Petro Closes Williston Basin Acquisition
Petro Resources has successfully closed its previously announced Williston Basin Acquisition.
As partial consideration for the Acquisition, the Company paid cash consideration of $10,000,000 and issued 3,144,655 shares of common stock that are subject to the Securities and Exchange Commission Section 144 restrictions. In connection with the Acquisition, the Company secured a $75 million credit facility arranged by Petrobridge Investment Management, LLC. Initial advances under the credit facility were used to partially fund the purchase consideration of the Acquisition, and to fund related developmental capital expenditures associated with the properties. Future advances under the credit facility for acquisitions and development capital are subject to the approval of the lender.
The Acquisition consists of an approximately 43% working interest in 15 producing oil fields located in the Williston Basin of North Dakota. The Acquisition includes approximately 15,000 acres and approximately 150 wells. The acquired fields are all possible water flood candidates for enhanced recovery operations and five of the 15 fields are currently in various stages of water flood development. The current production is approximately 260 barrels of oil per day net to the Company's interest with incremental production anticipated from current drilling operations. Based on engineering studies by Cawley, Gillespie & Associates, Inc. and analog data of other such water flood projects in the Williston Basin, the Acquisition could add as much as 10.4 million barrels of additional oil reserves net to the Company's interest.
In addition to the acquisition of a working interest in the producing properties, the transaction also provides for a joint venture involving other exploration and water flood opportunities identified within the region.
Merrill Lynch acted as financial advisor and placement agent to the Company. UCX Western LLC, a privately owned company located in Denver, Colorado, was engaged to facilitate the transaction on behalf of the Company.
Petro Resources Corporation is an independent exploration and production company focused on domestic lease acquisitions, exploration, and oil and gas production.
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