect
to
six of these exploration blocks as follows:
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·
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The
first of our agreements, entered into in February 2003, grants
exploration
rights in an area offshore eastern India. We refer to this as the
“KG
Block” and we have a net 5% carried interest under this agreement.
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·
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We
have entered into two agreements which grant exploration rights
in areas
onshore in the Cambay Basin in the State of Gujarat in western
India.
These agreements were entered into with the GOI in February 2004
and we
have a 10% participating interest under each of these agreements.
We refer
to these as the “Mehsana Block” and the “Sanand/Miroli Block.”
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In
April 2005, we entered into an agreement with Gujarat State Petroleum
Corporation Limited ("GSPC"), providing for our purchase and the
sale by
GSPC, subject to GOI consent, of a 20% participating interest in
the
agreement granting exploration rights onshore in the Cambay Basin
in the
State of Gujarat. We refer to this as the “Tarapur Block”.
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·
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On
September 23, 2005, we signed agreements with respect to two additional
locations. One area in which we hold a 10% participating interest
is
located onshore in the Cambay Basin located in the State of Gujarat
south-east of our three existing Cambay blocks. We refer to this
as the
"Ankleshwar Block". The second area is onshore in the Deccan Syneclise
Basin located in the northern portion of the State of Maharashtra
in
west-central India in which we hold a 100% participating interest.
We
refer to this as the "DS Block".
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All
of
our exploration activities should be considered highly
speculative.
The
Offering
Offering of Common Stock
by
the Selling Stockholders |
3,237,000
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Shares to be outstanding after the
offering of common stock |
67,716,755(1)
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held by the Selling Stockholders
assuming all the |
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Options held by such persons are
exercised |
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______________________________
(1) Based
on
the number of shares of common stock issued and outstanding on July 25, 2006.
Excludes 2,009,000 shares of Common Stock issuable on exercise of options
granted under the Plan to persons other than the Selling Stockholders. Also
excludes an aggregate of 2,418,916 shares of Common Stock issuable pursuant
to
the terms of the Plan on the full exercise of options that may be granted
under
the Plan and warrants issued in September 2005 as compensation to a broker
dealer in connection with the private sale of our securities
Use
of Proceeds
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We
will not realize any of the proceeds from the sale of the shares
offered
by the Selling Stockholders. See “Use of Proceeds.” In the event all the
outstanding options held by the Selling Stockholders are exercised,
we
will receive aggregate proceeds of $7,958,060 which will be added
to our
general corporate funds and used for working capital. There can
be no
assurance those options will be exercised or the proceeds
received.
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Market Symbol
(American
Stock Exchange) |
GGR |
Risk
Factors
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Before
investing in our common stock, you should carefully read and consider
the
information set forth in “Risk Factors” beginning on page 8 of this
prospectus.
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Our
Offices
Our
executive offices are located at 605 - 1st
Street,
SW, Suite 310, Calgary, Alberta, Canada T2P 3S9. Our telephone number is
403-777-9250.
RISK
FACTORS
An
investment in shares of our common stock involves a high degree of risk.
You
should consider the following factors, in addition to the other information
contained in this Prospectus, in evaluating our business and current and
proposed activities before you purchase any shares of our common stock. You
should also see the "Cautionary Statement for Purposes of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995" regarding
risks and uncertainties relating to us and to forward-looking statements
in this
Report.
Risks
Relating to Our Oil and Gas Activities
Because
We Are In the Early Stage Of Developing Our Activities, There Are Considerable
Risks That We Will Be Unsuccessful
We
are in
the early stage of developing our operations. Our only activities in the
oil and
natural gas exploration and production industry have primarily involved entering
into five Production Sharing Contracts with the GOI. In addition, we have
entered into an agreement to acquire a participating interest in a sixth
Production Sharing Contract ("PSC"), subject to GOI consent. We have realized
no
revenues from our oil and natural gas exploration and development activities
and
do not claim any proved reserves of oil or natural gas. As of July 25, 2006
a
venture in which we have a net 5% interest, has drilled and abandoned two
wells,
has drilled, tested and completed two wells and has commenced drilling
operations on a fifth well.
As
of
July 25, 2006, we do not claim any proved reserves of hydrocarbons as a result
of those drilling, testing and evaluation activities. Our current plans are
to
conduct the exploration and development activities on the areas offshore
and
onshore India in accordance with the terms of the PSC's we are a party to.
There
can be no assurance that the exploratory drilling to be conducted on the
exploration blocks in which we hold or have agreed to acquire an interest
will
result in any discovery of hydrocarbons or that any hydrocarbons that are
discovered will be in commercially recoverable quantities. In addition, the
realization of any revenues from commercially recoverable hydrocarbons is
dependent upon the ability to deliver, store and market any hydrocarbons
that
are discovered. The presence of hydrocarbon reserves on contiguous properties
is
no assurance or necessary indication that hydrocarbons will be found in
commercially marketable quantities on the exploration blocks in which we
hold an
interest. Our exploration opportunities are highly speculative and should
any of
these opportunities not result in the discovery of commercial quantities
of oil
and gas reserves, our investment in the venture could be lost.
Our
business plans also include seeking to enter into additional joint ventures
or
other arrangements to acquire interests in additional government created
and
granted hydrocarbon exploration opportunities, primarily located onshore
or in
the offshore waters of India. Opportunities to acquire interests in exploration
opportunities will be dependent upon our ability to identify, negotiate and
enter into joint venture or other similar arrangements with respect to specific
exploration opportunities and upon our ability to raise sufficient capital
to
fund our participation in those joint ventures or other exploration activities.
Our success will be dependent upon the success of the exploration activities
of
the ventures in which we acquire an interest.
Our
Interest In The Production Sharing Contracts Involve Highly Speculative
Exploration Opportunities That Involve Material Risks That We Will Be
Unsuccessful
Our
interests in the exploration blocks should be considered to be highly
speculative exploration opportunities that involve material risks. None of
the
exploration blocks in which we have an interest have any proven reserves
and are
not producing any quantities of oil or natural gas. Exploratory drilling
activities are subject to many risks, including the risk that no commercially
productive reservoirs will be encountered. There can be no assurance that
wells
drilled on any of the exploration blocks in which we have an interest or
by any
venture in which we may acquire an interest in the future will be productive
or
that we will receive any return or recover all or any portion of our investment.
Drilling for oil and gas may involve unsuccessful or unprofitable efforts,
not
only from dry wells, but from wells that are productive but do not produce
sufficient net revenues to return a profit after drilling, operating and
other
costs. The cost of drilling, completing and operating wells is often uncertain.
Drilling operations may be curtailed, delayed or canceled as a result of
numerous factors, many of which are beyond the operator’s control, including
economic conditions, mechanical problems, extreme downhole pressures and
temperatures, title problems, weather conditions, compliance with governmental
requirements and shortages or delays of equipment and services. Drilling
activities on the exploration blocks in which we hold an interest may not
be
successful and, if unsuccessful, such failure may have a material adverse
effect
on our future results of operations and financial condition.
Possible
Inability of Contracting Parties to Fulfill Phase One of the Minimum Work
Program for the KG Block
Our
PSC
relating to the KG Block provides that by the end of the first phase of the
exploration period the contracting parties shall have drilled at least fourteen
wells. The first phase of the exploration period expired on September 11,
2005.
Through July 25, 2006, four wells have been drilled on the exploration block,
leaving ten wells to be drilled. On August 5, 2005, a written notice requesting
the six month extension was submitted and on August 29, 2005, the management
committee consented to the extension of six months to March 11, 2006 and
deducted the six month extension from the Phase II exploration period. On
February 24, 2006, the management committee for the KG Block recommended
a
further extension to the first phase of twelve months to March 11, 2007 which
will also be deducted from the second phase of the exploration program. As
at
July 25, 2006, approval of this extension from the GOI is still outstanding.
