PROPERTY ACQUISITION / Royal Standard to Acquire Oil and Gas
Assets in the United States
ME SYMBOL: RSM
MARCH 19, 1998
HOUSTON, TEXAS--ROYAL STANDARD MINERALS INC., is pleased to
announce that it has completed an agreement to acquire certain oil
and gas assets from Sharpe Energy Company for cash and stock. The
properties consist of producing and non-producing oil and gas
properties in Texas, Oklahoma, New Mexico and Wyoming. The
present value discounted 10 percent is approximately $3.2 million
based upon year end 1997 pricing for oil and gas. The final sales
price will be based upon independent engineering evaluations of
the assets, which will be sold via standard industry practices for
fair market pricing.
The assets have been evaluated effective January 1, 1998 by an
independent petroleum engineering firm Hainey & Hainey of Houston,
Texas. The terms of the transaction will be cash and common stock
in RSM which is subject to regulatory approval and RSM shareholder
approval (exclusive of Sharpe).
The purpose of the sale of the assets by Sharpe is to focus its
efforts on the Texas Gulf Coast region. The majority of the
assets that are slated to be sold are considered to be non-core
properties. The sale of these assets are part of a divestiture
program began in 1996 when most of the Rocky Mountains production
properties were sold.
RSM will gain a set of properties that will contribute cash flow
to the corporation for the next several years. These properties
will represent an initial effort for the company to establish a
presence in the oil and gas business. The objective will be to
acquire further interests in areas where the company is currently
active and to expand upon opportunities in the Gulf Coast region
of Texas and Louisiana.
Concurrent with the closing of the acquisition, RSM is expected to
complete an agreement to obtain a US $5,000,000 credit facility
with a Houston based bank in April, 1998. Additionally, the
company has completed its form 20F with the US Securities and
Exchange Commission, and is reporting under US rules applicable to
foreign issuers. At this point, the company can be listed,
subject to listing requirements, on a US exchange.
Royal Standard Minerals cautions that the statements made in this
press release and other forward looking statements made on behalf
of the Company may be affected by such other factors including,
but not limited to, volatility of mineral prices, product demand,
market competition, imprecision of mineral estimates, and other
risks detailed herein and from time to time in the Securities and
Exchange Commission filings of the Company. |
