CUT BANK, MT, May 30, 2012 /CNW/ - Mountainview Energy Ltd. (TSXV: MVW) ("Mountainview" or the "Company") is pleased to announce that further to its news release of April 30, 2012 it has closed the acquisition of 10,222 net acres of oil and gas leaseholds in Divide County, North Dakota from a private oil and gas company for $10 million (the "Transaction"). Mountainview expects to acquire the remaining 2,556 net acres of this asset package on June 30, 2012 for cash consideration of USD$2,678,000 subject to satisfactory completion of the Company's title due diligence.
Mountainview Energy Ltd. has identified twenty initial drilling locations on this project targeting the Three Forks Formation. The first two locations that Mountainview plans to drill are offsetting two producing wells in the Three Forks. The first Mountainview location is an offset south of a producing well which is the SM Energy Company's Wolter 1-28H, located in Sec. 28, T163-R100W. The Wolter 1-28H had an Initial Produciton Rate of approximately 550 bopd, 367 MCF/d, and 447 bwpd. The Wolter 1-28H has produced 133,560 barrels of oil equivalent in approximately 11 months of production. The second Mountainview location is an offset Southwest of a producing well which is the SM Energy Company's Legaard 4-25H, located in Sec. 25 , T163N-R101W. The Legaard 4-25H had an Initial Production Rate of approximately 543 bopd, 350 MCF/d, and 771 bwpd. The Legaard 4-25H has produced 78,210 barrels of oil equivalent in approximately 5 months of production. Once this transaction is fully closed it will bring the Company's current acreage position in the Williston Basin to approximately 36,000 net acres.
Mountainview is also pleased to announce that it has entered into two separate unsecured loan arrangements with two separate affiliates of insiders of the Company (the "Lenders"), pursuant to which Mountainview has borrowed an aggregate of USD $8 million from the Lenders for a term of 2 years at an annual interest rate of 9.0% (the "Loans"). Mountainview used the proceeds from the Loans to partially fund the Transaction. Pursuant to the Loans, Mountainview is not required to repay any portion of the principal amount or any interest thereon prior to maturity, but may, at its option, repay any or all principal and interest amounts owing under the Loans at any time prior to maturity. The Loans are subject to all applicable regulatory and exchange approvals. The Transaction will be funded from Company's working capital and credit line as well as the USD $8 million borrowed from Lenders.
The Loans are "related party transactions" pursuant to Multilateral Instrument 61-101- Protection of Minority Security Holders in Special Transactions ("MI 61-101") by virtue of the insiders' relationships with the Company and the Lenders. Pursuant to MI 61-101, absent an available exemption, the Company would be required to obtain minority approval and a formal valuation for the Loan. Such an exemption is available for the Loans pursuant to Sections 5.5(a) and 5.7(a) of MI 61-101, respectively, because at the time the transaction was agreed to, neither the fair market value of the subject matter of, nor the fair market value consideration for the transaction, exceeds 25% of the Company's market capitalization.
Patrick Montalban, Mountainview Energy's Chaiman and Chief Executive Officer, commented, "We are pleased to announce Mountainview's recent acquisition of the 12 Gage Prospect in Divide County, North Dakota. The Company has reached a strategic goal of acquiring over 30,000 net acres in the Williston Basin."
Mountainview Energy Ltd. is a public oil and gas company listed on the TSX Venture Exchange, with a primary focus on the exploration, production and development of the Bakken and Three Forks Shale in the Williston Basin and the South Alberta Bakken
Certain information contained in this press release constitutes forward-looking statements, including, without limitation, information related to the Transaction, the operational plans on certain assets acquired by Mountainview and the expected closing date of a certain acquisition. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources, inability to meet or continue to meet listing requirements, the inability to obtain required consents, permits or approvals and the risk that actual results will vary from the results forecasted and such variations may be material. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom.
The forward-looking statements contained in this press release are made as of the date of this press release. Mountainview disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Additionally, Mountainview undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.
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.
For further information:
Patrick M. Montalban
President & Chief Executive Officer