The
PSC
provides that, if at the end of an exploration phase a work program for that
phase is not completed, the time for completion of the exploration program
for
that phase is to be extended for a period necessary to enable completion
but not
exceeding six months, provided the parties (i) submit a request by written
notice to the GOI at least thirty days prior to the expiration of the relevant
phase, (ii) can show technical or other good reasons for the non-completion
of
the work program, and (iii) the management committee gives its consent to
the
extension. Any such extension that is granted is to be deducted from the
next
succeeding exploration phase.
In
the
event the twelve month extension is granted and the ten additional wells
are not
drilled by March 11, 2007, or the further extension is not granted, the Company
may be liable for consequences of non-fulfillment of the minimum work commitment
in a given time frame under the PSC. The PSC has provisions for termination
on
account of various reasons specified therein, including material breach of
the
contract. Termination rights can be exercised after giving ninety days written
notice, unless such failure of compliance or contravention is remedied within
the ninety-day period or such extended period as may be granted by the GOI.
The
failure to timely complete the minimum work commitment may be deemed by the
GOI
to be a failure to comply with the provisions of the PSC in a material
particular. We have been advised by GSPC that it is unaware of any such
precedence. In the event the PSC is terminated by the GOI, or in the event
the
work program is not fulfilled by the end of the relevant exploration phase,
each
party to the PSC is to pay to the GOI its participating interest share of
an
amount which is equal to the amount that would be required to complete the
minimum work program for that phase. We are of the view that GSPC, under
the
terms of our Carried Interest Agreement, would be liable for our participating
interest share of the amount required to complete the minimum work program
for
the phase. However, termination of the PSC by the GOI would result in the
loss
of our interest in the KG Block other than areas determined to encompass
commercial discoveries. No areas on the KG Block have been determined to
encompass commercial discoveries as of July 25, 2006.
Because
Our Activities Have Only Recently Commenced And We Have No Operating History
And
Reserves Of Oil And Gas, We Anticipate Future Losses; There Is No Assurance
Of
Our Profitability
Our
oil
and natural gas operations have been only recently established and we have
no
operating history, oil and gas reserves or assets upon which an evaluation
of
our business, our current business plans and our prospects can be based.
Our
prospects must be considered in light of the risks, expenses and problems
frequently encountered by all companies in their early stages of development
and, in particular, those engaged in exploratory oil and gas activities.
Such
risks include, without limitation:
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§
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We
will experience failures to discover oil and gas in commercial
quantities;
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§
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There
are uncertainties as to the costs to be incurred in our exploratory
drilling activities, cost overruns are possible and we may encounter
mechanical difficulties and failures in completing
wells;
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§
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There
are uncertain costs inherent in drilling into unknown formations,
such as
over-pressured zones, high temperatures and tools lost in the hole;
and
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§
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We
may make changes in our drilling plans and locations as a result
of prior
exploratory drilling.
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During
the exploration phase prior to the start date of initial commercial production,
we have a carried interest in the exploration activities on the KG Block.
Our
interests in our other five exploration blocks are participating interests
which
require us to pay our proportionate share of exploration, drilling and
development expenses on these blocks substantially as those expenses are
incurred. Unexpected or additional costs can affect the commercial viability
of
producing oil and gas from a well and will affect the time when and amounts
that
we can expect to receive from any production from a well. Because our carried
costs of exploration and drilling on the KG Block are to be repaid in full
to
the operator, GSPC, before we are entitled to any share of production,
additional exploration and development expenses will reduce and delay any
share
of production and revenues we will receive.
There
can
be no assurance that the ventures in which we are a participant will be
successful in addressing these risks, and any failure to do so could have
a
material adverse effect on our prospects for the future. Our operations were
recently established, and as such, we have no substantial operating history
to
serve as the basis to predict our ability to further the development of our
business plan. Likewise, the outcome of our exploratory drilling activities,
as
well as our quarterly and annual operating results cannot be predicted.
Consequently, we believe that period to period comparisons of our exploration,
development, drilling and operating results will not necessarily be meaningful
and should not be relied upon as an indication of our stage of development
or
future prospects. Through July 25, 2006, we abandoned two wells drilled on
the
KG Block and it is likely that in some future quarter our stage of development
or operating or drilling results may fall below our expectations or the
expectations of securities analysts and investors and that some of our drilling
results will be unsuccessful and the wells abandoned. In such event, the
trading
price of our common stock may be materially and adversely affected.
We
Expect to Have Substantial Requirements For Additional Capital That May Be
Unavailable To Us Which Could Limit Our Ability To Participate In Our Existing
and Additional Ventures Or Pursue Other Opportunities. Our Available Capital
is
Limited
In
order
to participate under the terms of our PSC's as well as in further joint venture
arrangements leading to the possible grant of exploratory drilling
opportunities, we will be required to contribute or have available to us
material amounts of capital. Under the terms of our carried interest agreement
relating to the KG Block, after the start date of initial commercial production
on the KG Block, and under the terms of the five additional PSC's we are
parties
to, as well as the agreement relating to the acquisition of the 20%
participating interest in the Tarapur Block, we are required to bear our
proportionate share of costs during the exploration phases of those agreements.
There can be no assurance that our currently available capital will be
sufficient for these purposes or that any additional capital that is required
will be available to us in the amounts and at the times required. Such capital
also may be required to secure bonds in connection with the grant of exploration
rights, to conduct or participate in exploration activities or be engaged
in
drilling and completion activities. We intend to seek the additional capital
to
meet our requirements from equity and debt offerings of our securities. Our
ability to access additional capital will depend in part on the success of
the
ventures in which we are a participant in locating reserves of oil and gas
and
developing producing wells on the exploration blocks, the results of our
management in locating, negotiating and entering into joint venture or other
arrangements on terms considered acceptable, as well as the status of the
capital markets at the time such capital is sought. There can be no assurance
that capital will be available to us from any source or that, if available,
it
will be at prices or on terms acceptable to us. Should we be unable to access
the capital markets or should sufficient capital not be available, our
activities could be delayed or reduced and, accordingly, any future exploration
opportunities, revenues and operating activities may be adversely affected
and
could also result in our breach of the terms of a PSC which could result
in the
loss of our rights under the contract.
As
of
June 30, 2006, we had cash and cash equivalents of approximately $35.0 million.
We currently expect that our available cash will be sufficient to fund through
December 2007 at the present level of operations our required capital
expenditures on the five exploration blocks in which we are currently a
participant and our participation in the Tarapur Block in which we agreed
to
acquire a 20% participating interest. Although exploration activity budgets
are
subject to ongoing review and revision, our present estimate of our commitments
of capital pursuant to the terms of our PSC's relating to these exploration
blocks, totals approximately $11.6
million
during the period April 1, 2006 to March 31, 2007. Any further PSC's we may
seek
to enter into or any expanded scope of our operations or other transactions
that
we may enter into may require us to fund our participation or capital
expenditures with amounts of capital not currently available to us. We may
be
unsuccessful in raising the capital necessary to meet these capital
requirements. There can be no assurance that we will be able to raise the
capital.
Pursuant
to our agreement executed on April 7, 2005 to acquire a 20% participating
interest from GSPC in the Tarapur Block, to
date,
our share of costs incurred amounts to approximately US$2.9 million which
has
been expended on the drilling of six wells and a recently completed 500 sq
km
3-D seismic acquisition. In addition, it is expected that under the terms
of our
agreement with GSPC the total capital we will be required to contribute to
exploration activities on Tarapur during the period ending March 31, 2007,
based
on our 20% participating interest, will be approximately an additional
$4.6
million.
