Blugrass Energy on Thursday announced that it has entered into letters of intent with multiple parties for the acquisition of certain interests in the Mississippian play in Osage and Woods Counties, Oklahoma.
The assets are in two counties:
•Approximately 90% working interest ("WI") in 9 Mississippian wells on 1,680 gross acres held by production in Osage County, Oklahoma ;
•A 19.5% working interest in approximately 4,000 gross acres representing up to 25 potential drilling locations based on typical 160 acre spacing common in the horizontal Mississippian play;
The upside of the acquisition contemplated by the letters of intent consists of (a) opportunities to fracture stimulate the Osage County wells, (b) additional Layton drilling opportunities, and (c) continuing development activities in the Woods County leasehold position -- where up to five new wells are expected to be drilled over the next 18 months.
The acquisition is subject to due diligence, financing and the conversion of at least 80% of currently outstanding debt to common stock at $0.05 per share.
In order to accommodate the share issuances associated with the debt conversion, the asset acquisitions and any future capital raising initiatives, Blugrass is also planning to increase its authorized shares.
We are excited about entering the Mississippian play with this initial acquisition. The Mississippian play has recently received considerable attention in the industry and press as horizontal drilling and fracture stimulation techniques have unlocked considerable reserve and production potential from the area in which these wells are located.
Bluegrass is continuing discussions with several parties about additional acquisition and partnering opportunities.
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