AGR Tools Inc.'s wholly owned subsidiary AGR Energy Holding Inc. announced they have signed an agreement to acquire a 300 acre oil and gas lease in Navarro County, Texas from Corsicana Oil LLC (or the "Vendor"), collectively referred to as the Burke Lease.
Under the terms of the agreement, the Company would receive 100% ownership in the project by paying $100,000 at closing, and up to $200,000 out of revenue produced by the project. The company will also assume the vendor's plugging liability currently valued at $200,000. There will be no common shares of AGR issued in connection with this agreement.
The Burke Project represents an opportunity to use enhanced recovery techniques to reactivate 51 historically producing wells, a much less uncertain opportunity than a completely undrilled project. Management believes with several steps of due diligence completed, the acquisition may close as soon as August 15, 2012, or 30 days.
The consummation of the transaction will be contingent on the negotiation of final acquisition documents.
"It has always been one of AGR's core principles to focus efforts in Texas as we have strong ties and knowledge within the region-- and the Burke project is a great overall fit and opportunity. Management is very familiar with the project and several steps in our due diligence process are completed which should allow for an efficient closing," CEO of AGR Mr. Vern Wilson commented.
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