Business
Guardian Announces Letter Of Intent for sale of K2 America
(via Thenewswire.ca) Calgary, Alberta (June 24, 2013): Guardian Exploration ( " Corporat...
About this update from Guardian Exploration Inc.
[{"type":"text","content":"Guardian Announces Letter Of Intent for sale of K2 America(via Thenewswire.ca)\n \n \nCalgary, Alberta (June 24, 2013): Guardian Exploration (\"Corporation\") (TSXV: GX) wishes to announce the signing of a binding letter of intent for the sale of all the issued and outstanding shares of K2 America Corp., the Corporation's US subsidiary, to Graydon Kowal, President and CEO of the Corporation. The transaction is subject to shareholder and regulatory approval. The Corporation will ask shareholders to vote in favour of the transaction at the Annual and Special Shareholder Meeting to be held on July 16, 2013.\n\n \n \nK2 America Corp. (\"K2 America\") is a wholly owned US subsidiary of the Corporation that was acquired through the 2006 amalgamation with Resilient Resources Ltd. K2 America's producing oil wells are all located on the Blackfeet Tribe Reservation near the town of Cut Bank, MT. The average daily production in 2012 for K2 America was 31 barrels of oil. As part of this transaction, the Corporation retained the services of a third party reserve engineering firm located in Billings, MT to conduct a reserve evaluation of K2 America's properties. The report concluded the 15% discounted Net Present Value of K2 America's proved developed producing wells is $1,281,113, before any liabilities of K2 America are taken into consideration.\n\n \n \nIn March 2012, K2 America entered into a settlement agreement with the Office of Natural Resource Revenue (\"ONRR\") and the Blackfeet Tribe, whereby it committed itself to drilling one well on a Blackfeet Tribe lease 180 days upon receiving an approved drill permit, which has been determined to be July 10, 2013. Failure to drill the well by the aforementioned date will result in paying a penalty amount of $371,931 and surrendering all of its Blackfeet Tribe leases. Neither the Corporation nor K2 America have the required funds to fulfill this obligation and have not found sufficient interest from the industry to secure a partner. \n\n \n \nGiven this current difficult position, the board of directors believes it is in the best interest of the Corporation to sell K2 America to Mr. Kowal. Along with the foregoing liability, the sale will transfer a $1,000,000 liability associated with an expired farm in agreement to the purchaser, as the agreement was in K2 America's name. In assessing the t...