Petrichor Enters Into Amended Participation Agreement for 50% Working Interest in Marble Falls Property, Texas
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 24, 2012) - Petrichor Energy Inc. (TSX VENTURE:PTP)(FRANKFURT:YQN) (Petrichor or the Company) announces further to its News Releases dated July 30, and August 31, 2012, that it has entered into an amended and restated Participation Agreement dated October 12, 2012, subject to receipt of regulatory approval, with BlakEnergy, Ltd., a private Texas corporation, to acquire a 50% working interest in certain acreage (covering 11,895.65 acres to date) located in Young County and Jack County, Texas, known as the Marble Falls Prospect, together with such additional acreage as may be acquired by BlakEnergy and agreed to by Petrichor.
As disclosed in prior News Releases, Petrichor's participation in the Prospect will be a 50% cost-bearing working interest through the first 10 wells, delivering the Company a net revenue interest of approximately 37.5%. The Company's working interest shall be burdened by a 5% carried working interest through the tanks in favour of the vendor and/or its assigns on the first 10 wells drilled in the Prospect. Beginning with the 11th well, the carried working interest will convert to a cost-bearing 5% working interest, and all working interest owners will then participate on a full cost basis. As clarification, Petrichor's interest beginning with the 11th well will be a 45% working interest and a 33.75% net revenue interest.
In consideration for its 50% interest, Petrichor must pay 50% of the purchase price of US$650 - US $750 per acre for all acreage located within the Prospect. The variation in purchase price is based on the amount per acre (including land and brokerage fees, among other charges) paid by BlakEnergy for the acreage.
The aggregate payment required by the Company for 11,895.65 acres acquired to date is US$4,202,380 (the "Purchase Price"). The Company has negotiated a Promissory Note with BlakEnergy (the "Note") in the principal amount of $4,002,330, with 12% interest payable annually. Interest on the Note shall be paid on a monthly basis, beginning on November 15, 2012, and thereafter on the 15th day of each month thereafter. The principal amount due under the Note, together with any accrued and unpaid interest, shall be due and payable as to $1,334,126.67 on or before January 15, 2013, $1,334,126.67 on or before May 15, 2013, and $1,334.126.66 on or before September 15, 2013.
The Company anticipates making the payments required under the Note by arranging equity and longer term debt financings in accordance with the policies of the TSX Venture Exchange, which will be negotiated upon receipt of conditional approval from the TSX-V to this property transaction.
As set out in prior News Releases, the Prospect formations targeted are in the Mississippi Lime & Marble Falls formations located in North Central Texas. The Mississippi Lime is a Mississippian age porous limestone formation that is deposited beneath the Barnett Shale, which is analogous to the Mississippi Lime play in Kansas and Oklahoma. The Marble Falls formation is a Pennsylvanian age limestone; analogous to the Strawn Lime play in West Texas. To date, independent operators have drilled over 50 vertical and horizontal multi-stage frac'd wells in the Marble Falls and Mississippi limestone with positive results.
ON BEHALF OF THE BOARD
Joe DeVries, Chief Executive Officer
This note contains forward-looking statements regarding future events and Petrichor's future results. These statements are based on current expectations, estimates, forecasts, and projections about the industry in which Petrichor operates and the beliefs and assumptions of Petrichor's management. Words such as "expects", "anticipates", "targets", "goals", "projects", "intends", "plans", "believes", "seeks", "estimates", "continues", "may", variations of such words, and similar expressions, are intended to identify such forward-looking statements. In addition, any statements that refer to projections of Petrichor's future financial performance, Petrichor's anticipated growth and potentials in its business and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified elsewhere herein and Petrichor's filings on www.sedar.com. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Petrichor undertakes no obligation to revise or update any forward-looking statements for any reason.
FOR FURTHER INFORMATION PLEASE CONTACT:
Petrichor Energy Inc.
Chief Executive Officer