Fremont signs LoI to Acquire Producing Leases in the Illinois Basin
Fremont Petroleum Corporation Ltd. has signed a non-binding Letter of Intent (LoI) with Trey Exploration Inc. to acquire a portfolio of producing oil and gas leases in the Illinois basin.
Under the terms of the LoI, Fremont will pay a cash consideration of US$1.0 million to Trey by August 31st, with additional payments of US$0.5 million by January 1st, 2021 and US$0.4 million by April 1st, 2021.
Trey currently operates leases in the Illinois basin across Indiana, Kentucky, and Illinois. The company’s wells currently produce approximately 71 barrels of oil per day (b/d).
Fremont, headquartered in Florence, Colorado, currently owns interests in oil & gas properties in Colorado and Kentucky, and is listed on the Australian Securities Exchange (ASX). The company stated that it is looking at increasing production capacity aggressively in the U.S. by acquiring onshore producing assets whose production can be increased with low-cost field operations and workers.
“Trey represents the first of these opportunities and a pipeline of similar assets that have same production and enhancement characteristics, and are currently being reviewed,” Fremont stated in its filing with the ASX.
The completion of the deal is subject to due diligence, receipt of regulatory and shareholder approvals, and the signing of a definitive agreement between the parties.