Royale Energy said that it has entered into a Letter of Intent with an undisclosed company to acquire it’s non-operated interests in Permian Basin and California oil fields.
The acquisition will add approximately 190 barrels of oil per day (BOED) net for an acquisition price of $12 million dollars, subject to customary due diligence.
The reserves are oil weighted at 91 percent and include the Jameson North field in Texas where 3D seismic has identified proved but undeveloped locations (PUDs) that can be drilled.
The California field is situated near the Sansinena oil field where Royale has a joint venture with RMX Resources.
Royale is pleased to announce this key execution of its growth plans. These assets combined with the successful funding of the new joint venture development company, RMX Resources, will continue to propel Royale growth.
Royale CEO Rod Eson said: “I’m excited about Royale’s combined inventory of assets, acquisition targets and strategic relationships. This current acquisition will boost Royale into an improved company financial condition and is a perfect recipe for further success.”
The acquisition effort is being led by Johnny Jordan, President and COO of Royale, who is continuing to focus on acquiring, developing and executing on the company’s exploration and production activities. A key element to this acquisition is managements familiarity within these properties.
Royale chief financial officer Stephen Hosmer said: “As we work to complete this acquisition, hopefully to close in the third quarter of this year, we will succeed in another important step towards positioning the company for a return to a robust financial position.”
Royale is in discussion on key documents and pending the successful closing of the transaction, will announce additional details on the location of the assets and plans for development.
Source: Company Press Release