CSI To Acquire Oil & Gas Rights On 10,000 Acres In Eastern Kentucky
Consolidation Services, Inc., engaged in acquiring land for organic farming operations and developing potential energy reserves on some of its acquired properties announces the signing of an agreement to acquire one hundred (100%) percent of the mineral rights for oil and natural gas on approximately ten thousand (10,000) acres of land in Eastern Kentucky for $1 million. CSI will use a combination of $200,000 cash and $800,000 (415,584 restricted shares valued at $1.925 per share) of stock to close the transaction.
CSI will pay $20,000 by April 8, 2008 and $5,000 per month for up to a six month due diligence period, with all such advances on up to $45,000 in the aggregate, to be applied to the $200,000 cash consideration due at closing which is to be on or before October 1, 2008. The shares will be sold subject to a lock-up agreement, with weekly sales of up to 7,992 shares commencing on April 1, 2009. These oil and gas rights are located on the same acreage that the Company recently agreed to acquire a fifty percent equity ownership in the land and coal rights from an unaffiliated entity.
"Utilizing common shares for the acquisition of oil and natural gas on this sizable tract of land enables CSI to continue to accelerate its strategic objective to generate cash flow from the energy resources believed to be situated on the subject property while allowing the sellers the opportunity to realize greater value from the sale of the assets. We believe the transaction will provide long term benefits to our shareholders," said Dr. Johnny R. Thomas, President/CEO of CSI.