Equus Buys Oil & Gas Assets for $6.6 Million
January 07 2013 - 8:30AM
Marketwired
Equus Total Return, Inc. (NYSE: EQS) ("Equus" or the "Fund")
announced that it has invested $6.6 million to purchase the working
interests in 150 producing and non-producing oil and gas wells,
including associated development rights of approximately 23,000
acres situated on 15 separate properties in Texas and Oklahoma. The
working interests range from a de minimus amount to 50% of the
leasehold production of these wells. The wells are operated by a
number of experienced operators, including a major multi-national
oil and gas conglomerate which has operating responsibility for
approximately half of the producing well interests. The assets were
purchased from Warren American Oil Company, LLC, a Tulsa-based oil
& gas firm. The investment was made through Equus Energy, LLC
("Equus Energy") a wholly-owned subsidiary of the Fund. Equus
Energy is intended to be used as a platform for additional
energy-related investments, with particular emphasis on oil and gas
properties.
A report concerning estimated reserves and future net revenue
with respect to the transaction was developed for the Fund by Lee
Keeling & Associates, Inc., a Tulsa-based oil & gas
engineering firm. An opinion regarding the reasonability of the
methodologies employed by Keeling in its report was prepared by
Ryder Scott Company, a Houston-based oil & gas engineering
firm. Based upon the Keeling Report and the Fund's own due
diligence, the Fund estimates that the acquired working interests
in producing wells represent approximately 500,000 barrels of oil
equivalents, and that an additional 400,000 barrels of oil
equivalents may be obtained from these interests through additional
drilling and development. A substantial component of the assets
includes working interests in 40 producing wells, as well as
certain development rights, in the Conger Field, a promising and
well-known producing field in the Permian Basin in West Texas. Also
included in the purchased assets and total acreage described above
are working interests of 2.5% and 7.5% in the Burnell and North
Pettus Units, respectively, which collectively comprise
approximately 13,000 acres in the area known as the "Eagleford
Play."
The working interests acquired are presently producing positive
net cash flow and, for this reason, Equus Energy may seek a
leveraged refinancing of the assets with a commercial lender. The
Fund may also decide to allocate additional capital investment in
respect of new drilling opportunities in proven fields and areas
such as Conger and Eagleford, as well as exploration and
development activities in these locations.
Equus Energy has engaged Jack H. Edwards and H.W. Hankinson,
both longtime energy industry executives, to assist in evaluating
and sourcing potential energy-related investments such as the
acquisition announced today. Mr. Edwards, on an ongoing basis, will
provide the technical expertise necessary to manage the new
holdings recently acquired. A summary of Messrs. Edwards' and
Hankinson's background and experience is as follows:
Mr. Edwards has worked as an oil and gas industry executive and
advisor for the past 50 years, including holding senior positions
at Humble Oil, Barrick Petroleum, and a variety of other small and
mid-sized public and private companies in this sector. He also
served as Vice President, Chief Engineer, and Division General
Manager for the International and Frontier Division of Tenneco Oil.
Based in Houston, Mr. Edwards has also been a longtime investor in,
and operator of, oil and gas projects throughout the United States,
as well as internationally.
Mr. Hankinson, who also serves as a director of the Fund, brings
many years of oil and gas experience to Equus Energy. He is
currently Managing Partner and co-founder of Global Business
Associates, LLC, a boutique M&A consulting firm in Atlanta, GA.
Mr. Hankinson is a former military officer with engineering and MBA
degrees. He has held domestic and international senior executive
management positions for over 30 years. In 1993 he moved to Moscow
as the senior regional executive for Halliburton / Brown & Root
("HBR") to establish the oil & gas construction market in the
Former Soviet Union. In 1997 he moved to Riyadh, as the senior HBR
regional Managing Director of Saudi Arabia. In 1999 he was
recruited to become the COO and senior American for a large
multi-national conglomerate for the Saudi Royal Family. Based in
Riyadh, he was responsible for investment acquisitions and
portfolio management. During his career, Mr. Hankinson has served
as Chairman, CEO, COO, and Director for both small and
multi-national private and public companies.
About Equus The Fund is a business
development company that trades as a closed-end fund on the New
York Stock Exchange, under the symbol "EQS." Additional information
on the Fund may be obtained from the Fund's website at
www.equuscap.com.
This press release may contain certain forward-looking
statements regarding future circumstances. These forward-looking
statements are based upon the Fund's current expectations and
assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in
particular, the risks and uncertainties described in the Fund's
filings with the SEC. Actual results, events, and performance may
differ. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as to the date hereof.
Except as required by law, the Fund undertakes no obligation to
release publicly any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. The
inclusion of any statement in this release does not constitute an
admission by the Fund or any other person that the events or
circumstances described in such statements are material.
Contact: Patricia Baronowski Pristine Advisers, LLC (631)
756-2486
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