Flowing Energy has entered into
a purchase and sale agreement to sell all of its interest in the Monitor
area of Alberta for total proceeds of $14.15 million and the assumption
or buyout of the vendors capital leases totaling $2.5 million. The sale
will have an effective date of January 1, 2005. Flowing's estimated
current production average from the Monitor area is 20 barrels per day
of oil and 2.1 million cubic feet per day of natural gas. The sale
includes Flowing's 100% working interest gas processing facility, sales
and gathering pipelines, approximately 12,000 net acres of undeveloped
land and proprietary seismic data. This sale is subject to property
environmental audit and regulatory approval. Flowing has received a
$500,000 deposit to be applied to the purchase price at closing. The
sale is expected to close on or before February 25, 2005.
Proceeds will be used to discharge Flowing's $2.5 million Monitor gas
plant capital lease, with the balance applied to bank debt.