A very significant NEWS RELEASE!!
STANFOFD ENERGY CORP ("STB-V;SNFGF-L")
- Agrees to Purchase Slate of Producing Oil and Gas Properties
Donald W. Busby, Director of Stanford Energy Corp. announces that the Company has agreed to purchase a slate of producing oil and gas properties. The total purchase price for the properties is approximately CDN $27 million. The properties are located in Texas, Oklahoma, Louisiana and New Mexico, and representations made by the vendor are that the properties are generating an annual cash flow of
about CDN $8 million from operated producing, non-operated producing and royalty interests. The vendor is a substantial, arms length United States based, oil and gas company. The vendor is divesting itself of certain non-core assets. Closing is scheduled for on or about November 14, 1997.
An Initial non-refundable payment of US $500,000 must be made to secure the Company's purchase. Further payments of US $500,000 are due October 1, 1997 and October 17, 1997. The Company will, between now and October 1, 1997, complete due diligence to confirm representations of the vendor as to operations from the subject properties. In order to finance the acquisition of these properties the Company will secure debt financing and bring in industry partners. Given the current operating status of these properties the Company anticipates no significant difficulties in arranging bank production financing for a portion of the purchase price. The Company has initiated negotiations with a United States banK to obtain bank financing of between CDN $16 and $18 million. The Company anticipates having at least one partner to participate in the acquisition.
In determining the purchase price for the properties, the Company is only paying for proved producing reserves. In July, 1997, when the Company disposed of its Wildhay producing assets, management's objective was to replace the production sold through exploration and through acquisition. This acquisition is seen as a key step in replacing the production sold. The acquisition is subject to completion of a formal purchase agreement, the Company's confirmation of representations of the vendor, and receipt of all required regulatory approvals.
TEL: (604) 685-9316 Donald W. Busby, Director FAX: (604) 683-1585 |
