Jayhawk Acquires Light Oil Play in North Dakota
Jayhawk Energy, Inc. reported the signing of a purchase and sale agreement for the acquisition of the Candak property from JED OIL (USA) INC.
This acquisition places Jayhawk into a daily 65bbls net of light oil production and operation in the Candak property. Jayhawk also acquires a 15,500-acre land position with this acquisition. The lands are strategic in a highly active area by other operators in the Williston Basin play in North Dakota and across the border into Canada. Candak's stable production of light oil from its low well count and significant undeveloped land base places Jayhawk in a high potential growth position to develop the light oil play. The closing on this transaction is expected to occur on January 25, 2008.
"This is the first of our strategic acquisitions," stated Lindsay Gorrill, President & CEO of Jayhawk Energy, "as we continue to fulfill our strategic plan in targeting light crude opportunities in addition to developing our Uniontown CBM play in Kansas."
Gorrill has identified multiple upside potentials of adding multi laterals in existing horizontal wells and stimulations to existing wells, stepping out from existing stable producers, and executing additional drilling targets in single or multi lateral new drills in the significant acreage size. "The Candak property is a strategic start with a length of integrity and upsides over time for Jayhawk and its shareholders," Mr. Gorrill added.
To finance the acquisition of the Candak property, Jayhawk completed a private placement of approximately $4,000,000. Specifically, Jayhawk sold 2,666,667 units at a purchase price of $1.50 per unit, each unit consisting of (a) one share of common stock, $.001 par value per share and (b) one warrant which will provide to the holder the right to purchase one share of Jayhawk's common stock at a purchase price of $1.60 and which expires one year from the date that Jayhawk accepted the subscription.