Our
agreement with GSPC on the Tarapur Block is subject to obtaining the GOI
consent. In the event such consent is not obtained, the assignment would
be
terminated. In the event the GOI does not reject in writing the application
for
consent to the assignment within 180 days, it is deemed approved, however,
the
commencement of this 180 day period does not commence until the GOI deems
the
application submitted to be complete. The GOI has not as of July 25, 2006
deemed
the application to be complete.
On
May
30, 2006, we entered into a Memorandum of Understanding (“MOU”) with GSPC
relating to the Tarapur Block. Under the terms of our previous agreement
with
GSPC, we are to fund a 20% PI share of all past exploration costs incurred
on
the Tarapur Block and keep in force a financial and performance guarantee
in an
amount sufficient to secure our performance under the Tarapur PSC. Under
the
terms of our previous agreement with GSPC, in the event such GOI consent
is not
obtained, the assignment would be terminated. Pursuant to the MOU, in the
event
that the GOI does not approve of the Tarapur assignment, GSPC is obligated
to
repay to us all amounts paid by us to GSPC with respect to the Tarapur Block
and
the assignment would be automatically terminated. GSPC is to repay such amounts
to us within 30 days of a written notice from us.
India’s
Regulatory Regime May Increase Our Risks And Expenses In Doing
Business
All
phases of the oil and gas exploration, development and production activities
in
which we are participating are regulated in varying degrees by the Indian
government, either directly or through one or more governmental entities.
The
areas of government regulation include matters relating to restrictions on
production, price controls, export controls, income taxes, expropriation
of
property, environmental protection and rig safety. In addition, the award
of a
PSC is subject to GOI consent and matters relating to the implementation
and
conduct of operations under the PSC is subject, under certain circumstances,
to
GOI consent. As a consequence, all future drilling and production programs
and
operations we undertake or are undertaken by the ventures in which we
participate in India must be approved by the Indian government. Shifts in
political conditions in India could adversely affect our business in India
and
the ability to obtain requisite government approvals in a timely fashion
or at
all. We, and our joint venture participants, must maintain satisfactory working
relationships with the Indian government. This regulatory environment may
increase the risks associated with our intended exploration and productivity
activities and increase our costs of doing business.
Our
Control By Directors And Executive Officers May Result In Those Persons Having
Interests Divergent From Our Other Stockholders
As
of
July 25, 2006, our Directors and executive officers and their respective
affiliates, in the aggregate, beneficially hold 32,216,167 shares or
approximately 50.0% of our outstanding Common Stock. As a result, these
stockholders possess significant influence over us, giving them the ability,
among other things, to elect a majority of our Board of Directors and approve
significant corporate transactions. These persons will retain significant
control over our present and future activities and our other stockholders
and
investors may be unable to meaningfully influence the course of our actions.
These persons may have interests regarding the future activities and
transactions in which we engage which may diverge from the interests of our
other stockholders. Such share ownership and control may also have the effect
of
delaying or preventing a change in control of us, impeding a merger,
consolidation, takeover or other business combination involving us, or
discourage a potential acquiror from making a tender offer or otherwise
attempting to obtain control of us which could have a material adverse effect
on
the market price of our Common Stock. Although management has no intention
of
engaging in such activities, there is also a risk that the existing management
will be viewed as pursuing an agenda which is beneficial to themselves at
the
expense of other stockholders.
Our
Reliance On A Limited Number Of Key Management Personnel Imposes Risks On
Us
That We Will Have Insufficient Management Personnel Available If The Services
Of
Any Of Them Are Unavailable
We
are
dependent upon the services of our President and Chief Executive Officer,
Jean
Paul Roy, and Executive Vice President and Chief Financial Officer, Allan
J.
Kent. The loss of either of their services could have a material adverse
effect
upon us. We currently do not have employment agreements with either of such
persons or key man life insurance. The services of both Mr. Roy and Mr. Kent
are
provided pursuant to the terms of agreements with corporations wholly-owned
by
each of them. At present, Mr. Kent’s services are provided through an oral
agreement with the corporation he owns. Accordingly, these agreements do
not
contain any provisions whereby Mr. Roy and Mr. Kent have direct contractual
obligations to us to provide services or refrain from other
activities.
At
present, our future is substantially dependent upon the geological and
geophysical capabilities of Mr. Roy to locate oil and gas exploration
opportunities for us and the ventures in which we are a participant. His
inability to do the foregoing could materially adversely affect our future
activities. We entered into a three-year Technical Services Agreement with
Roy
Group (Barbados) Inc. dated August 29, 2003, a company owed 100% by Mr. Roy,
to
perform such geological and geophysical duties and exercise such powers related
thereto as we may from time to time assign to it. The expiration term of
this
contract has subsequently been extended to December 31, 2007. We have no
agreement directly with Mr. Roy regarding his services to us.
Our
Success Is Largely Dependent On The Success Of The Operators Of The Ventures
In
Which We Participate And Their Failure Or Inability To Properly Or Successfully
Operate The Oil And Gas Exploration, Development And Production Activities
On An
Exploration Block, Could Materially Adversely Affect Us
At
present, our only oil and gas interests are our rights under the terms of
the
five PSC's with the GOI that we have entered into and the Deed of Assignment
and
Assumption agreement with GSPC, effective only upon obtaining GOI consent,
relating to an interest in the Tarapur Block. We are not and will not be
the
operator of any of the exploration, drilling and production activities conducted
on our exploration blocks, with the exception of the DS block in which we
are
the operator. Accordingly, the realization of successes in the exploration
of
the blocks is substantially dependent upon the success of the operators in
exploring for and developing reserves of oil and gas and their ability to
market
those reserves at prices that will yield a return to us.
Under
the
terms of our carried interest agreement for the KG Block, we have a carried
interest in the exploration activities conducted by the parties on the KG
Block
prior to the start date of initial commercial production. However, under
the
terms of that agreement, all of our proportionate share of capital costs
for
exploration and development activities must be repaid without interest over
the
projected production life or ten years, whichever is less. Our proportionate
share of these costs and expenses expected to be incurred over the 6.5 year
term
of the PSC for which our interest is carried was originally estimated to
be
approximately $22.0 million. Additional drilling costs including the drilling
to
depths in excess of 5,000 meters, where higher downhole temperatures and
pressures are encountered, versus shallower depths as originally anticipated,
as
well as the testing and completion costs of these wells, has resulted in
additional costs exceeding original budgeted expenditures. As a consequence
of
these additional drilling costs incurred, as of July 25, 2006, the annual
budget
for the period April 1, 2006 to March 31, 2007 submitted to the Management
Committee under the PSC for the KG Block estimates that GSPC will expend
approximately $26.2 million attributed to us under the CIA over the period
April
1, 2006 to March 31, 2007. Further additional expenditures may be required
for
cost overruns and completions of commercially successful wells. We are unable
to
estimate the amount of additional expenditures GSPC will make as operator
attributable to us prior to the start date of initial commercial production
under the carried interest agreement or when, if ever, any commercial production
will commence. Of these expenditures, 50% are for the account of Roy Group
(Mauritius) Inc. under the terms of the Participating Interest Agreement
between
us and Roy Group (Mauritius) Inc. We are not entitled to any share of production
from the KG Block until such time as the expenditures attributed to us,
including those expenditures made for the account of Roy Group (Mauritius)
Inc.,
under the carried interest agreement, have been recovered by GSPC from future
production revenue. Therefore, we are unable to estimate when we may commence
to
receive distributions from any production of hydrocarbon reserves found on
the
KG Block. As provided in the carried interest agreement, in addition to repaying
our proportionate share of capital costs incurred for which we were carried,
we
will be required to bear our proportionate share of the expenditures
attributable to us after the start date of initial commercial production
on the
KG Block.
