U.S. Energy Acquires FieldPoint's Assets in New Mexico and Wyoming
NASDAQ-listed U.S. Energy Corp. has entered into an Asset Purchase Agreement (APA) with FieldPoint Petroleum Corp. to acquire all of its rights, as well as operated and non-operated interests in properties located in New Mexico and Wyoming, for a total consideration of US$500,000.
In June 2020, FieldPoint had filed a voluntary petition for relief under Chapter 7 of the bankruptcy code in the U.S. Bankruptcy Court for the Western District of Texas.
Under the terms of the APA, the total consideration of US$500,000 comprises an initial cash deposit of US$25,000 and an additional consideration of US$475,000 payable at the time of closing. The APA may be terminated in the event that the closing fails to occur by October 1st, 2020.
The assets acquired include approximately 500 net acres located in Lea County in New Mexico and Converse County in Wyoming. The acreage contains 21 wells, of which 14 are currently producing. The assets are estimated to contain proved reserves (1P reserves) of approximately 237.3 thousand barrels of oil equivalent (Mboe) as of August 1st, 2020, of which approximately 63% is oil.
“We are pleased to announce this acquisition, which represents U.S. Energy’s second acquisition of 2020 and follows our previously stated strategy of seeking to acquire assets that represent mature, PDP heavy properties which we believe have significant upside potential from existing operations. The properties, acquired at an approximate 80% discount to their current PDP PV-10 reserve value, add reserves and immediate free cash flow, with operated acreage positions that are held by production to provide optionality for future opportunities,” said Ryan Smith, U.S. Energy’s CEO.
Denver-based U.S. Energy is focused on lease acquisition and the development of oil- and natural gas-producing properties in the United States. The company currently holds interests in various projects in the Williston basin of North Dakota, Zavala and Dimmit Counties of Texas, and Coastal Louisiana.
OTCMKTS-listed FieldPoint Petroleum is engaged in the acquisition, operation and development of oil and natural gas properties across Texas, Oklahoma, Wyoming, New Mexico, and Louisiana.