CUT BANK, MT,
May 30, 2012 /PRNewswire/ -
Mountainview Energy Ltd. (TSXV: MVW) ("Mountainview" or the
"Company") is pleased to announce that further to its news
release of April 30, 2012 it has
closed the acquisition of 10,222 net acres of oil and gas
leaseholds in Divide County, North
Dakota from a private oil and gas company for $10 million (the "Transaction").
Mountainview expects to acquire the remaining 2,556 net acres of
this asset package on June 30, 2012
for cash consideration of USD$2,678,000 subject to satisfactory completion
of the Company's title due diligence.
Mountainview Energy Ltd. has identified twenty
initial drilling locations on this project targeting the Three
Forks Formation. The first two locations that Mountainview
plans to drill are offsetting two producing wells in the
Three Forks. The first
Mountainview location is an offset south of a producing well which
is the SM Energy Company's Wolter 1-28H, located in Sec. 28,
T163-R100W. The Wolter 1-28H had an Initial Produciton Rate
of approximately 550 bopd, 367 MCF/d, and 447 bwpd. The
Wolter 1-28H has produced 133,560 barrels of oil equivalent in
approximately 11 months of production. The second
Mountainview location is an offset Southwest of a producing well
which is the SM Energy Company's Legaard 4-25H, located in Sec. 25
, T163N-R101W. The Legaard 4-25H had an Initial Production
Rate of approximately 543 bopd, 350 MCF/d, and 771 bwpd. The
Legaard 4-25H has produced 78,210 barrels of oil equivalent in
approximately 5 months of production. Once this transaction
is fully closed it will bring the Company's current acreage
position in the Williston Basin to
approximately 36,000 net acres.
Mountainview is also pleased to announce that it
has entered into two separate unsecured loan arrangements with two
separate affiliates of insiders of the Company (the
"Lenders"), pursuant to which Mountainview has borrowed an
aggregate of USD $8 million from the
Lenders for a term of 2 years at an annual interest rate of 9.0%
(the "Loans"). Mountainview used the proceeds from the
Loans to partially fund the Transaction. Pursuant to the Loans,
Mountainview is not required to repay any portion of the principal
amount or any interest thereon prior to maturity, but may, at its
option, repay any or all principal and interest amounts owing under
the Loans at any time prior to maturity. The Loans are
subject to all applicable regulatory and exchange approvals.
The Transaction will be funded from Company's working capital and
credit line as well as the USD $8
million borrowed from Lenders.
The Loans are "related party transactions"
pursuant to Multilateral Instrument 61-101- Protection of
Minority Security Holders in Special Transactions ("MI
61-101") by virtue of the insiders' relationships with the
Company and the Lenders. Pursuant to MI 61-101, absent an
available exemption, the Company would be required to obtain
minority approval and a formal valuation for the Loan. Such
an exemption is available for the Loans pursuant to Sections 5.5(a)
and 5.7(a) of MI 61-101, respectively, because at the time the
transaction was agreed to, neither the fair market value of the
subject matter of, nor the fair market value consideration for the
transaction, exceeds 25% of the Company's market
capitalization.
Management Comments
Patrick
Montalban, Mountainview Energy's Chaiman and Chief Executive
Officer, commented, "We are pleased to announce Mountainview's
recent acquisition of the 12 Gage Prospect in Divide County, North Dakota. The Company
has reached a strategic goal of acquiring over 30,000 net acres in
the Williston Basin."
Mountainview Energy Ltd. is a public oil and gas
company listed on the TSX Venture Exchange, with a primary focus on
the exploration, production and development of the Bakken and Three
Forks Shale in the Williston Basin
and the South Alberta Bakken
Forward-Looking Statements
Certain information contained in this press
release constitutes forward-looking statements, including, without
limitation, information related to the Transaction, the operational
plans on certain assets acquired by Mountainview and the expected
closing date of a certain acquisition. By their nature,
forward-looking statements are subject to numerous risks and
uncertainties, some of which are beyond the Company's control
including the impact of general economic conditions, industry
conditions, volatility of commodity prices, currency fluctuations,
environmental risks, competition from other industry participants,
the lack of availability of qualified personnel or management,
stock market volatility and ability to access sufficient capital
from internal and external sources, inability to meet or continue
to meet listing requirements, the inability to obtain required
consents, permits or approvals and the risk that actual results
will vary from the results forecasted and such variations may be
material. Readers are cautioned that the assumptions used in
the preparation of such information, although considered reasonable
at the time of preparation may prove to be imprecise and, as such,
undue reliance should not be placed on forward-looking statements.
The Company's actual results, performance or achievement could
differ materially from those expressed in or implied by, these
forward-looking statements and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits the Company will derive therefrom.
The forward-looking statements contained in
this press release are made as of the date of this press
release. Mountainview disclaims any intention and assumes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws. Additionally,
Mountainview undertakes no obligation to comment on the
expectations of, or statements made by, third parties in respect of
the matters discussed above.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE Mountainview Energy Ltd.