Certain
Terms Of The Production Sharing Contracts May Create Additional Expenses
And
Risks That Could Adversely Affect Our Revenues And
Profitability
The
PSC's
contain certain terms that may affect the revenues of the joint venture
participants to the agreements and create additional risks for us. These
terms
include, possibly among others, the following:
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§
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The
venture participants are required to complete certain minimum work
programs during the three phases of the terms of the PSC's. In
the event
the venture participants fail to fulfill any of these minimum work
programs, the parties to the venture must pay to the GOI their
proportionate share of the amount that would be required to complete
the
minimum work program. Accordingly, we could be called upon to pay
our
proportionate share of the estimated costs of any incomplete work
programs;
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§
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Until
such time as the GOI attains self sufficiency in the production
of crude
oil and condensate and is able to meet its national demand, the
parties to
the venture are required to sell in the Indian domestic market
their
entitlement under the PSC's to crude oil and condensate produced
from the
exploration blocks. In addition, the Indian domestic market has
the first
call on natural gas produced from the exploration blocks and the
discovery
and production of natural gas must be made in the context of the
government’s policy of utilization of natural gas and take into account
the objectives of the government to develop its resources in the
most
efficient manner and promote conservation measures. Accordingly,
this
provision could interfere with our ability to realize the maximum
price
for our share of production of
hydrocarbons;
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§
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The
parties to each agreement that are not Indian companies, which
includes
us, are required to negotiate technical assistance agreements with
the GOI
or its nominee whereby such foreign company can render technical
assistance and make available commercially available technical
information
of a proprietary nature for use in India by the government or its
nominee,
subject, among other things, to confidentiality restrictions. Although
not
intended, this could increase each venture’s and our cost of operations;
and
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§
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The
parties to each venture are required to give preference, including
the use
of tender procedures, to the purchase and use of goods manufactured,
produced or supplied in India provided that such goods are available
on
equal or better terms than imported goods, and to employ Indian
subcontractors having the required skills insofar as their services
are
available on comparable standards and at competitive prices and
terms.
Although not intended, this could increase the venture’s and our cost of
operations.
|
These
provisions of the PSC's, possibly among others, may increase our costs of
participating in the ventures and thereby affect our profitability.
Oil
And Gas Prices Fluctuate Widely And Low Oil And Gas Prices Could Adversely
Affect Our Financial Results
There
is
no assurance that there will be any market for oil or gas produced from the
exploration blocks in which we hold an interest and our ability to deliver
the
production from any wells may be constrained by the absence of or limitations
on
collector systems and pipelines. Future price fluctuations could have a major
impact on the future revenues from any oil and gas produced on these exploration
blocks and thereby our revenue, and materially affect the return from and
the
financial viability of any reserves that are claimed. Historically, oil and
gas
prices and markets have been volatile, and they are likely to continue to
be
volatile in the future. A significant decrease in oil and gas prices could
have
a material adverse effect on our cash flow and profitability and would adversely
affect our financial condition and the results of our operations. In addition,
because world oil prices are quoted in and trade on the basis of U.S. dollars,
fluctuations in currency exchange rates that affect world oil prices could
also
affect our revenues. Prices for oil and gas fluctuate in response to relatively
minor changes in the supply of and demand for oil and gas, market uncertainty
and a variety of additional factors that are beyond our control, including:
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§
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political
conditions in oil producing regions, including the Middle East
and
elsewhere;
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§
|
the
domestic and foreign supply of oil and gas;
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§
|
quotas
imposed by the Organization of Petroleum Exporting Countries upon
its
members;
|
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§
|
the
level of consumer demand;
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|
§
|
domestic
and foreign government regulations;
|
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§
|
the
price and availability of alternative fuels;
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§
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overall
economic conditions; and
|
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§
|
international
political conditions.
|
In
addition, various factors may adversely affect the ability to market oil
and gas
production from the exploration block, including:
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§
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the
capacity and availability of oil and gas gathering systems and
pipelines;
|
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§
|
the
ability to produce oil and gas in commercial quantities and to
enhance and
maintain production from existing wells and wells proposed to be
drilled;
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§
|
the
proximity of future hydrocarbon discoveries to oil and gas transmission
facilities and processing equipment (as well as the capacity of
such
facilities);
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§
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the
effect of governmental regulation of production and transportation
(including regulations relating to prices, taxes, royalties, land
tenure,
allowable production, importing and exporting of oil and condensate
and
matters associated with the protection of the
environment);
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§
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the
imposition of trade sanctions or embargoes by other
countries;
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§
|
the
availability and frequency of delivery vessels;
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§
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changes
in supply due to drilling by others;
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§
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the
availability of drilling rigs and qualified personnel; and
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Our
Ability To Locate And Participate In Additional Exploration Opportunities
And To
Manage Growth May Be Limited By Reason Of Our Limited History Of Operations
And
The Limited Size Of Our Staff
While
our
President and Executive Vice President have had extensive experience in the
oil
and gas exploration business, we have been engaged in limited activities
in the
oil and gas business over approximately the past three years and have a limited
history of activities upon which you may base your evaluation of our
performance. As a result of our brief operating history and limited activities
in oil and gas exploration activities, our success to date in entering into
ventures to acquire interests in exploration blocks may not be indicative
that
we will be successful in entering into any further ventures. There can be
no
assurance that we will be successful in growing our oil and gas exploration
and
development activities.
Any
future significant growth in our oil and gas exploration and development
activities will place demands on our executive officers, and any increased
scope
of our operations will present challenges to us due to our current limited
management resources. Our future performance will depend upon our management
and
their ability to locate and negotiate opportunities to participate in joint
venture and other arrangements whereby we can participate in exploration
opportunities. There can be no assurance that we will be successful in these
efforts. Our inability to locate additional opportunities, to hire additional
management and other personnel or to enhance our management systems could
have a
material adverse effect on our results of operations.
Our
Future Performance Depends Upon Our Ability And The Ability Of The Ventures
In
Which We Participate To Find Or Acquire Oil And Gas Reserves That Are
Economically Recoverable
Our
success in developing our oil and gas exploration and development activities
will be dependent upon establishing, through our participation with others
in
joint ventures and other similar activities, reserves of oil and gas and
maintaining and possibly expanding the levels of those reserves. We and the
joint ventures in which we may participate may not be able to locate and
thereafter replace reserves from exploration and development activities at
acceptable costs. Lower prices of oil and gas may further limit the kinds
of
reserves that can be developed at an acceptable cost. The business of exploring
for, developing or acquiring reserves is capital intensive. We may not be
able
to make the necessary capital investment to enter into joint ventures or
similar
arrangements to maintain or expand our oil and gas reserves if capital is
unavailable to us and the ventures in which we participate. In addition,
exploration and development activities involve numerous risks that may result
in
dry holes, the failure to produce oil and gas in commercial quantities, the
inability to fully produce discovered reserves and the inability to enhance
production from existing wells.
We
expect
that we will continually seek to identify and evaluate joint venture and
other
exploration opportunities for our participation as a joint venture participant
or through some other arrangement. Our ability to enter into additional
exploration activities will be dependent to a large extent on our ability
to
negotiate arrangements with others and with various governments and governmental
entities whereby we can be granted a participation in such ventures. There
can
be no assurance that we will be able to locate and negotiate such arrangements,
have sufficient capital to meet the costs involved in entering into such
arrangements or that, once entered into, that such exploration activities
will
be successful. Successful acquisition of exploration opportunities can be
expected to require, among other things, accurate assessments of potential
recoverable reserves, future oil and gas prices, projected operating costs,
potential environmental and other liabilities and other factors. Such
assessments are necessarily inexact, and as estimates, their accuracy is
inherently uncertain. We cannot assure you that we will successfully consummate
any further exploration opportunities or joint venture or other arrangements
leading to such opportunities.
