ROK Announces Two Asset Acquisitions & Farmin

Source: www.gulfoilandgas.com 3/17/2021, Location: North America

ROK Resources Inc. has entered into a Purchase and Sale Agreement, dated March 15, 2021 (the "Purchase Agreement") to acquire certain producing oil and gas assets (the "Assets") in Southeastern Saskatchewan. Closing of the acquisition is expected to occur on or about April 30, 2021 with an effective date of April 1, 2021, subject to the completion of a diligence review on the Assets, the completion of a financing transaction to provide funding to purchase the Assets, as well as the receipt of any necessary regulatory approvals, including, without limitation, any required approvals of the TSX Venture Exchange. In addition, ROK has completed an acquisition (the "Non-op Assets") for a non-operated working interest in producing and non-producing oil and gas assets, along with an interest in a multi-well facility in another area of Southeastern Saskatchewan. The acquisition properties include production, as well as liabilities pertaining to future abandonment and reclamation obligations. Total consideration for the two acquisitions is $2,500,000 in cash and 2,250,000 Class B Common Shares of ROK and an overriding royalty specific to the Non-op Assets.

The acquisition properties are located within the Company's core operating area in Southeast Saskatchewan, targeting the Midale and Frobisher formations. Current production is approximately 67 boe/d1 (90% oil and non-gas liquids). The acquired Assets also include two central oil batteries and ­­­­2,500 gross acres of prospective land in proximity to the Company's existing land base. The properties provide additional growth potential for the Company and complements an established operating area allowing for cost effective capital development.

Further, the Company has entered into a Farmout Agreement dated March 15, 2021 (the "Farmin") to acquire the rights to earn certain oil and gas assets (the "Undeveloped Assets") in Southeastern Saskatchewan. ROK will participate in the drilling, completion and equipping of two (2) earning wells, paying 70% of the costs to earn a 35% working interest in the earning wells, plus a 35% working interest in 2,900 gross acres of prospective land in the Undeveloped Assets. The first commitment well is expected to be spud on or before August 31, 2021. Prior to December 31, 2021, ROK has the option to purchase up to a 50% interest in the Undeveloped Assets, which includes two producing oil and gas wells. The Farmin is subject to financing and the receipt of any necessary regulatory approvals.

Commenting on the acquisitions and Farmin, Chairman and CEO Cam Taylor stated:
"The foundation has been established with the addition of a complementary set of acquisitions and a Farmin, providing ROK additional cashflow and a runway to grow reserves and future cashflow as oil prices continue to trend upwards. Ownership in two multi-well facilities underlines ROK's future cost-effective development, utilizing existing processing capacity, water disposal and pipeline infrastructure. ROK will continue to focus on strategic acquisitions, securing long-term financial partners, and continuing to create shareholder value."


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