Desert Mountain Energy Closes Acquisition of Kight Gilcrease Sand Unit Oil & Gas Project in Oklahoma
MOUNTAIN ENERGY CORP. (the "Company") (TSX.V: DME) is pleased to announce the acquisition of the Kight Gilcrease Sant Unit oil and gas project in Seminole County, OK (the "KGSU") has closed. Under the terms of the definitive Purchase Agreement dated February 13, 2018, as amended on November 5, 2018, between the Company, Seminole Productions, LLC, an Oklahoma private company ("Seminole"), and Desert Energy Corp., the Company's U.S. subsidiary ("Desert Energy"), the Company has acquired certain oil and gas interests comprising the Kight Gilcrease Sand Unit.
In consideration of the oil and gas interests acquired, the Company is paying (i) cash consideration of US$180,000 of which US$90,000 is payable on closing and US$90,000 is payable within one year thereafter, and (ii) 1,440,000 Units at a deemed price of CAD $0.20 per Unit, where each Unit is comprised of one share of Common Stock of the Company ("Share") and one Share Purchase Warrant ("Warrant"). Each Warrant permits the holder to purchase one Share for a period of 3 years from the date of issuance at a price of CAD $0.30 per Share. This represents a deemed value for the Units of U.S. $220,000 at applicable exchange rates.
By way of background, the KGSU was permitted and approved by OCC by Order #375263 dated July 19, 1993, as an enhanced recovery project primarily utilizing water-flood secondary recovery operations, in an administrative proceeding which consolidated and unitized all working and royalty interests in the project. It was subsequently acquired by its present owner/operator Seminole in 2003. The KGSU has had historic production estimated at 1,690,240 BO by the OCC and presently has 7 wells on site, one of which is operational. The oil produced is a light sweet crude that varies from 34 API to 43 API gravity.
The KGSU comprises an area of approximately 883.7 acres, which is substantially underlain by the Gilcrease Sandstone common source of oil supply. The KGSU leases are located 8 miles S of Wewoka directly astride State Highway 56, in a portion of the S/2 of Section 6, all of Section 7 and the NW/4 of Section 18, T6N R8E Seminole County, Oklahoma. It is not located within an environmentally sensitive area or on a known Native American reservation. The oil-bearing pay zone was estimated by the OCC to be from 10 ft to 40 ft in width and to occur at a subsurface depth of approximately 2726 ft to 2810 ft, as reflected in geophysical logs from the Adams #1 Maverick Well drilled in the SW/4 SE/4 SW/4 of Section 7-6N-8E, Seminole County. Further information on the KGSU is contained in our Press Release dated November 22, 2018.
According to Irwin Olian, CEO of the Company, "We are extremely pleased to have closed our acquisition of the Kight Gilcrease Sand Unit in Seminole County, Oklahoma. It represents a strong opportunity to develop significant cash flow for the Company and at the same time it gives us a base of operations in Oklahoma. Oklahoma has been one of the leading producers of Helium among states in the U.S. and this will provide us with access to potential helium opportunities in the region as an adjunct to our flagship Heliopolis helium project in Arizona.
Immediate plans for the KGSU contemplate reworking of existing wells in the field."
About Desert Mountain Energy
The Company is an exploratory resource company engaged in exploration and development of helium, oil & gas and mineral properties in the Southwestern United States. Until September 5, 2018, the Company also owned the Yellowjacket Gold Project in Atlin, British Columbia, which it had been developing. The Company has its executive offices in Vancouver, Canada. The Company was incorporated under the laws of the Province of British Columbia, on April 30, 2008, and was formerly named African Queen Mines Ltd. It initially received certain southern African assets in a spin off transaction related to the acquisition of Pan African Mining Corp. by Asia Thai Mining Co., Ltd.
ON BEHALF OF THE BOARD OF DIRECTORS OF
Desert Mountain Energy Corp.
Chairman & CEO
For more information, contact:
Irwin Olian, President and CEOE-mail: email@example.com
Phone: (604) 788-0300
Carrie Howes, Corporate Communications
U.K. - +44 (0) 870 490 5443
Canada - +1 416 900 3634
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of the information contained herein. The statements made in this press release may contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from the Company's expectations.
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