Estimating
Reserves And Future Net Revenues Involves Uncertainties And Oil And Gas Price
Declines May Lead To Impairment Of Oil And Gas Assets
Currently,
we do not claim any proved reserves of oil or natural gas. Any reserve
information that we may provide in the future will represent estimates based
on
reports prepared by independent petroleum engineers, as well as internally
generated reports. Petroleum engineering is not an exact science. Information
relating to proved oil and gas reserves is based upon engineering estimates
derived after analysis of information we furnish or furnished by the operator
of
the property. Estimates of economically recoverable oil and gas reserves
and of
future net cash flows necessarily depend upon a number of variable factors
and
assumptions, such as historical production from the area compared with
production from other producing areas, the assumed effects of regulations
by
governmental agencies and assumptions concerning future oil and gas prices,
future operating costs, severance and excise taxes, capital expenditures
and
workover and remedial costs, all of which may in fact vary considerably from
actual results. Oil and gas prices, which fluctuate over time, may also affect
proved reserve estimates. For these reasons, estimates of the economically
recoverable quantities of oil and gas attributable to any particular group
of
properties, classifications of such reserves based on risk of recovery and
estimates of the future net cash flows expected therefrom prepared by different
engineers or by the same engineers at different times may vary substantially.
Actual production, revenues and expenditures with respect to reserves we
may
claim will likely vary from estimates, and such variances may be material.
Either inaccuracies in estimates of proved undeveloped reserves or the inability
to fund development could result in substantially reduced reserves. In addition,
the timing of receipt of estimated future net revenues from proved undeveloped
reserves will be dependent upon the timing and implementation of drilling
and
development activities estimated by us for purposes of the reserve report.
Quantities
of proved reserves are estimated based on economic conditions in existence
in
the period of assessment. Lower oil and gas prices may have the impact of
shortening the economic lives on certain fields because it becomes uneconomic
to
produce all recoverable reserves on such fields, thus reducing proved property
reserve estimates. If such revisions in the estimated quantities of proved
reserves occur, it will have the effect of increasing the rates of depreciation,
depletion and amortization on the affected properties, which would decrease
earnings or result in losses through higher depreciation, depletion and
amortization expense. The revisions may also be sufficient to trigger impairment
losses on certain properties that would result in a further non-cash charge
to
earnings.
Risks
Relating To The Market For Our Common Stock
Volatility
Of Our Stock Price
The
public market for our common stock has been characterized by significant
price
and volume fluctuations. There can be no assurance that the market price
of our
common stock will not decline below its current or historic price ranges.
The
market price may bear no relationship to the prospects, stage of development,
existence of oil and gas reserves, revenues, earnings, assets or potential
of
our Company and may not be indicative of our future business performance.
The
trading price of our common stock could be subject to wide fluctuations.
Fluctuations in the price of oil and gas and related international political
events can be expected to affect the price of our common stock. In addition,
the
stock market in general has experienced extreme price and volume fluctuations
that have affected the market price for many companies which fluctuations
have
been unrelated to the operating performance of these companies. These market
fluctuations, as well as general economic, political and market conditions,
may
have a material adverse effect on the market price of our company's common
stock. In the past, following periods of volatility in the market price of
a
company's securities, securities class action litigation has often been
instituted against such companies. Such litigation, if instituted, and
irrespective of the outcome of such litigation, could result in substantial
costs and a diversion of management's attention and resources and have a
material adverse effect on our company's business, results of operations
and
financial condition.
Cautionary
Statement For Purposes Of The "Safe Harbor" Provisions Of The Private Securities
Litigation Reform Act Of 1995
With
the
exception of historical matters, the matters discussed in this Prospectus
are
“forward-looking statements” as defined under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, that involve
risks
and uncertainties. Forward-looking statements made herein include, but are
not
limited to:
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·
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the
statements in this Prospectus regarding our plans and objectives
relating
to our future operations,
|
|
·
|
plans
and objectives regarding the exploration, development and production
activities conducted on the exploration blocks in India in which
we have
interests,
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·
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plans
regarding drilling activities intended to be conducted through
the
ventures in which we are a participant, the success of those drilling
activities and our ability and the ability of the ventures to complete
any
wells on the exploration blocks, to develop reserves of hydrocarbons
in
commercially marketable quantities, to establish facilities for
the
collection, distribution and marketing of hydrocarbons, to produce
oil and
natural gas in commercial quantities and to realize revenues from
the
sales of those hydrocarbons.
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·
|
our
plans and objectives to join with others or to directly seek to
enter into
or acquire interests in additional PSC's with the GOI and others,
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·
|
our
assumptions, plans and expectations regarding our future capital
requirements,
|
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·
|
our
plans and intentions regarding our plans to raise additional capital,
|
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·
|
the
costs and expenses to be incurred in conducting exploration, well
drilling, development and production activities and the adequacy
of our
capital to meet our requirements for our present and anticipated
levels of
activities are all forward-looking statements.
|
These
statements appear, among other places, under the caption "Risk Factors".
If our
plans fail to materialize, your investment will be in jeopardy.
|
·
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We
cannot assure you that our assumptions or our business plans and
objectives discussed herein will prove to be accurate or be able
to be
attained.
|
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·
|
We
cannot assure you that any commercially recoverable quantities
of
hydrocarbon reserves will be discovered on the exploration blocks
in which
we have an interest.
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·
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Our
ability to realize revenues cannot be assured. Our ability to successfully
drill, test and complete producing wells cannot be assured.
|
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·
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We
cannot assure you that we will have available to us the capital
required
to meet our plans and objectives at the times and in the amounts
required
or we will have available the amounts we are required to fund under
the
terms of the PSC we are a party to.
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·
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We
cannot assure you that we will be successful in joining any further
ventures seeking to be granted PSC's by the GOI or that we will
be
successful in acquiring interests in existing ventures.
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·
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We
cannot assure you that the GOI will consent to the assignment by
GSPC of
the 20% participating interest in the Tarapur Block.
|
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·
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We
cannot assure you that the outcome of testing of one or more wells
on the
KG Block will be satisfactory and result in a commercially-productive
well
or that any further wells drilled on the KG Block will have
commercially-successful results.
|
Our
inability to meet our goals and objectives or the consequences to us from
adverse developments in general economic or capital market conditions, events
having international consequences, or military or terrorist activities could
have a material adverse effect on us. We caution you that various risk factors
accompany those forward-looking statements and are described, among other
places, under the caption "Risk Factors" herein. They are also described
in our
Annual Report on Form 10-KSB for the year ended December 31, 2005, our Quarterly
Reports on Form 10-QSB, and our Current Reports on Form 8-K. These risk factors
could cause our operating results, financial condition and ability to fulfill
our plans to differ materially from those expressed in any forward-looking
statements made in this Prospectus and could adversely affect our financial
condition and our ability to pursue our business strategy and
plans.
USE
OF PROCEEDS
This
Prospectus relates solely to the common stock being offered and sold for
the
account of the Selling Securityholders upon the exercise of options granted
to
them under our 1998 Stock Incentive Plan. We will not receive any of the
proceeds from the sale of the common stock being offered by the Selling
Securityholders but will pay all of the expenses related to the registration
of
the securities. We estimate that these expenses will be approximately
$20,000.
The
3,237,000 shares included in this Prospectus are issuable on exercise of
outstanding options granted under the Plan and held by the Selling
Securityholders. In the event all the options are exercised by the Selling
Stockholders, we will receive aggregate proceeds of $7,958,060. There can
be no
assurance those options will be exercised or the proceeds received. Such
proceeds will be added to our general corporate funds and used for working
capital purposes.
