Paxton announced that on November 14, 2011, the Company entered into a definitive acquisition agreement, which is expected to close on or before December 15, 2011. Paxton will acquire a 2% Override Interest in the entire Mustang Island 818-L Lease, covering 14,400 acres in the Gulf of Mexico, with a 10.35% Working Interest in the recently drilled I-1 well, located on the lease, from Black Cat Exploration & Production, LLC ("Black Cat"), a Texas limited liability company.
The agreement calls for a total purchase price of five-million seven hundred fifty thousand dollars ($5,750,000). Black Cat will receive an initial payment of two hundred fifty thousand dollars ($250,000) and a note in the amount of one million dollars ($1,000,000). The note is payable in monthly installments of Two Hundred Fifty Thousand Dollars ($250,000) every 30 days, from the closing, with interest of 8% per annum on the balance. The remainder of the Purchase Price will be paid at closing, through the issuance of a total of forty-five million (45,000,000) shares of common stock of Paxton. The closing of the agreement is subject to the satisfaction of a number of conditions precedent, including but not limited to the continued accuracy of the representations and warranties being made as of the closing date and the satisfaction of due diligence regarding seller's title to the assets being transferred.
"We are pleased to be able to acquire a Working Interest in a producing property," said Charles F. Volk, Jr., Chairman and CEO of Paxton. "This acquisition exemplifies Paxton's business strategy of acquiring properties with proved and probable reserves and then developing the fields by reworking the existing wells and drilling new wells."
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