Valkyries Petroleum to Sell U.S. Properties to Newmex Minerals
Valkyries Petroleum has signed a letter of intent with Newmex Minerals Inc. to sell all of its U.S. oil and gas properties to Newmex. The properties are comprised of leasehold and royalty interests in California, Texas and Louisiana (including production from oil and gas wells in the South Texas Queen City trend), the rights to an offshore OCS block (Mustang Island Area, East Addition, Area Number TX3A, Block 736), and a strategic working interest investment in Rincon Energy Partners LLC, a U.S. based oil and gas prospect generation company specializing in Gulf Coast and California oil and gas exploration. The net remaining reserves associated with these assets are approximately 99 Mboe Proved and 48 Mboe Probable, based on an independent evaluator's assessment of working interest plus royalty interest production (Ryder Scott September 1, 2005 - Constant Price Parameters).
In consideration, Valkyries will receive an upfront cash payment of US $4.6 million and a potential deferred bonus payment. Any bonus payment will be calculated on the basis of US $1 per oil equivalent barrel of additional net proved reserves in respect of 3 selected properties, effective on the second anniversary of the transaction and as certified by an independent reserves evaluator acceptable to both parties. The transaction will be effective as of September 1, 2005 and is subject to all requisite regulatory approvals. No finder's fee is payable in respect of the transaction.
Certain insiders of Valkyries are also insiders of Newmex and, as such, the transaction constitutes a non-arm's length acquisition and a Reviewable Transaction under the rules and policies of the TSX Venture Exchange.
Valkyries President and CEO Keith Hill stated, "While we have enjoyed a great deal of success on our U.S. properties during the start-up phase of the Company, the size and scale of the reserves are no longer material to our company's objectives. The structure of the deal will provide funding and allow us to focus on developing our core assets in Russia while retaining some of the upside potential through the deferred bonus payments."
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Company: Newmex Minerals more info
- Valkyries Petroleum to Sell U.S. Properties to Newmex Minerals (Dec 23)