SELLING
STOCKHOLDERS
The
following table sets forth the aggregate numbers of securities beneficially
owned by each Selling Stockholder as of July 25, 2006 and the aggregate number
of securities registered hereby that each Selling Stockholder may offer and
sell
pursuant to this Prospectus. Because the Selling Stockholders may sell all
or a
portion of the securities at any time and from time to time after the date
hereof, no estimate can be made of the number of shares of common stock that
each Selling Stockholder may retain upon the completion of the offering.
The
registration of these shares for resale does not necessarily mean that the
Selling Stockholder will sell any of the shares.
Name
of Selling Stockholder
|
Shares
Beneficially
Owned
Prior
to
This
Offering
|
Shares
Beneficially
Owned
Offered for
Selling
Stockholder
Account(1)
|
Shares
Beneficially
Owned
After This
Offering
|
Percentage
of
Shares
Beneficially
Owned
After
Offering
|
Jean
Paul Roy(2)
|
33,481,000
|
1,350,000
|
32,131,000
|
48.8%
|
Allan
J. Kent(3)
|
1,350,000
|
1,350,000
|
0
|
0%
|
Brent
J. Peters(4)
|
214,067
|
180,000
|
34,067
|
0%
|
Peter
R. Smith(4)
|
117,000
|
117,000
|
0
|
0%
|
Michael
J. Hudson(4)
|
140,000
|
140,000
|
0
|
0%
|
Dr.
Avinash Chandra(4)
|
151,100
|
100,000
|
51,100
|
0%
|
(1) The
shares of Common Stock offered pursuant to this Prospectus are issuable on
exercise of options granted under our 1998 Stock Incentive Plan. As of the
date
of this Prospectus, none of such options has been exercised.
(2) Mr.
Roy
is our President and Chief Executive Officer and is a Director of our company.
Mr. Roy also holds, as of July 25, 2006, inclusive of the shares beneficially
owned included for resale in this Prospectus, an aggregate of 33,481,000
shares
of Common Stock. Of such shares, an aggregate of 5 million shares are held
in
escrow pursuant to the terms of an agreement whereby we purchased the
outstanding capital stock of GeoGlobal Resources (India) Inc. from Mr. Roy.
Under the terms of the escrow agreement, Mr. Roy has the voting rights with
respect to these shares. Of the 33,481,000 shares, 1,350,000 shares are issuable
on exercise of options granted under the Plan at prices ranging from $1.10
to
$3.95 and expiring at various dates commencing August 31, 2006 through July
10,
2016. Mr. Roy is the sole stockholder of Roy Group (Barbados) Inc., a company
organized under the laws of Barbados, pursuant to which the services of Mr.
Roy
are provided to us at a fee of currently $350,000 per year. In addition,
Mr. Roy
is the sole stockholder of Roy Group (Mauritius) Inc., a company organized
under
the laws of Mauritius, which is a party to an agreement with us whereby we
have
agreed to transfer to that company one-half of our original 10% interest
under
our PSC in the KG Block and our rights under the related carried interest
agreement.
(3) Of
the
1,350,000 shares, 1,350,000 shares are issuable on exercise of options granted
under the Plan at prices ranging from $1.10 to $3.95 and expiring at various
dates commencing August 31, 2006 through July 10, 2016. Mr. Kent is our
Executive Vice President and Chief Financial Officer and is a Director. Mr.
Kent’s services to us are provided through D.I. Investments Ltd., a company
organized under the laws of Alberta of which Mr. Kent is the sole
stockholder.
(4) A
Director of our company.
PLAN
OF DISTRIBUTION
Following
the date of this Resale Prospectus, the Selling Stockholders may sell or
distribute some or all of the common stock issued on exercise of options
they
hold from time to time through underwriters or dealers or brokers or other
agents or directly to one or more purchasers, including pledgees, in
transactions (which may involve block transactions) or in privately negotiated
transactions (including sales pursuant to pledges), or in a combination of
such
transactions. Such transactions may be effected by the Selling Stockholders
on
the American Stock Exchange at market prices prevailing at the time of sale,
at
prices related to such prevailing market prices, at negotiated prices, or
at
fixed prices, which may be changed. Brokers, dealers, agents or underwriters
participating in such transactions as agent may receive compensation in the
form
of discounts, concessions or commissions from the Selling Stockholders (and,
if
they act as agent for the purchaser of such shares, from such purchaser).
Such
discounts, concessions or commissions as to a particular broker, dealer,
agent
or underwriter might be in excess of those customary in the type of transaction
involved.
Persons
who are pledges, donees, transferees, or other successors in interest of
any of
the named Selling Stockholders (including, but not limited to, persons who
receive shares from a named Selling Stockholder as a gift, partnership
distribution, or other non-sale-related transfer after the date of this Resale
Prospectus) may also use this Resale Prospectus and are included when we
refer
to Selling Stockholder in this Resale Prospectus. If necessary, we would
file a
supplement to this Resale Prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act of 1933 amending the list of Selling
Stockholders to include the pledgee, donee, transferee or other successors
in
interest as Selling Stockholders under this Resale Prospectus. Selling
Stockholders may sell the shares by one or more of the following methods,
without limitation:
|
·
|
block
trades (which may include cross trades) in which the broker or
dealer so
engaged will attempt to sell the shares as agent but may position
and
resell a portion of the block as principal to facilitate the
transaction;
|
|
·
|
purchases
by a broker or dealer as principal and resale by the broker or
dealer for
its own account;
|
|
·
|
an
exchange distribution or secondary distribution in accordance with
the
rules of any stock exchange or market on which the shares are
listed;
|
|
·
|
ordinary
brokerage transactions and transactions in which the broker solicits
purchases;
|
|
·
|
an
offering at other than a fixed price on or through the facilities
of any
stock exchange or market on which the shares are listed or to or
through a
market maker other than on that stock exchange or
market;
|
|
·
|
privately
negotiated transactions, directly or through
agents;
|
|
·
|
short
sales of shares and sales to cover short
sales;
|
|
·
|
through
the writing of options on the shares, whether the options are listed
on an
options exchange or otherwise;
|
|
·
|
through
the distribution of the shares by any Selling Stockholder to its
partners,
members or shareholders;
|
|
·
|
one
or more underwritten offerings;
|
|
·
|
agreements
between a broker or dealer and one or more of the Selling Stockholders
to
sell a specified number of the securities at a stipulated price
per share;
and
|
|
·
|
any
combination of any of these methods of sale or distribution, or
any other
method permitted by applicable law.
|
The
Selling Stockholders and any such underwriters, brokers, dealers or agents
that
participate in such distribution may be deemed to be “underwriters” within the
meaning of the Securities Act, and any discounts, commissions or concessions
received by any such underwriters, brokers, dealers or agents might be deemed
to
be underwriting discounts and commissions under the Securities Act. Neither
we
nor the Selling Stockholders can presently estimate the amount of such
compensation. We do not know of any existing arrangements between the Selling
Stockholders and any underwriter, broker, dealer or other agent relating
to the
sale or distribution of the Selling Stockholders’ securities. If necessary, we
will file a supplement to this Resale Prospectus under Rule 424(b)(3) or
other
applicable provision of the Securities Act to disclose any such arrangements
made known to us by the Selling Stockholders.
Under
applicable rules and regulations currently in effect under the Securities
Exchange Act of 1934, as amended, any person engaged in a distribution of
any of
the shares of common stock may not simultaneously engage in market activities
with respect to the common stock for a period of five business days prior
to the
commencement of such distribution. In addition, and without limiting the
foregoing, the Selling Stockholders will be subject to applicable provisions
of
the Exchange Act and the rules and regulations thereunder, including without
limitation Regulation M thereunder, which provisions may limit the timing
of
purchases and sales of any of the shares of common stock by the Selling
Stockholders. All of the foregoing may affect the marketability of the common
stock.
