1.01. Entry into a Material Definitive Agreement
May 23, 2019, Foothills Exploration, Inc., through its indirect wholly owned subsidiary, Foothills Exploration, LLC (the “Company”),
entered into a letter agreement for the purchase and sale of oil and gas assets (the “Agreement”) with an unrelated
third party (the “Seller”), concerning the acquisition of a total of 87 wells and associated acreage located in Montana
Assets consist of 29 natural gas wells, 10 producing and 19 shut-in, plus associated acreage, additional miscellaneous leases,
associated pipelines, gathering systems, compression and processing facilities, and related yards and equipment, located in Sweet
Grass and Stillwater counties, Montana – comprising of the Rapelje, Lake Basin and Six Shooter Fields. The Assets also include
oil properties consisting of 58 oil and injection wells with associated acreage located in Musselshell and Rosebud Counties, Montana
– 12 proved developed producing wells, 25 proved developed non-producing wells, and 21 injection wells – comprising
of the Sumatra and Big Wall / Little Wall fields. The oil properties currently generate approximately $1.1 million in annual gross
of the purchase and sale of the Assets is scheduled to occur on or before sixty (60) days following the full execution of the
Agreement (“Closing”). At Closing, (i) the Seller and the Company will execute an assignment and bill of sale, (ii)
the Company will pay the balance of the purchase price to the Seller, and (c) the parties will execute such other documents as
may be reasonably requested.
of this transaction is subject to the approval of transfer from the Montana Board of Oil and Gas Conservation. Furthermore, no
assurances can be made that the Closing will occur based on financing and other market conditions.