International Western Petroleum Buys up Texas Gulf Coast Assets
to Accelerate M&A Growth
IRVING, TX-(Marketwired - Jul 14, 2016) - International Western
Petroleum, Inc. (OTCQB: INWP) announced today that it has executed
a definitive Purchase and Sale Agreement (the "Agreement") to
purchase all assets of a privately held Houston-based E&P
company in the Texas Gulf Coast region (the "Seller").
The acquisition, which consists of three phases, includes
current producing assets of the Seller and acquisition targets of
the Seller, which taken together, constitutes current production of
approximately $2.0 million per month EBITDA (based on June
production and pricing) and over $1 billion of 3-P (Proven,
Probable and Potential) Reserves as opined by DeGolyer and
McNaughton and Ralph E Davis and Associates.
The Agreement provides for a total purchase price of $2.0
million to be paid by August 30, 2016, the scheduled date of
closing. Operations to increase cash flow will be undertaken upon
closing. The Agreement also provides for INWP to issue five million
shares of common stock and one million warrants to the Seller.
The first phase of the acquisition assumes the current
production of the Seller, which is 5,000 mcfpd and 42 bopd with net
income of approximately $300,000 per month based on June production
and pricing.
Out of the $2.0 million cash payment from INWP at closing, $1.5
million will be used in the next 30 days for a development program
designed to raise the Seller's current production by an additional
2,000 mcfpd and 80 bopd, for a total net income projected at
$535,000 per month as cash flow into INWP.
It is noted that the Seller owns 18,100 acres of oil and gas
leases with 36 active wells and proven and probable reserves of
approximately $137 million undiscounted and $76 million PV10% at
current pricing.
INWP will also assume the Seller's position in its acquisition
targets of some 55,000 acres and 258 wells (59 active) with current
production of 400 bopd and 8700 mcfpd gas. The second phase of
acquisitions, which is scheduled for September 30, 2016, will
provide a total of $17.2 million of which $8.5 million will be
spent in acquisition cost and $8.7 million will be spent in
development cost. The last phase of acquisitions, which is
scheduled for November 30, 2016, will provide a total $26 million
of which $20 million will be spent in acquisition cost and $6
million will be spent in development cost.
All leases are along the Texas Gulf Coast and are conventional
asset plays.
Combined assets, after the all-phase acquisition from the
Seller, including its acquisition targets, will be 73,100 acres
with daily production of 15,700 mcfpd and 122 bopd current
production, or $2.0 million EBITDA per month at current
production.
Proven reserves of the combined entity upon acquisition is
estimated by reputable third party engineering firms DeGolyer
McNaughton, Ralph E Davis & Associates, American Energy
Advisors and Netherland Sewell & Associates at 5.615 million bo
proved and 111.8 BCF gas or $129 million PV10% and $201 million
undiscounted. Total 3-P Reserves per the same recognized third
party experts is estimated at just over $1 billion at current
prices.
INWP's development programs seek to raise the current income to
$5 million per month net income based on proved, probable and
possible reserve operations. Upon the closing of the transaction on
the first phase of the acquisition with the $2.0 million capital
injection, INWP shall assume the Houston-based office and a
selected staff from the Seller to continue operations on the
acquired assets and production income.
Dr. Benjamin Tran, Chairman of International Western Petroleum
stated, "Based upon our due diligence reviews of the transaction to
date, we believe that this opportunity is highly attractive and we
are keen to work with our large network of private investors and
family offices to conclude the transaction in a timely manner while
preparing to use all commercially reasonable efforts to work
closely with our advisors and consultants to complete the
transaction."
Ross Ramsey, CEO of International Western Petroleum said, "This
transaction is expected to bring significant revenues and assets to
INWP, making it a serious oil and gas player along the Texas Gulf
Coast. INWP hopes to establish its presence in the region,
continuing to utilize a dynamic workforce from a very talented
executive team in Houston to build INWP into a world class company
via M&A growth. Our development plan is to accelerate
production during this time of development costs by focusing our
concentration on the viability of proved reserves categories."
About International Western Petroleum, Inc.:International
Western Petroleum is a Texas-based E&P company that focuses on
the acquisition, development, and exploration of crude oil and
natural gas properties in Texas. The company is actively looking to
acquire oil and gas properties and apply the latest technologies
and production know-how to increase acreage, productions and
reserves with a focus in the Central West Texas region. For more
information, please visit its corporate website:
www.iwpetroleum.com
FORWARD-LOOKING STATEMENTSThis press release contains
forward-looking statements as defined within Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
relate to future events, including our ability to raise capital, or
to our future financial performance, and involve known and unknown
risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance, or achievements to be
materially different from any future results, levels of activity,
performance or achievements expressed or implied by these
forward-looking statements. You should not place undue reliance on
forward-looking statements since they involve known and unknown
risks, uncertainties and other factors which are, in some cases,
beyond our control and which could, and likely will, materially
affect actual results, levels of activity, performance or
achievements. Any forward-looking statement reflects our current
views with respect to future events and is subject to these and
other risks, uncertainties and assumptions relating to our
operations, results of operations, growth strategy and liquidity.
We assume no obligation to publicly update or revise these
forward-looking statements for any reason, or to update the reasons
actual results could differ materially from those anticipated in
these forward-looking statements, even if new information becomes
available in the future.
For a discussion of these risks and uncertainties, please see
our filings with the Securities and Exchange Commission. Our public
filings with the SEC are available from commercial document
retrieval services and at the website maintained by the SEC at
http://www.sec.gov.
Contact Information
Contact:Investor Relations DepartmentInternational Western
Petroleum, Inc.5525 N. MacArthur Blvd, Suite 280Irving, TX
75038(855) 809-6900ir@iwpetroleum.com
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