We
will
pay substantially all the expenses incident to this offering of the common
stock
to the public other than commissions and discounts of underwriters, brokers,
dealers or agents. We estimate these expenses will total $20,000. The Selling
Stockholders may indemnify any broker, dealer, agent or underwriter that
participates in transactions involving sales of the securities against certain
liabilities, including liabilities arising under the Securities Act.
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act if available, rather than under this Resale Prospectus. Rule 144 is
available for the sale of restricted securities after a period of twelve
months
has expired from the date the securities are purchased and fully paid for.
Under
the tacking provisions of Rule 144, the twelve-month period will begin to
run on
the date the shares of common stock were purchased and fully paid for. The
holding period for the shares issued on exercise of the common stock purchase
warrants and the compensation options begins on the date the consideration
for
the purchase is paid in full. Rule 144 also imposes limitations on the amount
of
securities that can be sold and the manner of sale of the shares during the
twelfth to twenty-fourth month period after the purchase of and payment in
full
for the securities. The limitation on the amount of securities that can be
sold
limits a Selling Stockholder to selling, including sales of shares made during
the preceding three months, an amount of shares not exceeding 1% of the shares
outstanding. This calculation is made without reflecting as outstanding shares
issuable on conversion or exercise of outstanding debt securities, options
or
warrants. The manner of sale provisions require that the shares be sold in
brokers’ transactions and that the person making the sale not solicit or arrange
for the solicitation of orders to purchase the securities in anticipation
of or
in connection with the sale or make any payment in connection with the offer
or
sale to any person other than the broker who executes the sale.
In
order
to be a broker’s transaction, the broker executing the sale can do nothing more
than execute the order to sell as agent for the person selling the shares
and
receive no more than the customary commission. In addition, the broker cannot
solicit or arrange for the solicitation of orders to buy the shares or be
aware
of circumstances indicating that the sale is a part of an unlawful distribution
of the shares in violation of the registration requirements of the Securities
Act. A notice of sale on Form 144 is to be filed with the U.S. Securities
and
Exchange Commission at the time of making a Rule 144 sale.
LEGAL
MATTERS
The
validity of the issuance of the common stock offered hereby has been passed
upon
for us by William S. Clarke, P.A., Princeton, New Jersey.
EXPERTS
The
consolidated financial statements of GeoGlobal Resources Inc. as of December
31,
2005 and December 31, 2004 and for the years ended December 31, 2005, 2004
and
2003, and for the cumulative period from inception on August 21, 2002 to
December 31, 2005 incorporated by reference in this Resale Prospectus have
been
audited by Ernst & Young LLP, Independent Registered Public Accounting Firm
as set forth in their report thereon incorporated by reference herein, and
are
included in reliance upon such report, given on the authority of such firm
as
experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We
are a
public company and file annual, quarterly and current reports, proxy statements
and other information with the Securities and Exchange Commission (SEC).
Our SEC
filings are available to the public over the Internet at the SEC's web site
at
http://www.sec.gov.
You may
also read and copy any document we file at the SEC's public reference room
at
100 F Street, N.E., Washington, D.C. 20549. You may obtain information on
the
operation of the SEC's public reference room in Washington, D.C. by calling
the
SEC at 1-800-SEC-0330. We also file information with the American Stock
Exchange.
The
SEC
allows us to "incorporate by reference" into this prospectus the information
we
file with the SEC in other documents, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus,
and
information that we file later with the SEC will automatically update and
supersede this information. Unless expressly incorporated into this Registration
Statement, a report furnished to the SEC on Form 8-K under the Exchange Act
shall not be incorporated by reference into this Registration Statement.
We
incorporate by reference the documents listed below and any future filings
we
make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange
Act,
until the offering of securities by this prospectus is completed:
·
|
our
Quarterly Report on Form 10-QSB for the quarter ended March 31,
2006,
filed with the SEC on May 12, 2006;
|
·
|
our
Annual Report on Form 10-KSB for the fiscal year ended December
31, 2005,
filed with the SEC on April 13, 2006;
|
|
the
description of our common stock contained in our registration statement
on
Form 8-A (File No.001-32158) filed with the SEC on April 27,
2004.
|
All
documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14
or
15(d) of the Exchange Act after the date of this prospectus and prior to
the
termination of the offering are incorporated by reference into this
prospectus.
We
have
filed with the SEC a registration statement on Form S-8 (the “Registration
Statement”) under the Securities Act of 1933, as amended (the “Securities Act”),
with respect to shares issuable on exercise of options granted under our
1998
Stock Incentive Plan. This prospectus, which constitutes a part of that
Registration Statement, does not include all the information contained in
that
Registration Statement and its exhibits. For further information with respect
to
us and our Common Stock, you should consult the Registration Statement and
its
exhibits. Statements contained in this Prospectus concerning the provisions
of
any documents are necessarily summaries of those documents, and each statement
is qualified in its entirety by reference to the copy of the document filed
with
the SEC. You may request a copy of these filings at no cost, by writing or
telephoning us at the following address or telephone number:
GeoGlobal
Resources Inc.
605
- 1st
Street SW, Suite 310
Calgary,
Alberta T2P 3S9
Attention:
Investor Relations
403-777-9250
Information
contained on our website is not part of this Prospectus. You should rely
only on
the information contained or incorporated by reference in this Prospectus.
We
have not authorized anyone to provide you with information different from
that
contained in this Prospectus. The information contained in this Prospectus
is
accurate only as of the date of this Prospectus and, with respect to material
incorporated herein by reference, the dates of such referenced material.
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation of Documents by Reference.
The
SEC
allows us to “incorporate by reference” information into this registration
statement, which means that we can disclose important information to you
by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this registration statement,
except for any information superseded by information in this registration
statement.
The
following documents filed by our company with the SEC are incorporated herein
by
reference:
(a)
|
Our
Annual Report on Form 10-KSB, filed on April 13,
2006;
|
(b)
|
Our
Quarterly Report on From 10-QSB for the quarter ended March 31,
2006,
filed with the SEC on May 12, 2006;
|
(c)
|
The
description of our common stock contained in the Registration Statement
on
Form 8-A filed with the SEC on April 27, 2004, including any amendments
or
reports filed for the purpose of updating such
description.
|
All
reports (other than portions of Current Reports on Form 8-K furnished and
not
filed, unless otherwise indicated therein) filed pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this registration
statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which de-registers all
securities then remaining unsold shall be deemed to be incorporated by reference
into this registration statement and to be a part hereof from the date of
filing
such documents. Any statement contained in a document incorporated or deemed
to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this registration statement to the extent that a statement
contained in any subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such statement.
You
may
read and copy any reports, statements or other information we have filed
at the
SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
Public Reference Rooms. Our filings are also available on the Internet at
the
SEC’s website at http://www.sec.gov.
Item
4. Description of Securities.
Not
applicable.
Item
5. Interests of Named Experts and Counsel.
Not
applicable.
Item
6. Indemnification of Directors and Officers.
Section
145 of the Delaware General Corporation Law provides generally that a
corporation shall have the power, and in some cases is required, to indemnify
an
agent, including an officer or director, who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than
an action by or in the right of the corporation) by reason of the fact that
he
or she is or was a director, officer, employee or agent of the corporation,
against certain expenses, judgments, fines, settlements, and other amounts
under
certain circumstances.
Our
Certificate of Incorporation limits, to the maximum extent permitted by Delaware
law, the personal liability of our directors and officers for monetary damages.
Our Bylaws require us to indemnify our directors and executive officers to
the
fullest extent not prohibited by Delaware law or any other applicable law,
and
permit us to indemnify its other officers. A summary of the circumstances
in
which such indemnification is provided for is contained herein, but that
description is qualified in its entirety by reference to Article 5.1 of our
Bylaws.
