HOUSTON,
Sept. 4, 2014 /CNW/ - Enhanced Oil
Resources Inc. (TSX-V: EOR; OTCQX: EORIF) announces that its
indirect wholly-owned subsidiary, Ridgeway Arizona Oil Corp.
(collectively with EOR, the "Company"), has entered into a
non-binding Letter of Intent with a non-affiliated third party,
"Purchaser", for the sale of all of the Company's rights, title and
interest in the Crossroads oilfield, located in Lea County, New Mexico. The purchase price is
$10.0 million (U.S.), subject to
certain post-closing adjustments and conditions. The sale is
subject to completion of due diligence by the Purchaser, which is
arm's length to the Company, negotiation and execution of a
definitive sales agreement and regulatory approval. Riviera-Ensley
Energy Advisors acted as the marketing agent and broker for the
Company in connection with the transaction. Riviera-Ensley Energy
Advisors is a full service acquisition and divestiture transaction
advisor serving the energy sector for over 20 years. More
than twenty entities reviewed the field's geological and operating
information, with the Company receiving four bids, including the
Purchaser's bid. The Company has agreed to pay Riviera a fee of $210,000 upon closing of the sale with the
Purchaser for conducting the confidential marketing and
solicitation of bids for the property interests.
Subject to completion of the Purchaser's due
diligence and execution of a definitive sales agreement, the
transaction is expected to close on or before September 15, 2014 with a post-closing settlement
following receipt of all required state of New Mexico regulatory approvals. If the
transaction is ultimately completed, the effective date for the
transaction will be September 1,
2014, the date upon which the Purchaser assumes financial
obligations and consequences arising from the operation of the
field. As the transaction constitutes a "Reviewable Disposition"
within the meaning of Policy 5.3 of the TSX Venture Exchange, the
transaction is subject to the approval of the TSX Venture
Exchange.
As previously reported, following a costly
workover in the Crossroads field in the first quarter of 2014, the
Company decided not to incur further development costs in the
Crossroads field associated with high risk wellbores and undertook
a number of initiatives to raise additional funds and has
restricted its operations to those matters necessary to sustain
production, reduced personnel and overhead and postponed certain
remedial operations.
The Company intends to use the proceeds from the
disposition of the Crossroads field to pursue new opportunities
that diversify the Company's asset base, pay accounts payable and
for general corporate purposes.
About Enhanced Oil Resources Inc.
Enhanced Oil Resources Inc. is an early-stage
company, with a principal goal of increasing crude oil and natural
gas production through enhanced oil recovery ("EOR") and infill
drilling projects it is initiating in the Permian Basin on oil
fields acquired by the Company in 2007 and 2008 for that
purpose.
Forward-Looking Statements
Certain statements contained herein are
"forward-looking statements" and "forward-looking information"
under applicable securities laws, including statements regarding
beliefs, plans, expectations or intentions regarding the future
relating to Enhanced Oil Resources Inc.'s operations, business
prospects, expansion plans and strategies. Such forward-looking
statements include, among others, that the purchase and sale is
expected to close on or before September 15,
2014, and that the Company intends to use the proceeds from
the disposition of the Crossroads field to pursue new opportunities
that diversify the Company's asset base, pay accounts payable and
for general corporate purposes.
Forward-looking information typically contains
statements with words such as "intends", "anticipate", "estimate",
"expect", "potential", "could", "plan" or similar words suggesting
future outcomes. Readers are cautioned not to place undue
reliance on forward-looking statements because it is possible that
expectations, predictions, forecasts, projections and other forms
of forward-looking information will not be achieved.
Forward-looking statements are based on the opinion and estimates
of management at the date the statements are made, and are based on
a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Although Enhanced Oil Resources
believes that the expectations reflected in such forward-looking
statements are reasonable, Enhanced Oil Resources can give no
assurance that such expectations will prove to be correct.
Assumptions upon which such forward-looking statements are based
include that that the purchaser will complete its due diligence,
that a definitive sale/purchase agreement will be executed, that
all regulatory approvals will be received, that the sale/purchase
agreement will close on or before September
15, 2014, and that there will be sufficient proceeds from
the disposition to pursue new opportunities that diversify the
Company's asset base, pay accounts payable and for general
corporate purposes. Factors could cause actual results to
vary materially from results anticipated by such forward-looking
statements, will be completed, or that additional opportunities
will fail to be successful. Readers should be aware that the list
of factors, risks and uncertainties set forth above are not
exhaustive. Readers should refer to Enhanced Oil Resources' current
filings, which are available at www.sedar.com, for a detailed
discussion of these factors, risks and uncertainties. The
forward-looking statements or information contained in this news
release are made as of the date hereof and Enhanced Oil Resources
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable laws or regulatory policies.
ON BEHALF OF THE BOARD OF DIRECTORS
(signed)
Barry D Lasker, CEO
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION
SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE
SOURCE Enhanced Oil Resources Inc.