Wedgemount Resources Signs Definitive Agreement to Acquire Oil and Gas Assets
December 19, 2022 (Source) – Wedgemount Resources Corp. (CSE: WDGY) (OTCQB: WDGRF) (“Wedgemount” or the “Company“), is pleased to announce the signing of a Definitive Agreement (the “Agreement“), replacing the non-binding letter of intent announced October 27, 2022 for the acquisition of oil and gas assets (the “Assets“) located in the prolific Permian Basin of West-Central Texas.
Highlights of the Assets:
- Premier location in the Permian Basin of West-Central Texas – North America’s #1 oil producing region
- Partnered with San Antonio based turn-key oil field services operator with 20+ years track record in central Texas
- High netback 42 API light oil with associated natural gas
- Opportunity for low-cost optimization of producing and shut-in wells for significant organic production growth
- Low decline production base with favourable operating costs
- Multiple additional stacked shallow targets identified in unexploited oil-bearing formations accessible through conventional drilling
Wedgemount will acquire a 100% working interest in 640 acres including five leases, eleven producing wells and all surface facilities. Current production from the eleven wells is approximately 25 barrels of oil per day of high quality, low-decline, operated production. The area’s geology consists of numerous hydrocarbon producing formations which will also be targeted by the Company. The acquisition exhibits the flexibility in Wedgemount’s business strategy to target high quality assets in safe jurisdictions within the natural resources sector.
“Wedgemount is delighted to secure a highly scalable and profitable light oil asset in North America’s most prolific producing hydrocarbon basin”, remarked Wedgemount CEO, Mark Vanry. “The asset has tremendous production upside potential including low-cost optimization of existing wells, new vertical and horizontal wells, targeting of underdeveloped zones and the implementation of secondary recovery through water-flood. We’re optimistic that together our local partner, we’ll be able to add additional highly prospective targets in the immediate area during calendar 2023.”
Terms of the Purchase
The vendor, Willowbend Investments Inc., is an arm’s length Texas company (the “Vendor“). Pursuant to the Agreement, Wedgemount will pay the Vendor aggregate cash consideration of US$1,500,000 in three installments: US$250,000 on or before December 31, 2022; US$500,000 on or before February 28, 2023; and US$750,000 on or before March 31, 2023.
The Company also announces that it has arranged a non-brokered private placement (the “Offering“) of up to 2,500,000 units (each a “Unit“) at CAD$0.20 per Unit for gross proceeds of up to $500,000.
Each Unit will entitle the holder to receive one (1) common share in the capital of the Company (each a “Common Share“) and one (1) transferable Common Share purchase warrant (each a “Warrant“). Each Warrant entitles the holder to acquire one (1) Common Share at CAD$0.30 per Common Share for a period of twenty four (24) months from the date of issuance, subject to an accelerated expiry provision, whereby in the event the closing price of the Company’s Common Shares on the Canadian Securities Exchange (the “Exchange“) exceeds CAD$0.60 for a period of 20 consecutive trading days, at the Company’s election, the 24 month period within which the Warrants are exercisable, will be reduced and the holders of the Warrants will be entitled to exercise their Warrants for a period of 30 days commencing on the day the Company provides notice, any outstanding Warrants not exercised during the 30 day period will expire.
In connection with the Offering, the Company may pay finder’s fees to qualified non-related parties, in accordance with the policies of the Exchange, being 7% cash commission on total proceeds raised by the finder and 7% in Warrants on total Units sold by the finder.
The Company intends to use the net proceeds from the Offering for general working capital purposes and for cash consideration due in connection with the Agreement.
All securities issued under the Offering, including securities issuable on exercise thereof, will be subject to a hold period expiring 4 months and 1 day after issuance, in accordance with the rules and policies of the Exchange and applicable Canadian securities laws.
About Wedgemount Resources Corp.
Wedgemount Resources is a junior natural resources company focused on maximizing shareholder value through the acquisition, discovery and advancement of natural resource projects in North America.
On behalf of the Board of Directors,
WEDGEMOUNT RESOURCES CORP.
Mark Vanry, President and CEO
For more information, please contact the Company at:
Telephone: (604) 343-4743
This news release may contain statements which constitute “forward-looking information”, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers with respect to the future business activities of the Company. The words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Forward looking statements made in this news release include the anticipated completion of the acquisition and the proposed timing thereof, the anticipated benefits of the acquisition, the potential for gas production and production from additional zones on the Assets, potential additional acquisition opportunities in the area of the Assets and the proposed use of the proceeds of the Offering. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities and involve risks and uncertainties, and that the Company’s future business activities may differ materially from those in the forward-looking statements as a result of various factors, including, but not limited to, availability of funds, personnel and other resources necessary to conduct exploration or development programs, successes of the Company’s exploration efforts, availability of capital and financing and general economic, market or business conditions. There can be no assurances that such information will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. The Company does not assume any obligation to update any forward-looking information except as required under the applicable securities laws.
Neither the Canadian Securities Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
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