CALGARY, May 6 /CNW/ - Result Energy Inc. ("Result"; TSX-V: RTE) is pleased to announce it has accepted a cash offer from an arm's length, private oil and gas company to purchase certain of the Company's conventional oil and gas properties which are located in Alberta and Saskatchewan. The offer is subject to typical conditions, including satisfactory due diligence, purchaser financing and board approvals, the negotiation of a definitive purchase and sale agreement, and required regulatory approvals. The anticipated closing date is July 1, 2009.
The sale proceeds (approximately $11.8 million, subject to closing adjustments) will be used to extinguish the Company's bank debt and working capital deficiency and to provide funds for ongoing operations. This divestiture is part of Result's plan to increase its focus on the resource potential of the Horn River Basin shale gas play in northeastern British Columbia and the Bakken oil play in southeastern Saskatchewan.
Following completion of this asset sale, the Company will hold oil and gas properties with an estimated value of $17 million, $34 million in tax pools and $1.5 million in cash with no debt.
Result gained early entry into the Horn River Basin during 2007 and 2008, and has since amassed interest in 83 gross (44 net) sections. Result is partnered with a large energy trust in 43 gross (26 net) sections at Gunnell Creek, and with a private company in 25 gross (2.5 net) sections at Dilly Creek. The Company has a 100% working interest in an additional 10 sections at West Gunnell Creek and 5 sections at Moss Creek. Result's Horn River project areas are situated in close proximity to lands held by various major industry players. In conjunction with its energy trust partner, Result has recently joined the Horn River Producers Group, an industry cooperative involving the major operators in the Horn River play.
The Horn River is widely regarded as analogous to the Barnett shale gas play in Texas. However, the Horn River shales are generally thicker and exhibit greater gas maturities. Furthermore, the Government of British Columbia has established an attractive lease tenure system and proposes to implement a net profits royalty regime to encourage shale gas development.
In southeast Saskatchewan, Result has farmed-in to seven sections targeting the Bakken light oil play. The Company drilled one horizontal well (100% WI) in Q1, 2009 and completion operations are scheduled for summer 2009.
Investors are cautioned that this news release contains forward looking information. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements.
Result Energy Inc. is a publicly traded Canadian energy company involved in the exploration and development of oil and gas properties in western Canada. Result trades on the TSX Venture Exchange under the symbol "RTE".
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.