Property acquisition (8034L)
05 Août 2011 - 8:01AM
UK Regulatory
TIDMRSOX
RNS Number : 8034L
Resaca Exploitation Inc
05 August 2011
5 AUGUST 2011
Resaca Exploitation, Inc.
("Resaca" or "the Company")
Property acquisition
Resaca (AIM: RSOX), the oil and natural gas production,
exploitation, and development company focused on the Permian Basin
in the USA, is pleased to announce that it has entered into an
agreement to purchase Permian Basin oil and gas properties for $4.4
million in cash and 841,308 shares of newly issued Resaca common
shares ("Consideration Shares") for total consideration of
approximately $5.7 million based on the closing price of the
Company's shares on 4 August 2011. The properties comprise the
Langlie Jal Unit ("LJU") in Lea County, New Mexico, near city of
Jal and the Company's largest property - the Cooper Jal Unit. The
properties included in this acquisition cover 3,748 gross acres and
contain 112 wells (34 producing wells, 45 water injection wells and
33 inactive wells), all of which will be operated by Resaca. Resaca
will acquire a 73 percent working interest and a 57 percent net
revenue interest in the LJU. The properties are being acquired from
Wind River Petroleum, LP, a private company owned by Richard
Counts.
Resaca estimates net daily production from LJU of 51 barrels of
oil and 42 Mcf of natural gas (58 barrel of oil equivalents or
"boe"), as well as proved reserves of approximately 1.3 MMboe. The
purchase price equates to $4.31 per boe of estimated proved
reserves. Approximately 30 percent of the evaluated reserves from
this pending acquisition are considered proved developed and 91
percent of the proved reserves are oil. The closing of this
acquisition is expected to occur on 5 August 2011.
Application will be made for the admission of the Consideration
Shares to be admitted to trading on AIM ("Admission"). It is
expected that trading in the Consideration Shares will commence on
11 August 2011.
Subsequent to the issue of the Consideration Shares, the Company
announces that the total number of common shares of $0.01 each of
the Company in issue is 20,747,410 with each share carrying the
right to one vote. There are no shares held in treasury. The total
number of voting rights in the Company is therefore 20,747,410.
The above figure may be used by shareholders as the denominator
for the calculations by which they determine if they are required
to notify their interest in, or a change to their interest in, the
Company under the Disclosure and Transparency Rules.
Commenting on the acquisition, J.P. Bryan, Chairman and CEO of
Resaca, said:
"We are excited to add this quality oil asset to our property
portfolio at a favorable price. This asset is an ideal complement
to our nearby Cooper Jal Unit, which generates over 50 percent of
our current production and contains over 70 percent of our proved
reserves. The Langlie Jal Unit has all the characteristics we look
for in an acquisition - current production with a very low decline
rate and significant exploitation potential through the
implementation of proven engineering techniques. In addition to
opportunities to immediately increase production by returning
certain inactive wells to production, we believe this asset has
significant production potential from many of the same
opportunities we have identified at Copper Jal, including uphole
recompletions, refracs of currently producing zones, waterflood
enhancement and optimization, infill drilling and potential CO(2)
flooding. The acquisition of this property will enable us to
leverage what we have learned at Cooper Jal and gain economies of
scale by utilizing our personnel and service providers who are
already working in the immediate area on our properties. We believe
this acquisition is a very important step for Resaca to maximize
shareholder value."
For further information please contact:
Resaca Exploitation, Inc.
J.P. Bryan, Chairman and Chief Executive
Officer +1 713-753-1300
John J. ("Jay") Lendrum, III, Vice Chairman +1 713-753-1400
Dennis Hammond, President and Chief
Operating Officer +1 713-753-1281
Chris Work, Chief Financial Officer +1 713-753-1406
Buchanan Communications (Investor Relations) +44 (0) 20 7466 5000
Tim Thompson
Helen Chan
Ben Romney
finnCap Limited (Nomad and Broker) + 44 (0) 20 7600 1658
Sarah Wharry, Corporate Finance
Stephen Norcross, Corporate Broking
About Resaca
Resaca is an independent oil and gas development and production
company based in Houston, Texas. Resaca is focused on the
acquisition and exploitation of long-life oil and gas properties,
utilizing a variety of primary, secondary and tertiary recovery
techniques. Resaca's current properties are located in the Permian
Basin of West Texas and Southeast New Mexico. Additional
information is available at www.resacaexploitation.com.
In accordance with the AIM Rules, the information in this
announcement has been reviewed and approved by Dennis Hammond,
President and Chief Operating Officer of Resaca. Mr. Hammond earned
a Bachelor of Science degree in Petroleum Engineering, is a
registered professional engineer in the State of Texas and has over
30 years relevant experience within the oil and gas sector.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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