Under the terms of the LOI, the company will purchase the interest in exchange for cash and 15 million shares of restricted stock of the company. According to the operator of the property, there are an additional six locations, with each location having a possible two horizontal legs per well.
The operator believes that there are approximately 200,000 barrels of oil and four billion cubic feet of gas that are recoverable from each horizontal leg in this prospect.
Bill Wiseman, CEO of Bonanza Oil & Gas, said: “This is an exciting time for our company. We expect this acquisition, upon an acceptable closing, to increase our cash flow from operations. Bonanza expects to continue its strategy to buy currently producing wells that have potential for future growth.”
Based in Houston, Texas, Bonanza Oil and Gas holds assets ranging from current producing properties, wholly owned prospects, to developing working interests in proven undeveloped properties.
