Jericho Oil Corporation (TSX VENTURE: JCO) (OTC PINK: JROOF) announces its affiliate Eagle Road Oil, LLC (a JV with its private family partner, owned 50% by Jericho) has signed a definitive agreement with an affiliate of Enervest Ltd., to acquire operated and non-operated producing wells and drillable leaseholds in Central Oklahoma for a cash consideration of USD$3.951 million ($1.975 million net to Jericho), subject to customary post-closing adjustments. The asset package is in an area complementary to Jericho Oil’s existing operations in Oklahoma and represents the Company’s fifth acquisition within Central and Northeast Oklahoma since January 2015.
The acquisition is located in Noble, Pawnee, Payne and Garfield County across two contiguous land packages. All of the acquired production is located in the Noble, Pawnee, Payne tri-county region producing primarily out of the Woodford and Mississippi Lime formations. In addition to the 21 operated producing wells, there are 41 shut-in wells which Jericho will look to target through workovers, cleanouts and re-fracs as well as approximately 20 identified HZ in-fill drilling locations. The asset comes with significant in-place infrastructure ready-made for a future re-work and drilling program as commodity prices recover.
The acquisition will be funded through its newly established Senior Secured Revolving Credit Facility with East West Bank. Pro-forma for the transaction, Jericho’s Facility has an undrawn amount under the initial borrowing base of $4.63mm.
The acquisition is subject to customary post-closing adjustments and has an effective date of July 1, 2016.
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