Imperial Petroleum has signed a letter of intent to acquire approximately 20 oil wells located in Louisiana from an undisclosed seller. Under the terms of the sale, the Company will pay the seller (i.) $350,000 in the form of a Promissory Note with a one-year term secured by 1.75 million shares of the Company’s stock; (ii.) 1.0 million shares of the Company’s restricted common stock and (iii.) a twenty-five percent back-in after payout interest to the seller. The deal is subject to a mutually acceptable Purchase and Sales Agreement.
"The Louisiana acquisition has proved developed reserves of approximately 200,000 barrels of oil based on engineering estimates,” Jeffrey T. Wilson, President of Imperial said. “We will need to spend approximately $550,000 to increase production by about 60 Bopd through low-risk repair workovers on these shallow wells. Current daily production is about 3-5 Bopd from two active wells. We will need to raise the development capital or leverage our existing production in order to fund the project, however, we believe that purchasing oil reserves at around $3.38/bbl in today’s environment is an excellent acquisition."
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