Armada Oil, Inc., an oil and gas exploration and production company, is pleased to announce that it has entered into an agreement with Gulfstar Resources, LLC (“Gulfstar”), a private energy investment group, for a third tranche of capital associated with its recent asset reallocation transaction.
The total committed net funding for this tranche is approximately $2,040,000 and, upon full funding (scheduled to close on or before June 15, 2014), Gulfstar will have acquired an additional 12.6% of TNR Holdings, LLC (“TNRH”). At that point, the Company’s ownership interest in TNRH will be approximately 27% and the Company will have accomplished its stated goal of the reallocation of the bulk of its assets to the mid-continent region while maintaining significant net production in south Louisiana.
This tranche will provide capital availability for the drilling of the Bear Creek #1, the initial test well on the Company’s Anadarko farmout acreage in Carbon County, Wyoming. The Anadarko agreement covers approximately 9,800 net mineral acres in Carbon County, Wyoming. The Company has well logs from nearby wells showing the presence of all three Niobrara “benches” as well as extensive 3-D data confirming the Niobrara as well as the deeper conventional zones. The drilling of the Bear Creek #1 will not only test deep conventional zones with significant potential, but will also provide valuable data on the quality and potential of the Niobrara Shale on the project acreage. Potential reserves per well from the Niobrara Shale could be upwards of 300,000 to 500,000 barrels with liquids ratios of 60% to 80%.
“We are pleased to have put in place an agreement for the third tranche of funding from Gulfstar. The combination of this funding and operational cash flow will allow us to drill the initial test well on our Anardarko farmout acreage in Wyoming as well as to drill an initial round of wells and accomplish additional field enhancements and improvements on our new leases in Kansas. We look forward to an exciting second half of 2014,” said Randy M. Griffin, CEO of Armada Oil, Inc.
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