SAN ANTONIO, Dec. 19, 2011 /PRNewswire/ -- EnerJex
Resources, Inc. (OTCMarkets: ENRJ) ("EnerJex" or the "Company"), a
domestic onshore oil company, announced today that it has formed a
general partnership named "Rantoul Partners" in order to develop
the Company's Rantoul Project assets located in Eastern Kansas.
EnerJex contributed its existing Rantoul Project assets to the
partnership at an agreed upon value of $15
million, and two investors are scheduled to contribute a
total of $5 million, which would
enable the partnership to drill approximately 150 new wells.
Management expects the additional wells funded by this transaction
to more than double production from the Rantoul Project to in
excess of 200 barrels of oil per day.
Upon closing of this transaction, the investors immediately
funded $2.35 million in return for an
11.75% ownership interest in the partnership, and they are
scheduled to fund an additional $2.65
million in multiple tranches over the next 14 months.
EnerJex currently owns 88.25% of the partnership and will own 75%
if the full $5 million is funded as
scheduled.
Rantoul Partners was structured in a manner which is expected to
provide the investors with certain tax benefits as well as the
opportunity to participate in the future cash flow of the
partnership's assets. At the end of 2010, EnerJex had a net
operating loss carry forward of approximately $10 million, which has increased significantly
during 2011 as a result of the Company's aggressive capital
expenditures program. Therefore, EnerJex does not expect to pay
income taxes in the foreseeable future. As a result, EnerJex is in
a position to make special tax allocations to investors under the
general partnership structure, which meaningfully enhances the
potential return from their investment. The Company is considering
the formation of additional general partnerships to further the
development of its assets in an accretive manner for
shareholders.
Management Comments
EnerJex's CEO, Robert Watson,
Jr., commented, "I would like to thank Texas Capital Bank
and the investors for working with the Company to complete this
transaction, which is expected to result in significantly higher
net production, cash flow, and proved reserve value for EnerJex
with no dilution to shareholders. The formation of Rantoul Partners
is a creative solution that I truly believe is a win-win for both
the Company and the partnership's investors."
About EnerJex Resources, Inc.
EnerJex is a domestic onshore oil company with assets located in
Eastern Kansas and South Texas. The Company's primary business is
to acquire, develop, explore and produce oil properties onshore in
the United States. Additional
information is available on the Company's web site at
www.enerjexresources.com.
Forward-Looking Statements
This press release and the materials referenced herein
include "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements give EnerJex's
current expectations or forecasts of future events. The statements
in this press release regarding the acquisition of operating assets
and related agreements; any implied or perceived benefits from any
current or future transaction, and any other effects resulting from
any of the above, are forward-looking statements. Such statements
involve risks and uncertainties, including but not limited to:
whether acquired properties will produce at levels consistent with
that of other nearby properties and with management's expectations;
market conditions; the ability of EnerJex to obtain financing for
continued drilling; the costs of operations; delays, and any other
difficulties related to producing oil; the ability of EnerJex to
integrate the newly purchased assets and any newly acquired
employees; the price of oil; EnerJex's ability to market and sell
produced minerals; the risks and effects of legal and
administrative proceedings and governmental regulation; the
application of complex tax rules to partnership allocation
provisions; future financial and operational results; competition;
general economic conditions; and the ability to manage and continue
growth. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated. Important
factors that could cause actual results to differ materially from
the forward-looking statements are set forth in our Form 10-K filed
with the United States Securities and Exchange Commission and our
Form 10-Q. EnerJex undertakes no obligation to revise or update
such statements to reflect current events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events. EnerJex's production forecasts are dependent upon many
assumptions, including estimates of production decline rates from
existing wells and the outcome of future drilling activity.
Although EnerJex believes the expectations and forecasts reflected
in these and other forward-looking statements are reasonable, it
can give no assurance they will prove to have been correct. They
can be affected by inaccurate assumptions or by known or unknown
risks and uncertainties.
Contact
|
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Brad
Holmes, Investor Relations
|
Robert
Watson, Jr. CEO
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(713)
654-4009
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(210)
451-5545
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B_Holmes@att.net
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SOURCE EnerJex Resources, Inc.