The acquisition provides current net production to Pyramid's interest of 340 barrels of oil equivalent per day (boe/d), more than doubling the Company's current production of 305 boe/d. The signing and exercise of an option for this acquisition was previously announced on January 31, 2007 and February 28, 2007 respectively.
Pyramid also announced the extension of the final closing date for its offering of up to $2,025,000 of 12 percent subordinated convertible debentures to on or about April 16, 2007.
Mansoor Anjum, President of Pyramid, commented, "This acquisition makes the Gulf of Mexico a core area for the Company. We intend to develop further strategies to increase our reserves and cash flow in the Gulf. The acquisition adds to the company's net asset value (NAV) and we expect further development of exploration opportunities to provide significant additional value to the Company."
The contracted purchase price for the acquisition is US$7 million with an effective date of September 1, 2006. The purchase price, along with US$3.1 million, for a plugging and abandonment bond and closing costs, has been funded with a combination of debt, production credits, deferred payments to the seller and cash.
The 340 boe/d production of the acquisition consists of 190 barrels per day (bbls/d) of oil and 900 thousand cubic feet per day (Mcf/d) of gas. The Company has substantial potential to increase production and reserves of the acquisition by completing the behind pipe non producing horizons.
With regard to the extension of Pyramid's final closing date for its offering of up to $2,025,000 of 12 percent subordinated convertible debentures to on or about April 16, 2007, the first closing of the offering, totaling $644,000, was announced on February 28, 2007. Research Capital Corporation, of Calgary, Alberta, is acting as agent for this offering on a best efforts basis. The proceeds from the offering will be used for general corporate purposes.
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