ZaZa to Sell Texas Acreage
ZaZa Energy, LLC, a wholly-owned subsidiary of ZaZa Energy Corporation, announced that it has entered into a purchase and sale agreement to sell approximately 10,000 net acres of the Company's properties located in Fayette, Gonzalez and Lavaca Counties, Texas, which the Company refers to as its Moulton properties. This transaction includes all of the Company's interest in seven producing wells located in Moulton. The total cash purchase price for the approximately 10,000 net acres and associated production is approximately $43.3 million. The closing of the sale is expected to occur during the second quarter of 2013 and net proceeds from the sale, after customary closing purchase price adjustments and expenses, are expected to be ~$42 million. The closing is subject to normal closing conditions and the amendment of ZaZa's securities purchase agreement for its senior secured notes.
The Company also announced that it has executed a purchase and sale agreement to sell the remaining acreage in its Moulton properties for approximately $9.2 million. This transaction is also expected to close during the second quarter of 2013 and is subject to normal closing conditions.
Commenting on the announcement, Todd A. Brooks, president and CEO of ZaZa stated, "As part of the Hess division of assets in 2012, we received cash and a significant amount of acreage in the Eagle Ford play. We are in the process of monetizing select assets in order to improve our balance sheet and high grade our resource base with a focus on the Eaglebine. We believe these independent transactions are a testament to the strength of our technical and land teams, as we originally evaluated and leased this acreage in a short period of time for the benefit of our Eagle Ford joint venture."
ZaZa intends to use the net proceeds from both transactions to fund a portion of capital expenditures for exploration on its other properties and further reduce the principal amount of its senior secured notes.
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