HOUSTON, Sept. 29, 2014 /CNW/ -- Enhanced Oil Resources Inc. (TSX-V: EOR; OTCQX: EORIF) ("EOR") announces that its indirect wholly-owned subsidiaries, Ridgeway Arizona Oil Corp. and EOR Operating Company (collectively with EOR, the "Company"), have executed a definitive sales and purchase agreement (the "Agreement") with an unrelated third party group consisting of Desert Production, Inc. of Midland, Texas and Penroc Oil Corporation of Hobbs, New Mexico (together, the "Purchaser"), for the sale of all of the Company's rights, title and interest in the Crossroads oilfield, located in Lea County, New Mexico. The purchase price, which is payable in cash at closing, is US$10.0 million, subject to certain post-closing adjustments and conditions. Riviera-Ensley Energy Advisors ("Riviera"), a full service acquisition and divestiture transaction advisor serving the energy sector for over 20 years, acted as the marketing agent and broker for the Company in connection with this arms-length transaction. More than twenty entities reviewed the Crossroads field's geological and operating information, with the Company receiving four bids, including the Purchaser's bid. The Company has agreed to pay Riviera a fee of US$210,000 in cash upon closing of the sale with the Purchaser for conducting the marketing and solicitation of bids for the property interests. The Agreement is subject to a number of closing conditions including regulatory approval.
The transaction is expected to close on or before its currently scheduled closing date of October 15, 2014, which may be extended by mutual agreement, with a post-closing settlement following receipt of all required state of New Mexico regulatory approvals. Upon the sale closing, the effective date for the transaction will be September 1, 2014, the date upon which the Purchaser assumes financial obligations and consequences arising from the operation of the field. As the transaction constitutes a "Reviewable Disposition" within the meaning of Policy 5.3 of the TSX Venture Exchange, the transaction is subject to the acceptance for filing by the TSX Venture Exchange.
As previously reported, following a costly work-over in the Crossroads field in the first quarter of 2014, the Company decided not to incur further development costs in the Crossroads field associated with high risk wellbores, undertook a number of initiatives to raise additional funds and has restricted its operations to those matters necessary to sustain production, reduced personnel and overhead and postponed certain remedial operations.
The Company intends to use the proceeds from the disposition of the Crossroads field to pursue new opportunities that diversify the Company's asset base, pay accounts payable and for general corporate purposes.
About Enhanced Oil Resources Inc.
Enhanced Oil Resources Inc. is an early-stage company, with a principal goal of increasing crude oil and natural gas production through enhanced oil recovery ("EOR") and infill drilling projects it is initiating in the Permian Basin on oil fields acquired by the Company in 2007 and 2008 for that purpose.
ON BEHALF OF THE BOARD OF DIRECTORS
Barry D Lasker, CEO
Certain statements contained herein are "forward-looking statements" and "forward-looking information" under applicable securities laws, including statements regarding beliefs, plans, expectations or intentions regarding the future relating to Enhanced Oil Resources Inc.'s operations, business prospects, expansion plans and strategies. Such forward-looking statements include, among others, that the transaction is expected to close on or before its currently scheduled closing date of October 15, 2014, and that the Company intends to use the proceeds from the disposition of the Crossroads field to pursue new opportunities that diversify the Company's asset base, pay accounts payable and for general corporate purposes.
Forward-looking information typically contains statements with words such as "intends", "anticipate", "estimate", "expect", "potential", "could", "plan" or similar words suggesting future outcomes. Readers are cautioned not to place undue reliance on forward-looking statements because it is possible that expectations, predictions, forecasts, projections and other forms of forward-looking information will not be achieved. Forward-looking statements are based on the opinion and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Although Enhanced Oil Resources Inc. believes that the expectations reflected in such forward-looking statements are reasonable, Enhanced Oil Resources Inc. can give no assurance that such expectations will prove to be correct. Assumptions upon which such forward-looking statements are based include that all regulatory approvals will be received, that the transaction will close on or before its currently scheduled closing date of October 15, 2014 or such extended closing date as may be mutually agreed to and that there will be sufficient proceeds from the disposition of the Crossroads field to pursue new opportunities that diversify the Company's asset base, pay accounts payable and for general corporate purposes. Risks and factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include that all regulatory approvals are not received, that the transaction does not close on or before its currently scheduled closing date of October 15, 2014 or any mutually agreed to extended closing date or at all or that, if applicable, an extended closing date is not mutually agreed to, that the proceeds of disposition are not sufficient to pursue new opportunities that diversify the Company's asset base, pay accounts payable and for general corporate purposes, and that no new opportunities that diversify the Company's asset base are pursued or that any such opportunities that are pursued are not successful. Readers should be aware that the list of factors, risks and uncertainties set forth above are not exhaustive. Readers should refer to Enhanced Oil Resources Inc.'s current filings, which are available at www.sedar.com, for a detailed discussion of these factors, risks and uncertainties. The forward-looking statements or information contained in this news release are made as of the date hereof and Enhanced Oil Resources Inc. undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable laws or regulatory policies.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
SOURCE: Enhanced Oil Resources Inc.
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