SANTA BARBARA, CA,
Nov. 23, 2011 /PRNewswire/ -
Underground Energy Corp. ("Underground", "UGE" or the "Company")
(TSX VENTURE: UGE) announced today that it has closed the
transaction originally announced on November
1, 2011, to acquire, through its wholly-owned subsidiary,
Underground Energy, Inc., oil and gas leases in California for total consideration of
US$5.5 million comprising
$4.6 million in cash and $0.9 million in assumed liabilities. The
final acreage acquired comprises 39,778 gross acres (29,854 net)
and includes three producing wells (two oil wells and one gas well,
with total production of approximately 60 boepd), a number of drill
ready locations and multiple exploitation and exploration prospects
in two trends in the Santa Maria
Basin and four trends in the San
Joaquin Basin. The acreage acquired was revised downward
slightly from the amount previously announced due to lease
expirations on non-core acreage. The expired leases are
largely in the non-core Challenger AMI. In line with the Company's
aggregation strategy, the acquired lands are primarily prospective
for Monterey and other analogous
oil-prone shale plays. Underground is the operator at each of the
acquired properties. UGE intends to begin acquisition of
seismic data on one of its newly acquired properties on
Monday November 28th.
"Successfully concluding this transaction
results in a five-fold increase in our land position in
California and expands our
presence in the historically productive Santa Maria and San Joaquin Basins while
retaining our focus on the Monterey and other oil-prone shales in
California," said Michael Kobler, President and CEO of
Underground. "Accessing and closing this opportunity was a direct
result of the knowledge and relationships of our California based team as well as a number of
other parties associated with the Company. I would like to thank
them and all involved on both sides of this transaction for their
hard work in bringing the deal to fruition. Our focus now shifts to
developing those prospects where we believe we can create
significant, near-term value for the Company."
About Underground Energy Corporation
Underground is focused on identifying, acquiring
rights to, exploring for, developing and producing oil from shale
formations in North America using
the latest exploration and recovery techniques and technologies.
Underground focuses on identifying and acquiring sizable land
positions and prospects in historically prolific but under-explored
shale formations as well as in emerging shale plays that, in both
instances, hold large volumes of prospective resources. Underground
currently holds mineral rights on approximately 80,273 net acres of
prospective lands in California
and Nevada with an initial focus
on the Monterey shale in
California. Underground is listed
on the TSX Venture Exchange under the ticker symbol "UGE". For more
information on Underground, including a copy of the Company's
latest corporate presentation, please visit www.ugenergy.com.
Underground's regulatory filings are available under the Company's
profile at www.sedar.com.
Cautionary Statements
Statements in this press release contain
forward-looking information and forward-looking statements within
the meaning of applicable securities laws (collectively,
"forward-looking information"). Forward-looking information
is frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. In particular, forward-looking
information in this press release includes, without limitation,
statements with respect to: (i) the Company's planned seismic
operations to be conducted on such oil and gas leases; and (ii) the
prospectivity of such oil and gas leases for oil and gas and the
anticipated drilling, completion and production results
therefrom. Readers are cautioned that assumptions used in the
preparation of forward-looking information may prove to be
incorrect.
Although we believe that the expectations
and assumptions reflected in the forward-looking information are
reasonable, there can be no assurance that such expectations or
assumptions will prove to be correct. In particular, assumptions
have been made that: (i) Underground will be able to obtain
equipment and regulatory approvals in a timely manner to carry out
exploration and development activities; (ii) Underground will have
sufficient financial resources with which to conduct its planned
capital expenditures; and (iii) the current tax and regulatory
regime will remain substantially unchanged. Certain or all of the
forgoing assumptions may prove to be untrue.
Forward-looking information is based on
the opinions and estimates of management at the date the statements
are made, and is subject to a variety of risks and uncertainties
and other factors (many of which are beyond the control of
Underground) that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information. Some of the risks and other factors could cause
results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
operational risks in exploration, development and production;
delays or changes in plans; competition for and/or inability to
retain drilling rigs and other services; competition for, among
other things, capital, acquisitions of reserves, undeveloped lands,
skilled personnel and supplies; risks associated to the uncertainty
of reserve and resource estimates; governmental regulation of the
oil and gas industry, including environmental regulation;
geological, technical, drilling and processing problems and
other difficulties in producing reserves; the uncertainty of
estimates and projections of production, costs and expenses;
unanticipated operating events or performance which can reduce
production or cause production to be shut in or delayed; incorrect
assessments of the value of acquisitions; the need to obtain
required approvals from regulatory authorities; stock market
volatility; volatility in market prices for oil and natural
gas; liabilities inherent in oil and natural gas operations; access
to capital; and other factors. Readers are cautioned that
this list of risk factors should not be construed as
exhaustive.
The forward-looking information contained
in this news release is expressly qualified by this cautionary
statement. Underground does not undertake any obligation to
update or revise any forward-looking statements to conform such
information to actual results or to changes in our expectations
except as otherwise required by applicable securities
legislation. Readers are cautioned not to place undue
reliance on forward-looking information.
BOEs may be misleading, particularly if
used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl has been
used and is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead.
Neither the 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.
SOURCE Underground Energy Corporation