Acquisition / Lexxor Energy
Lexxor Energy Inc. Closes $2.70 Million Purchase Of Processing Assets
Calgary, Alberta - Thursday, April 4, 2002, 6:47 PM EST
Lexxor Energy Inc. ("Lexxor") announces that, effective March 31, 2002 it closed the purchase of various interests in oil gathering and processing facilities (the "Facilities") located at Redvers, Edenvale and Antler in southeast Saskatchewan and at Neutral Hills, Alberta for consideration of $2,700,000. The Facilities were purchased from the Lexxor Equipment Financing Limited Partnership (the "Partnership"). The purchase price was determined by Lexxor and the Partnership after taking into account oil that had been processed at the Facilities between December 14, 2001 and March 31, 2002 and incremental reserves discovered during that period that would be processed at the Facilities.
The Partnership had previously acquired the Facilities for $2,750,000 pursuant to a purchase and sale agreement that was effective as of December 14, 2001. The General Partner of the Partnership was not able to obtain satisfactory debt financing for the Partnership with the result that Lexxor and the Partnership agreed that Lexxor would acquire the Facilities. The General Partner of the Partnership is controlled by an outside director of Lexxor. Three outside directors of Lexxor subscribed for 36.6% of the units in the Partnership. Senior management of Lexxor did not subscribe for any units in the Partnership.
For the period December 14, 2001 to March 31, 2002, pursuant to a Processing Agreement (the "Processing Agreement") Lexxor paid the Partnership $243,266 to process oil produced from lands adjacent to the Facilities at the Facilities. The Partnership has paid Lexxor a total of $100,387 that is composed of interest of $40,387, legal cost of $10,000 and $50,000 representing the difference between the December 14, 2001 and March 31, 2002 purchase price. As a result of the foregoing payments, a promissory note given by the Partnership to Lexxor in the principal amount of $2,756,404 in respect of the earlier sale has been discharged. The General Partner estimates that it has or will incur $85,000 in respect of the creation and sale of Partnership equity, third party accounting and legal costs, and a return to the limited partners, with the result that it will receive an approximate net amount of $60,000.
Lexxor Energy Inc. is a Calgary-based oil and gas exploration company which currently trades on The Canadian Venture Exchange under the symbol LXX. |
