HOUSTON, Sept. 4, 2014 /CNW/ - Enhanced Oil Resources Inc. (TSX-V: EOR; OTCQX: EORIF) announces that its indirect wholly-owned subsidiary, Ridgeway Arizona Oil Corp. (collectively with EOR, the "Company"), has entered into a non-binding Letter of Intent with a non-affiliated third party, "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 is $10.0 million (U.S.), subject to certain post-closing adjustments and conditions. The sale is subject to completion of due diligence by the Purchaser, which is arm's length to the Company, negotiation and execution of a definitive sales agreement and regulatory approval. Riviera-Ensley Energy Advisors acted as the marketing agent and broker for the Company in connection with the transaction. Riviera-Ensley Energy Advisors is a full service acquisition and divestiture transaction advisor serving the energy sector for over 20 years. More than twenty entities reviewed the 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 $210,000 upon closing of the sale with the Purchaser for conducting the confidential marketing and solicitation of bids for the property interests.
Subject to completion of the Purchaser's due diligence and execution of a definitive sales agreement, the transaction is expected to close on or before September 15, 2014 with a post-closing settlement following receipt of all required state of New Mexico regulatory approvals. If the transaction is ultimately completed, 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 approval of the TSX Venture Exchange.
As previously reported, following a costly workover 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 and 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.
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 purchase and sale is expected to close on or before September 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 believes that the expectations reflected in such forward-looking statements are reasonable, Enhanced Oil Resources can give no assurance that such expectations will prove to be correct. Assumptions upon which such forward-looking statements are based include that that the purchaser will complete its due diligence, that a definitive sale/purchase agreement will be executed, that all regulatory approvals will be received, that the sale/purchase agreement will close on or before September 15, 2014, and that there will be sufficient proceeds from the disposition to pursue new opportunities that diversify the Company's asset base, pay accounts payable and for general corporate purposes. Factors could cause actual results to vary materially from results anticipated by such forward-looking statements, will be completed, or that additional opportunities will fail to be 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' 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 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.
ON BEHALF OF THE BOARD OF DIRECTORS
Barry D Lasker, CEO
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.
For further information:
visit our Website at www.enhancedoilres.com or please call Don Currie on 1-888-990-3551.