You are here: Agreements > Letter of Intent > Victory Energy Signs Letter of Intent to Acquire Proved Producing Reserves

Try our advanced search >>
CLAUSES Search Contract Clauses >>
Browse Contract Clause Library>>

Victory Energy Signs Letter Of Intent To Acquire Proved Producing Reserves

Letter of Intent

Legal Documents
You are currently viewing:

 This Letter of Intent involves

VICTORY ENERGY CORP | AUSTIN, TX--(November 11, 2015) -Victory Energy Corporation

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: Victory Energy Signs Letter of Intent to Acquire Proved Producing Reserves
Date: 11/12/2015
Industry: Oil and Gas Operations     Sector: Energy

join now
50 of the Top 250 law firms use our Products every day


Victory Energy Signs Letter of Intent
to Acquire Proved Producing Reserves


Successful Acquisition Increases Total PV-10 to over $10 Million  


AUSTIN, TX --(November 11, 2015) - Victory Energy Corporation , ( VYEY ) ("Victory" or "the Company") a growth stage exploration and production company, today announced it has entered into a letter of intent to acquire 181 net barrels of oil equivalent per day (“BOEPD”). The company expects the acquisition to result in ~77.1% - 88.6% working interest in three producing wells and ~38.6% - 44.3% working interest in 1,370 net acres that are currently held by production. Upon closing, this acquisition is expected to increase total PV-10 proved producing reserves for Victory to more than $10 million.

Transaction Highlights include:

PV-10 increase of $8.6 million (based on Q3 2015 Macquarie Tristone Energy Lender Price Survey for WTI oil and Henry Hub gas; a supporting third party report has been initiated)


Production of 181 BOEPD from 3 existing wellbores


1,370 net acres currently held by production containing 4 additional proved undeveloped locations


Production from the Woodbine formation with future development opportunities in the Lower Eaglebine, Georgetown, Edwards and Glen Rose (Buda-Rose) formations.


Both vertical and horizontal drilling opportunities exist


Drilling and development of the first PUD locations are anticipated to begin late 2016


LOI includes an option for the company to acquire up to a 50% proportionally reduced working interest in acreage acquisitions within a defined AMI.


The company will maintain exclusivity with the seller through the term of the LOI

“With a successful completion of this transaction, Victory would grow daily consolidated production from 50 to ~230 BOEPD, a substantial growth which we feel comes at a very favorable value,” stated Kenny Hill, Victory’s CEO. “Additionally, we expect that our PV-10 reserves value would increase to over $10 million based upon today’s prices and provide a significant increase to cash flow, supporting our continued pursuit of accretive acquisitions made available by the current commodity price environment. This transaction marks the first of several opportunities that we expect to pursue in the coming year. We look forward to continuing to leverage this generational pricing opportunity into growth pull forward and increased scale.”

The purchase price for the acquired interest is expected to be ~$7.8 million, of which ~$6.9 million is to be paid in cash, subject to customary adjustments. The remaining ~$900,000 of the purchase price is to be paid in shares of Victory common stock. For additional details about this transaction please refer to Victory’s current report on a Form 8-K.

The consummation of the acquisition is subject to the completion of a due diligence review of the properties, including a review of record title, and the negotiation and entry into definiti

continue to document