HOUSTON, Sept. 29, 2014 /CNW/ -- Enhanced Oil Resources
Inc. (TSX-V: EOR; OTCQX: EORIF) ("EOR") announces that its indirect
wholly-owned subsidiaries, Ridgeway Arizona Oil Corp. and EOR
Operating Company (collectively with EOR, the "Company"), have
executed a definitive sales and purchase agreement (the
"Agreement") with an unrelated third party group consisting of
Desert Production, Inc. of Midland,
Texas and Penroc Oil Corporation of Hobbs, New Mexico (together, the "Purchaser"),
for the sale of all of the Company's rights, title and interest in
the Crossroads oilfield, located in Lea
County, New Mexico. The purchase price, which is payable in
cash at closing, is US$10.0 million,
subject to certain post-closing adjustments and conditions.
Riviera-Ensley Energy Advisors ("Riviera"), a full service
acquisition and divestiture transaction advisor serving the energy
sector for over 20 years, acted as the marketing agent and broker
for the Company in connection with this arms-length transaction.
More than twenty entities reviewed the Crossroads field's
geological and operating information, with the Company receiving
four bids, including the Purchaser's bid. The Company has
agreed to pay Riviera a fee of
US$210,000 in cash upon closing of
the sale with the Purchaser for conducting the marketing and
solicitation of bids for the property interests. The
Agreement is subject to a number of closing conditions including
regulatory approval.
The transaction is expected to close on or before its currently
scheduled closing date of October 15, 2014, which may be
extended by mutual agreement, with a post-closing settlement
following receipt of all required state of New Mexico regulatory approvals. Upon the sale
closing, the effective date for the transaction will be
September 1, 2014, the date upon
which the Purchaser assumes financial obligations and consequences
arising from the operation of the field. As the transaction
constitutes a "Reviewable Disposition" within the meaning of Policy
5.3 of the TSX Venture Exchange, the transaction is subject to the
acceptance for filing by the TSX Venture Exchange.
As previously reported, following a costly work-over in the
Crossroads field in the first quarter of 2014, the Company decided
not to incur further development costs in the Crossroads field
associated with high risk wellbores, undertook a number of
initiatives to raise additional funds and has restricted its
operations to those matters necessary to sustain production,
reduced personnel and overhead and postponed certain remedial
operations.
The Company intends to use the proceeds from the disposition of
the Crossroads field to pursue new opportunities that diversify the
Company's asset base, pay accounts payable and for general
corporate purposes.
About Enhanced Oil Resources Inc.
Enhanced Oil Resources Inc. is an early-stage company, with a
principal goal of increasing crude oil and natural gas production
through enhanced oil recovery ("EOR") and infill drilling projects
it is initiating in the Permian Basin on oil fields acquired by the
Company in 2007 and 2008 for that purpose.
ON BEHALF OF THE BOARD OF DIRECTORS
"Signed"
Barry D Lasker, CEO
Forward-Looking Statements
Certain statements contained herein are "forward-looking
statements" and "forward-looking information" under applicable
securities laws, including statements regarding beliefs, plans,
expectations or intentions regarding the future relating to
Enhanced Oil Resources Inc.'s operations, business prospects,
expansion plans and strategies. Such forward-looking statements
include, among others, that the transaction is expected to close on
or before its currently scheduled closing date of October 15, 2014, and that the Company intends to
use the proceeds from the disposition of the Crossroads field to
pursue new opportunities that diversify the Company's asset base,
pay accounts payable and for general corporate
purposes.
Forward-looking information typically contains statements with
words such as "intends", "anticipate", "estimate", "expect",
"potential", "could", "plan" or similar words suggesting future
outcomes. Readers are cautioned not to place undue reliance
on forward-looking statements because it is possible that
expectations, predictions, forecasts, projections and other forms
of forward-looking information will not be achieved.
Forward-looking statements are based on the opinion and estimates
of management at the date the statements are made, and are based on
a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Although Enhanced Oil Resources
Inc. believes that the expectations reflected in such
forward-looking statements are reasonable, Enhanced Oil Resources
Inc. can give no assurance that such expectations will prove to be
correct. Assumptions upon which such forward-looking
statements are based include that all regulatory approvals will be
received, that the transaction will close on or before its
currently scheduled closing date of October
15, 2014 or such extended closing date as may be mutually
agreed to and that there will be sufficient proceeds from the
disposition of the Crossroads field to pursue new opportunities
that diversify the Company's asset base, pay accounts payable and
for general corporate purposes. Risks and factors that could
cause actual results to vary materially from results anticipated by
such forward-looking statements include that all regulatory
approvals are not received, that the transaction does not close on
or before its currently scheduled closing date of October 15, 2014 or any mutually agreed to
extended closing date or at all or that, if applicable, an extended
closing date is not mutually agreed to, that the proceeds of
disposition are not sufficient to pursue new opportunities that
diversify the Company's asset base, pay accounts payable and for
general corporate purposes, and that no new opportunities that
diversify the Company's asset base are pursued or that any such
opportunities that are pursued are not successful. Readers should
be aware that the list of factors, risks and uncertainties set
forth above are not exhaustive. Readers should refer to Enhanced
Oil Resources Inc.'s current filings, which are available at
www.sedar.com, for a detailed discussion of these factors, risks
and uncertainties. The forward-looking statements or
information contained in this news release are made as of the date
hereof and Enhanced Oil Resources Inc. undertakes no obligation to
update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable laws or regulatory
policies.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE
SOURCE Enhanced Oil Resources Inc.