Avro Energy has entered into a letter agreement to acquire various oil leases near Hosston, Louisiana, from a private oil and gas operator.
Under the terms of the agreement, the Company has agreed to pay a total of $100,000 upon the signing of a formal agreement on or before August 30, 2009.
The Company will purchase the Hoss Holmes Lease located near Hosston, Louisiana. The purchase includes 22 wells, of which 13 wells are producing, with another 7 wells needing production equipment, and 2 wells which are disposal wells. In addition, the agreement includes the purchase of all of the equipment associated with these wells.
Also, as part of the agreement, the Company has been granted the option to purchase all of the remaining oil and gas assets of a private Louisiana oil and gas operator for $2,500,000. The additional leases will include 180 wells, currently perforated in the Nachatosh formation as well as all of the oil production and workover equipment owned by the private corporation. All oil and gas leases covered in this agreement are subject to a 20% overriding royalty.
Donny Fitzgerald, the Company's Vice-President of Operations, will be primarily responsible for overseeing this project. Mr. Donny Fitzgerald has over 20 years experience in Oil and Gas Operations in the United States and will be a valuable asset to the Company's growth. Under Mr. Fitzgerald's direction, the Company intends to continue its primary focus of successfully acquiring and producing oil assets in Northern Louisiana.
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