PrimeGen Energy announced Wednesday that it has signed a Letter of Intent ("LOI") with a private holding company to sell a seventy five percent (75%) working interest in its Timan-Pechora assets in Russia in proposed well numbers 11 through 30, or the last 20 wells of the 30 well program. PrimeGen will continue to own its original interest in wells 1 through 10. The terms being negotiated are for an all cash sale, the details of which will be announced when finalized.
The proposed sale is subject to the ability of the purchaser to escrow the funds in trust and other customary conditions, including the execution of a definitive agreement, all of which is currently scheduled to be completed by mid-September.
The proceeds of the proposed sale will be used to expand and develop the previously announced acquisition on March 31, 2009, of a 100% interest in the Rodnikovskogo property in Russia. Recently completed seismic data on this property indicates that the potential reserves could be greater than those of the Timan-Pechora project.
Company President, Robert Charlton said, "The sale of this interest would give the Company the capital injection required to immediately pursue an accelerated drill program on the Rodnikovskogo property. The funds made available from this sale will have no cost of capital associated to the development of this project and will add to the net revenues of the Company and increase shareholder value."
The Company intends to drill and complete 26 additional wells during the next twelve months to further develop the oil reserves of the Timan-Pechora project. Oil production is projected to reach 35,000 barrels of oil per day when the project is fully developed.
PrimeGen Energy Corp. is an oil and gas exploration Company whose primary focus is exploring and developing high potential unconventional resource plays. The Company's strategy and development assets are focused on a prolific and historic oil and natural gas resource play in Krasnoarmeiskome District, Saratovskoi Oblast in Russia. The Company is headquartered in Bridgewater, NJ and has offices in Moscow, Russia. PrimeGen Energy plans to use its comparative advantages in certain geographic regions to expand rapidly through strategic acquisitions of small oil and gas producing entities and production assets including wells, properties, operating equipment, and pipelines.
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