Mountainview Energy Ltd announces initial closing on acquisition of 12,778 net acres in the Bakken and Three Forks play in the
May 28 2012 - 9:46AM
PR Newswire (Canada)
CUT BANK, MT, May 30, 2012 /CNW/ - Mountainview Energy Ltd.
("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.
Mountainview Energy Ltd. CONTACT: Patrick M. MontalbanPresident
& Chief Executive OfficerE-Mail: mvw@bresnan.netWeb Site:
www.mountainviewenergy.comPhone: (406) 873-2235 Fax: (406) 873-2835
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