Gallic Energy has entered into an arm's length letter of intent agreement with Sahara Energy to negotiate the acquisition by Gallic of Sahara's Alberta and Saskatchewan properties for consideration of approximately 13,500,000 class A common shares of Gallic and the assumption of $500,000 of Sahara's secured debt. Gallic has made a refundable deposited of $50,000 under the terms of the letter of intent, to be applied against the purchase price at closing. The letter of intent also contemplates the appointment of one additional director to the board of directors of Gallic in conjunction with the Acquisition, who will be a nominee of Sahara.
The Acquisition is subject to the completion of due diligence and negotiation of a formal agreement, as well as customary closing conditions and the receipt of all applicable regulatory and TSX Venture Exchange approval, as well as applicable Gallic disinterested shareholder approval in accordance with TSX Venture Exchange requirements.
The properties currently produce approximately 60 boe/d of low risk heavy oil in the greater Lloydminster area. These assets align with Gallic's strategy to acquire and consolidate low risk oil and gas properties to bring immediate production, cashflow and reserves to the Company.
Key attributes of the properties are:
Mr. Mark Woods, Gallic's President and COO commented, "This property acquisition is expected to bring immediate production and low risk development opportunities and additional team strength which compliments the Gallic team. These assets combined with our previously announced acquisition of Oklahoma assets positions the Company well for future production, reserves and cashflow growth."
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