Dejour Enterprises Ltd. of Vancouver, BC, signed a letter of intent to purchase certain proven producing and undeveloped reserves, approximately 2,100 acres of associated land, data and wells in Liberty County, TX, effective Aug. 1, 2007 for US$3.5 million cash with minor gas balancing adjustments, the company said Friday.
The purchase includes four wells; two wells currently producing gas with associated condensate in excess of 12 MMcf of natural gas combined, one new well currently being placed on line with similar pressures and one standing cased well; all drilled to approximately 12,000 feet.
Working interests range from 11.38% to 15.9%. LaRoche Consultants of Dallas, on behalf of Dejour Energy USA Inc., a wholly owned subsidiary of Dejour, is providing independent engineering reports assigning NI 51-101 compliant gross proven reserves associated with this purchase of 9.3 Bcf and 130,000 bbl of condensate based on the New York Mercantile Exchange strip case. Production from this field is expected to be enhanced when the new well is placed on stream. Dejour anticipates additional wells to be drilled in the future.
“This asset purchase has many advantages, not the least of which includes a proven production base that we estimate should provide an accelerated payback of invested capital between 12 and 18 months and upside development potential in a stalwart high-pressure reservoir,” said Dejour Enterprises CEO Robert Hodgkinson. “The net revenue stream from this purchase is expected to exceed all company noncapex overhead expenditures for the foreseeable future. Additionally, these reserves, combined with existing reserves, oil and gas assets, working capital and balance sheet strength should provide the basis to make a successful submission to upgrade the listing of company shares from the TSX Venture Exchange to the TSX [Toronto Stock Exchange].”
Dejour said it expects to close the transaction on or before Sept. 14, assuming no due diligence issues. The purchase will be funded from cash on hand.
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