Blugrass Energy, Inc. reported that the company has signed multiple letters of intent to purchase oil and gas properties in the Mid Continent area of the United States. These properties contain producing wells as well as undeveloped acreage suitable for exploration and development.
Blugrass Energy said that the properties to be acquired are all located in Oklahoma and are prospective for various Mississippian age formations.
Blugrass Energy will acquire a 90% working interest in nine producing wells located on a 1,680 acre leasehold in Osage County. The wells had average gross daily production of approximately 53 barrels of oil and 549,000 cubic feet of natural gas in the three month period ending 10/31/2011. The company is also acquiring a minority working interest in an oil well producing from the Layton formation, along with 640 acres of undeveloped leasehold and infrastructure supporting these wells.
In Woods County, Blugrass Energy is purchasing a 19.5% working interest in 4,000 gross undeveloped acres along with a minority working interest in two wells that are waiting to be completed. The company estimates that the undeveloped acreage has twenty five potential drilling locations.
Blugrass Energy has agreed to pay total consideration of $10.3 million for the properties, with approximately $1.5 million to be paid in cash at closing and the balance through the issuance of convertible notes and common shares.
For more information on the company, go to www.riograndepetroleum.com
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