Under
our
Bylaws, we must generally advance all expenses incurred by our directors
and
executive officers who are party or threatened to be made party to any action
by
reason of the fact that each such director or executive officer is or was
a
director or executive officer of our company. Each advancement shall only
be
made if such director or executive officer undertakes to repay any such
advancement if it is ultimately determined that such person is not entitled
to
be indemnified under our Bylaws or otherwise. Our Bylaws further provide
that we
may purchase indemnification insurance on a person required or permitted
to be
indemnified under the Bylaws.
These
indemnification provisions may be sufficiently broad to permit indemnification
of our officers and directors for liabilities (including reimbursement of
expenses incurred) arising under the Securities Act.
From
time
to time, we may enter into individual contracts with any or all of our directors
or officers regarding indemnification and advances, to the fullest extent
permitted under Delaware law. We believe that these agreements and arrangements
are necessary to attract and retain qualified persons as directors and
officers.
We
carry
directors’ and officers’ liability insurance coverage which insures our
directors and officers and the directors and officers of our subsidiaries
in
certain circumstances.
Item
7. Exemption from Registration Claimed.
Not
Applicable.
Item
8. Exhibits.
Exhibit
Number
|
|
Description
|
|
|
|
4.1
|
|
1998
Stock Incentive Plan*
|
|
|
|
5.1
|
|
Opinion
of William S. Clarke, P.A.
|
|
|
|
23.1
|
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
|
23.2
|
|
Consent
of William S. Clarke, P.A. (included in Exhibit 5.1).
|
|
|
|
__________________________
*
Incorporated by reference to the Registrant’s registration statement on Form S-8
(File No. 333-74245).
Item
9. Undertakings.
(a) We
hereby
undertake:
|
(1)
|
To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration statement:
|
(i) to
include any prospectus required by Section 10(a)(3) of the Securities Act,
as amended;
|
(ii)
|
to
reflect in the prospectus any facts or events arising after the
effective
date of this registration statement (or the most recent post-effective
amendment hereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in this registration
statement; and
|
(iii)
to
include any material information with respect to the plan of distribution
not
previously disclosed in this registration statement or any material change
to
such information in this registration statement;
PROVIDED,
HOWEVER, that undertakings set forth in paragraphs (i) and (ii) above do
not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by us pursuant
to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference
in
this registration statement.
|
(2)
|
That,
for the purpose of determining any liability under the Securities
Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the
offering of such securities at the time shall be deemed to be the
initial
bona fide offering thereof.
|
|
(3)
|
To
remove from registration by means of a post-effective amendment
any of the
securities being registered which remain unsold at the termination
of the
offering.
|
|
(4)
|
That,
for purposes of determining any liability under the Securities
Act, each
filing of our annual report pursuant to Section 13(a) or 15(d)
of the
Exchange Act that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement
relating to
the securities offered herein, and the offering of such securities
at that
time shall be deemed to be the initial bona fide offering
thereof.
|
|
(5)
|
Insofar
as indemnification for liabilities arising under the Securities
Act may be
permitted to directors, officers and persons controlling
our company
pursuant to the foregoing provisions, or otherwise, we have
been advised
that in the opinion of the SEC such indemnification is against
public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such
liabilities (other than the payment by our company of expenses
incurred or
paid by a director, officer or controlling person of our
company in the
successful defense of any action, suit or proceeding) is
asserted by such
director, officer or controlling person in connection with
the securities
being registered, our company will, unless in the opinion
of our counsel
the matter has been settled by controlling precedent, submit
to a court of
appropriate jurisdiction the question whether such indemnification
by us
is against public policy as expressed in the Securities Act
and will be
governed by the final adjudication of such issue.
|
Signatures
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-8 and has duly caused this Registration Statement to be
signed
on its behalf by the undersigned, thereunto duly authorized in the city of
Calgary, Province of Alberta, Canada on the 27thh
day of
July, 2006.
|
|
|
|
GeoGlobal
Resources Inc. |
|
|
|
|
By: |
/s/ /s/
Jean Paul Roy |
|
Jean Paul Roy, President and Chief
Executive
Officer |
|
/s/
Allan Kent
(pursuant to power of
attorney)
|
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
/s/ Jean Paul Roy
Jean Paul Roy
/s/ Allan Kent
(pursuant to power of attorney)
|
Director, President and Chief Executive
Officer (Principal Executive Officer)
|
July
27, 2006
|
|
|
|
/s/ Allan J. Kent
Allan J. Kent
|
Director, Executive Vice President and
Chief Financial Officer (Principal
Financial
and Accounting Officer)
|
July
27, 2006
|
|
|
|
/s/ Brent J. Peters
Brent J. Peters
s/ Allan Kent
(pursuant to power of attorney)
|
Director
|
July
27, 2006
|
|
|
|
/s/ Peter R. Smith
Peter R. Smith
/s/ Allan Kent
(pursuant to power of attorney)
|
Director
|
July
27, 2006
|
|
|
|
/s/
Michael J. Hudson
Michael J. Hudson
/s/ Allan Kent
(pursuant to power of attorney)
|
Director
|
July
27, 2006
|
|
/s/
Avinash Chandra
Avinash Chandra
/s/ Allan Kent
(pursuant to power of attorney)
|
Director
|
July
27, 2006
|
|
GeoGlobal
Resources Inc.
Power
of Attorney
KNOW
ALL
MEN BY THESE PRESENTS that each of the undersigned directors and officers
of
GeoGlobal Resources Inc., a Delaware corporation, which is filing a Registration
Statement on Form S-8 with the Securities and Exchange Commission, Washington,
D.C. 20549 under the provisions of the Securities Act of 1933, as amended
(the
“Securities Act”), hereby constitutes and appoints Jean Paul Roy and Allan Kent,
and each of them, the individual’s true and lawful attorneys-in-fact and agents,
with full power of substitution and re-substitution, for the person and in
his
name, place and stead, in any and all capacities, to sign such Registration
Statement and any or all amendments, including post-effective amendments,
to the
Registration Statement, including a Prospectus or an amended Prospectus therein
and any registration statement for the same offering that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act, and all other
documents in connection therewith to be filed with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to
all
intents and purposes as he might or could do in person, hereby ratifying
and
confirming all that said attorneys-in-fact as agents or any of them, or their
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
/s/ Jean Paul Roy
Jean Paul Roy
|
Director, President and Chief Executive
Officer (Principal Executive Officer)
|
July
27, 2006
|
|
/s/ Allan J. Kent
Allan J. Kent
|
Director, Executive Vice President
and
Chief Financial Officer (Principal
Financial
and Accounting Officer)
|
July
27, 2006
|
|
/s/ Brent J. Peters
Brent J. Peters
|
Director
|
July
27, 2006
|
|
/s/ Peter R. Smith
Peter R. Smith
|
Director
|
July
27, 2006
|
|
s/ Michael J. Hudson
Michael J. Hudson
|
Director
|
July
27, 2006
|
|
/s/ Avinash Chandra
Avinash Chandra
|
Director
|
July
27, 2006
|
|
GeoGlobal
Resources Inc.
REGISTRATION
STATEMENT ON FORM S-8
Index
to Exhibits
Exhibit
Number
|
|
Description
|
|
|
|
4.1
|
|
1998
Stock Incentive Plan*
|
|
|
|
5.1
|
|
Opinion
of William S. Clarke, P.A.
|
|
|
|
23.1
|
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
|
23.2
|
|
Consent
of William S. Clarke, P.A. (included in Exhibit 5.1).
|
|
|
|
__________________________
*
Incorporated by reference to the Registrant’s registration statement on Form S-8
(File No. 333-74245).